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Next Buzz: Social Enterprise Apps

January 17, 2012 Leave a comment

Social Enterprise Apps are the next buzz. Companies like Salesforce with Chatter, Yammer, Jive, Google with Google+, etc. all want to change the way employees work in 2012 by adopting Facebook and Twitter-like solutions.

At the moment it is too early to tell who will be the winner. Most products however are still just offering only basic features like status messages, connect to colleagues, share documents, etc.

The real interesting features are still to come. Employee driven process creation and management should make it possible for plain humans (not über-programmers) to define and manage company processes and to transfer a world of Excel, Access and other homegrown solutions to the Web and mobile world.

Operators should jump on the social enterprise apps bandwagon because calls and SMS can still be incorporated into this new portfolio of products. However not in the traditional manner. Since everybody has access to a phone, it could be used for quick approvals either by calling in, getting called or sending an SMS. Even faxes could be incorporated. Traditional companies might be more willing to move from paper faxes to online faxes instead of moving from zero to Facebook speed right away.

The key will be the ability to people to define and manage things themselves without needing support from IT or five level of approvals…

 

The traditional way of innovation is no longer good enough…

January 16, 2012 1 comment

Innovation used to be something related to an R&D department that would experiment with new technologies and a marketing department or product management that would ask customers what new features they required. The business team would be killing any innovation that did not present a business case which complied with company rules: e.g. x% margin, €yM revenue in two years, etc.

Why is traditional innovation no longer good enough?

The cost of launching a disruptive innovation that changes a complete industry has come down dramatically. There are many examples: Skype and roaming, Amazon’s Kindle and paper books, P2P and network bandwidth / media revenue, Salesforce and shrink-wrapped software, iPad and Windows PC, iPhone and Nokia, etc.

Disruptive innovations are more frequent than ever and enablers like Cloud Computing, Open Source, Off-shoring, 3D Printing, etc. allow innovators to launch big solutions on a modest budget.

Most traditional innovation is about evolving a current product by adding new features and improving current functionality. Traditional innovation focuses on prototyping new features and products and showing them to potential customers. However process innovations (e.g. Toyota Production System), business innovations (e.g. freemium), marketing innovations (e.g. Intel Inside), disruptive innovation, etc. are often overlooked.

Every one should innovate

More and more companies are convinced that every one in the organization should innovate and not only R&D and product marketing. By putting special innovation processes in place in which employees can share innovation ideas and use collective knowledge to improve them and get funding, innovation becomes more democratic and often more successful. Companies like Google allow employees to focus one day a week on innovation that can be totally unrelated to their day jobs. People vote with their time which project is worth it. Ideas are shared hence collectively the services get better.

Also upper management is no longer looking from above but should innovate by example. Name all big innovative companies and you see that founders are a big part of innovation and participate in it every week: Google (Larry Page and Sergey Brin), Amazon (Jeff Bezos), Apple (former Steve Jobs), Facebook (Mark Zuckerberg), Salesforce (Marc Benoiff), etc.

Daily Innovations instead of Product Releases

The large dotcoms (Google, Facebook, Amazon, etc.) no longer do market research in the traditional way to find out if users like a feature or not. They also no longer focus on major product releases. Instead they focus on incremental innovations on a daily basis. Users request new features via social CRMs and the most voted features get implemented. Often a feature can have multiple implementations. Users are divided into different groups and new features get enabled for subgroups. If a new feature has a positive effect then it survives and gets rolled out to the rest, if not it gets killed or adjusted.

New products no longer get productized from an idea and afterwards customers are searched for it. Instead customer’s pain points result in paper prototypes that get validated and redrawn until they solve the problem. Afterwards real prototypes are made that get launched in beta or even alpha shape towards real users. Beta can already mean that users are paying for it.

Discovering New Innovations

Discovering new innovations is done by combining groups of people with different expertise (marketing, psychology, arts, technical, business, etc.), to understand a new domain and to question a status quo. Most of the time the best innovations are those that remove a status quo and make a painful activity into a joyful activity, e.g. LinkedIn: networking with people and keeping up to date your business network.

