Hurray SMS is death…

October 12th 2011 Techcrunch declared the day SMS began to die. Why? 10-12 is the day that iOS5 was made available to the general public. In this update there is a new functionality called iMessage. iMessage will check if the person you are sending an SMS to is also using iMessage. If this is the case then the SMS will be sent as an instant message and not as an SMS. The technology is not new (e.g. Whatsapp, Blackberry Messenger). However it is the first time that users will no longer have to install a separate application and choose if they want to send an instant message or an SMS. Android is likely to follow shortly. Also interconnection between iMessage and other platforms is still necessary. However this is clearly an example of the Innovator’s Dilemma, disrupting an industry via the use of disruptive technology.

So why the Hurray? This is very bad news because thousands or even millions of jobs might be at stake in mobile operators all over the world.

The hurray is because innovation will finally come back to the telecom industry. The beginning of the end of the CFO promoted to COO promoted to CEO a.k.a. CFEO [FEO in Spanish means ugly]. The bean counters that were warned years ago that disruptive technology would destroy the mobile industry as we know it. However they choose to ignore the message and put into place RFP processes that kill any innovation, make investments based on short-term business cases, substitute vision & strategy for ROI, etc.

With major risk of disruption, it is time for mobile operators to embrace new ideas. To invest in innovative solutions. To try out new unproven business models. Or face the consequences. Me2-strategies are no longer enough.

At last long-tail partnership management (LTPM), Telco PaaS, Mobile PaaS, Big Data Analytics in the Cloud, Nanopayments, Mobile Graphs, Freemium, Telco Gamification, etc. it can all be proposed. For once the big question will not be, “Show me a business case with ROI in 3 months” but instead “Let’s set-up a tiger team and see how we can be successful”.

Don’t understand the message as if this is a return to the nineties where venture capital kept even the most rediculous dotcom alive (e.g. pets.com, webvan.com).

The next ten years will be the age of the commercially skilled visionaries leading the most successful companies. The CEOs that can look futher ahead then next quarter but that do not focus on research for research but on the next big business. CFO’s and COO’s will be still milking the cashcows. However the CEO will be worried about next year and no longer about  next quarter. The tragedy in life is that the one person that knew this period was going to come, passed away before it even started. This article is in memory of the greatest visionary of modern times: Steve Jobs…

The CFEO and the nerd make room for the CBIO

At the end of the nineties Sillicon Valley was nerd paradise. Every technically skilled person could have a chance on getting excellent working conditions and maybe become rich. The bubble burst. No more unprofitable dotcoms and the end of telecom innovation paradise. Shorts in the office were replaced by ties.

The new ruler of the world was the CFO, who was first promoted to COO and afterwards to CEO, shortly CFEO. Shareholder value, CAPEX and OPEX were the new buzzwords. Creative accounting the solution to revenue problems. The current crisis is showing the limitations of focusing only on cost reductions and not on growing the business via innovative products and services.

It is time for a new class of rulers, the CBIO. The ideal profile is a generalist with a technical background, knowledge of financials, operating experience and an innovative strategist. This person does not have to be an expert in all domains but have at least a good understanding of each and be able to surround him/herself with experts in these areas. The CCO will understand that there are two types of technical projects: routine and innovative. The routine projects should be executed in the cheapest fashion possible: Cloud Computing, Off-shoring, Open Source, etc. The innovative projects will make the difference between global leadership and bitpipe doom in the next 12-36 months. No single RFQ process has brought innovative results to any operator that got front-page news coverage. So innovative projects should not be handled by an RFQ. The telecom operator should be split in two units: “Business as Usual” and “New Business”. The “Business as Usual” should continue to focus on shareholder value, CAPEX and OPEX and become a best-in-class bitpipe. The “New Business” should launch on a weekly basis new services and features to quickly understand what works and kill those things that do not. If the “Business as Usual” systems are not delivering the results the “New Business” needs then they should be allowed to shop elsewhere, even shop with competitors! The “New Business” should focus both on hits as well as long tail services. Giving end-users the choice between millions of services instead of only Voice and SMS. Focusing on the why people communicate and not the how.

Failure to recruit a CBIO will result in the “Business as Usual” becoming a bitpipe but the “New Business” being called Google Voice, Facebook Seamless Messaging, Apple App Store, etc.

CBIO stands for Chief Bitpipe and Innovations Officer…