After questioning experts and novice users, innovative companies also observe how users use their products. Often heavy users or first-time users are unsatisfied with current products. New ideas are shared inside but also outside of the company with a network of experts as well as people with completely different skills. Afterwards solutions are built based on experimentation. A very important aspect is also being able to transport solutions from other industries. Making associations between unrelated topics and understanding how things are done in a completely different environment can bring new inside…

It is very important that different departments (business, marketing, operations, maintenance, etc.) all work towards launching new innovations and removing obstacles because killing innovation is very easy, making it succeed is not.

Some good books on innovation are: The Innovator’s Dilemma, Nail It then Scale It and  The Innovator’s DNA

How RyanCom would destroy the European telecom business?

November 23, 2011 3 comments

Let’s assume a new telecom competitor is entering the European market: RyanCom. Similarities to RyanAir are purely fictual :-)

1) The Network

Instead of building expensive antenna networks RyanCom would make deals with Cable operators to put Femtocell equipment in cable modems and as such cheaply get coverage in major cities. Everybody that would switch to a Femtocell modem in their home or office would get 6 months of mobile usage for free.

Ryancom would have an agreement with the smallest operator in every country to sublease capacity if a Femtocell is not available.

2) Target User

iPad, Tablet owners, Websurfers, Roamers, etc. Ryancom would allow one data plan for the whole of Europe. Since the bulk of the traffic would go via Femtocell, better access costs could be provided. €5-10-15/month to have €5-10-15 Gigabyte/month.

3) Backoffice systems

All backoffice operating and business systems would be running in a cloud and open source is heavily used. Since there are only a limit number of data plans, there is no need for a billing system. SaaS like Zuora are enough. Google Apps and Salesforce would also be heavily used.

4) Social aspects

Social aspects would be very important. There would be competitions going on for which subscriber can convince more friends to join RyanCom.   There is no helpdesk in the traditional manner. There is community support just like GiffGaff.

The End Result

RyanCom would be able to gain young data-intensive and roaming subscribers. They will see RyanCom initially as a second provider for their tablets. Little by little RyanCom could become their first provider when Skype and other applications become common use to make mobile calls.

RyanCom might be a fictional company but operators should be warned that fiction and reality might be just a matter of time…

 

 

Hurray SMS is death…

October 13, 2011 1 comment

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…

5 Ways for Google to Disrupt the European Telecom Market

September 20, 2011 Leave a comment

The European telecom market has been a fragmented market with many languages and local laws. Small successful US dotcoms often completely avoid Europe. This makes the European operators feel relatively safe and not aware of the disruptive technology that awaits them.

How could Google disturb the current European telecom market?

1) Become a Pan-European MVNO and offer cheap no-roaming data plans.

Tablets are reaching the Tipping Point. If Google would offer one SIM to cheaply access the Internet everywhere in Europe, then operators would loose out enormous roaming revenue and their most lucrative market segment: travelling businessmen.

Google could also allow the usage of this data plan in mobiles and offer Google Voice and Talk on the mobile via VoIP.

2) Micropayments together with Energy providers

Telecom operators have been reluctant to set-up a long tail eco-system of partners that can sell services, content and apps and charge them directly onto your phone bill. Each operator has its own interfaces, if any. The operator’s revenue share is extremely high, making most business models unprofitable.

What if Google would partner with giants in other industries? Would consumers mind if their online game purchases would be billed on their electricity bill instead of on their telephone bill when the amount is below €2? They would probably not. The energy giant has to send you a monthly bill anyway, so getting some extra profit would be nice for them.

3) Top-up NFC with no merchant commissions

In your Android mobile you would use your NFC (near field communication) device to pay small amounts. From time to time you would recharge your mobile via Google’s Checkout or enable an auto-recharge. Merchants would receive the combined money transfer at the end of each month but would not pay commission. How would Google make money? A top-up and late payment to merchant means that Google can hold large amounts of money for easily 30 days. The interests should go far in paying daily operations costs. Additionally you would share with Google all your purchases, so they can target you with virtual coupons and other long tail advertisements.

4) Youtube + Google TV can become the European Netflix

For those not familiar with Netflix, and similar services, it is a “cheap” all-you-can-eat video-on-demand service in the US. It streams the latest movies and series from the Amazon Cloud right towards your SmartTV, Set-up Box, Tablet or PC. Prices have recently gone up but are still relatively cheap.

Using Youtube’s streaming platform and Google TV’s content, operators could be seeing their data network costs skyrock without any major revenue gain.

5) Combine all of the above

Google could be launching all of the above in a very short time period, leaving operators no time to react. Roaming/calls/SMS would drop enormously, third-party revenue from premium SMS would drop, lots of new innovative services sold over-the-top and an unseen bandwidth usage explosion.

Sometimes you wish you would be working for the other side…

Changing from Telco Grade to Web 2.0 Grade by fighting telecom myths

Most telecom operators are still thinking that software should be upgraded at most twice a year. Oracle RAC is the only valid database solution. RFQ’s bring innovation. If you pay higher software licenses, the software will have more features and as such will be better.

All of these myths will have to be changed in the coming 12 months if operators want to be stay on top of the game.

Upgrade twice a year

For telecom network equipment, two upgrades a year are fine. However for everything related to services that are offered to consumers or businesses, that means that operators are 180 times less competitive then their direct competition. The large dotcoms like Facebook and Google make software upgrades on a daily basis. 50% of all the files that contain Google software code change every month. Even if “a revolution” would happen and software upgrades would come every month, it would still mean a 30 times lag.

Operators need to start using cloud computing, even if they are private clouds, to deploy their back-office systems. The business needs software solutions to move at market speed. That means that if a new social networking site is hot, then it should be integrated into telecom solution offerings in days. Not in months or a year.

There are many techniques to make deployments more predictable, more frequent and more reliable. Offering extra features or integrations quickly can be done via plugins. You can have a group of early adopters, give feedback. If they don’t survive this feedback, kill them. If they do, scale up quickly.

Oracle RAC

Nothing bad about the quality of Oracle RAC but it is a very expensive solution that needs a lot of man-power to keep on running smoothly. Operators often pay a premium for services that could run equally well on cheaper or Open Source alternatives. Also NOSQL should be embraced.

If the cost of deploying a new service is millions, then only a couple of them will be deployed. By lowering hardware and software costs, innovative projects are more likely to see daylight.

RFQ’s and Innovation

It takes 3 months from idea to finalizing an RFQ document. 1,5 month to get a reply. 1,5 month to do procurement. Half a year in total. Not counting the deployment time which is likely to be another 6 months. The result is that the operator takes 12 months for any “new” system.

Now the question is if that system is really new. Because if an operator was able to define in detail what they want and how they want it, then the technology was probably quite mature to begin with. So operators spend fortunes installing yesterday’s technology 12 months late. Can anybody explain what innovation this is going to bring?

First of all operators should not organize multi-million RFQs for business or end-user solutions. These are likely to come late to market and can only be focused on mass markets.

Instead operators should focus on letting the customer decide what they want by offering a large open eco-system of partners the possibility to offer a very large list of competing services to their customers. The operator should offer open APIs to key assets (charging, numbering plans, call control, network QoS, etc.). As well as offer revenue share and extra services like common marketplaces and support 2.0 (social CRM, helpdesk as a service, etc.). This is called Telecom Platform-as-a-Service or Telco PaaS.

High licenses, more features, better

More features does not mean better. Most people want simplicity, not a long list of features. Easy of use comes at a premium price. Look at Apple’s stock price if you don’t believe it.

It is better to have basic systems that are extremely easy to use with open APIs and plug-ins. A feature by feature comparison will make you choose the most expensive one. However it is hard to put as a feature that the system needs to be easy to use.

In telecom, there is a natural tendency to make things hard. In Web 2.0 the tendency is the opposite. You can see the difference between Nokia and Apple. The Nokia phone would win every feature on feature comparison but the iPhone is winning the market battle…

Instead of organizing an RFP, let end-users and employees play around with early betas or proof-of-concepts. No training, no documentation. Let’s see which solution makes them more productive, the feature rich or the more straight forward. Just ask open APIs and a plugin-mechanism and you will be set…

Operators should act like VCs when it comes to innovation

Operators have an addiction to use RFQ processes. The problems with those processes are:

  • They take a long time.
  • They are not useful when technology is not well understood.
  • They are only applicable to solutions whereby there are multiple providers.

Basically an RFQ will always bring you yesterday’s technology. After integrating this technology, when you launch you will be working with the day-before-yesterday’s technology. Google and others are working on tomorrow’s technology. Launching an innovative service via an RFQ process is as such almost impossible.

If you want to launch innovative, and new revenue generating, services that bring you back into the game, then the first thing that you need to accept is that RFQ’s are not your answer. So what is the alternative?

Innovation is about trying and accepting failure as a natural step towards success. You need to do everything to quickly detect failure so you do not spend too much effort on such solutions. How can you do this?

Forget asking marketing experts or even doing market studies, etc. Do you know any expert that would have predicted the success of Facebook?

The answer is to form small teams, called tiger teams. 1 functional/sales expert and 5 technical experts is a nice size. These teams should be isolated from the rest of the organization. Ideally the teams are mixed with members from partners or suppliers that know about a specific domain.

Additionally the tiger teams should have access to some innovation framework that helps them use some of the internal assets without having to do real deep integrations.

Finally the tiger teams should have access to part of your website,e.g. labs.operatorname.com, where they can launch their creations and get immediate feedback from beta users.

Operators should invest in these teams as would a VC. You get a little bit of money in the first round. Just enough to get me a prototype in 1 to 3 months. Afterwards we look for 1 to 2 months to see if there are beta users that like the solution. If not, we kill it.

If the solution is interesting for end-users or businesses then the next round of spending should come. However ideally operators start working together with other operators that are not competing and jointly invest. This way, your tiger team might not have given any result this month but the tiger team of your neighbouring operator might. By jointly investing, the cost to get the first commercial version is a lot lower.

The tiger team should not switch off the beta and start working on version 1.0. Instead it should use a social CRM to get feedback from early adopters. The roadmap should be steered by the community of early adopters. The service should with their guidance go from alpha to 1.0 in a maximum of 6 months.

As soon as the service is live, then it should be extended to all the other operators that also invested in it. Via Cloud Computing, it would be possible that this service is only installed in one place and offered to multiple operators with a minimum integration. Partners could even take over all costs of operations in exchange of a revenue share.

Once version 1.0 is reached, it is time to focus on offering open APIs and plugins so the community can start extending the solution and not necessarly the operators.

LTE will kill the telecom cash-cow. Is your cash-calf ready to take over?

Long Term Evolution, LTE or sometimes also referred to as 4G, is the next generation mobile network technology.  It promises to bring network speed to the mobile that can beat the current ADSL offerings. In the beginning LTE prices might be high but competition especially from new entrants – “the Ryanairs of telecom” / “4G Bitpipes” – are likely to bring affordable pricing plans soon. The US already has the first “4G Bitpipe players”: Clearwire and Lightsquared.

So what does it mean if tomorrow you can have ADSL-like speeds for an (almost) flat-rate. In practice, end-users would be crazy to still pay €0,15 for minute for a call or per SMS. Skype with its optimized codecs (e.g. SILK) will offer better voice quality and will throw in video for free. Instant messaging, Twitter and Facebook chat will completely substitute SMS. This will be the end of the telecom cash-cows: calls and SMS…

What will be the next cash-calf? For those operators that are still looking for the “Killer App” – that single technology that only telecom operators can offer and is extremely successful – I have some news. Postal services are still looking for their killer app after the stamp was substituted by email. So is the music industry. There is no economic law that says that a former monopolist has the right to pick its next monopoly.

So if there is no “Killer App” does it mean that all telecom operators are doomed to become bit-pipes tomorrow? Over time several will but not necessarily all. Although dotcoms have the sexiest solutions, large corporations are unlikely to massively shift their communication services to a heavily indebted 25 people company close to a surf-paradise beach. So due to inertia the abyss is still some years away. However should you just give up and let  consumer ARPU drop year by year?

I believe there is still a window of opportunity for telecom operators to bring new appealing services. However they must be willing to abandon some important historical laws of telecom.

1) Standards slow innovation

Collectively negotiate a standard that is more a political compromise then the simplest, most effective way of doing things is not helping innovation. In the Web 2.0 era, dotcoms launch new ideas all the time. Most of the time it is a “winner takes it all or at least most” market. So the winner sets the standard. How many Twitter competitors do you use?

By designing an architecture around obscure standards, few operators have employees that can explain their company’s architecture. Google and others have invested heavily in their architecture. They constantly update it. But on a blackboard a Google architect can draw you exactly why they choose Bigtable, GFS, etc.

2) Don’t talk about subscribers, call them users

A subscriber is an entity that signs a monthly contract with a telecom operator. By doing so a subscriber seems to subscribe to a list of applications that the marketing department of the telecom operator has preselected as the most adequate for him or her. The operators seems to know what is best for their subscribers. WRONG!!!!!!!!

Call them users and give them the tools to select/create/design/customize/configure the services they want. Let the community vote about which feature is needed. Ask users why they stop using a new service after a week. Let users define the price they are willing to pay by offering multiple alternative solutions in different price ranges with different feature sets.

3) Go from a catalog of few to an infinite catalog

If Telecom can no longer survive based on a few hit services, then they could go to the other extreme: the long tail telco. A long tail telco offers an almost infinite catalog of solutions that combine communication assets with other solutions in order to solve user’s problems, to make them more productive or to entertain them.

Users should be able to combine products to resolve their needs. A good example is what is offered by Invox. Via wizards, templates or a Yahoo Pipes drag-and-drop configuration, small to large enterprises can configure their own telecom services like call centers, PBX, etc. They can easily integrate the best of the Internet (Salesforce, Google, Yahoo, etc.) with IP-based communication. You use what you need. You configured it the way you want it.

What is missing is a market in which those users that don’t want to do it themselves or who need specific support (e.g. custom integrations), can go and find the right help.

Telecom operators should no longer focus on end-user services but on enabling the end-user and an eco-system of independent third-parties to be able to create and sell solutions and services to one another. As long as it is easier, faster and cheaper for a third-party to use an operator’s tools and assets they will see no need to design an alternative solution. This brings us to the next point…

4) Monopolists die because of greediness

Revenue shares of 40-95% are often not in line with the value and risk the operator takes in the value chain. Those operators that think that “squeezing partners until the last drop” is a good long-term strategy, will be the first to die. Innovation needs out-of-the-box thinking. People don’t take risks if they don’t see rewards.

You will need to do more than to just blindly follow these four rules. But by applying them and listening to users, you are on your way to create new cash-calfs…

FCC’s net neutrality short-term heavy pain, long-term gain???

December 26, 2010 Leave a comment

The newest FCC ruling about net neutrality will have far reaching consequences for VoIP. US operators will not be allowed to block VoIP from competing providers. This means that Skype, Google Voice, etc. will have free access to the operator’s networks.

It is unclear if Europe will follow the US. Not being able to block VoIP will mean that voice and SMS revenues will decline faster than before. Phone tariffs will no longer be able to include statements like “VoIP is not allowed or will mean the user accepts a more expensive tariff plan”.

However is allowing universal VoIP really bad in the long-term?

In case the FCC’s net neutrality would not have included this statement and operators would have continued having a “monopoly” on mobile VoIP what would have happened? Probably nothing major. And it is exactly this state of not being forced to move on and bring out innovative services to substitute declining voice and SMS revenues that is dangerous. Dotcoms are innovating at crazy speeds. Sooner or later they would find ways around a legal “monopoly”. However with the new rules the operator’s management is no longer exclusively thinking about rolling out LTE or not.

In Europe VoIP should also be declared open for general usage because otherwise there is a major risk that European operators lag behind in the mid-term and can never recuperate again…

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