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Why VCs should no longer invest in mobile apps or social networks…

July 22, 2014 1 comment

The “Yo” app is a clear sign that there is a mobile bubble. If an app that is created in an afternoon and only says Yo gets $1M in funding then you know VCs are running out of good investment options. Also social networks are loosing steam because there are only so many you can be active on.

What should VCs focus on instead?
The answer: enterprise.
If all the UX, mobile, social, engagement, etc. experts of this world would focus their energy on making exciting, beautiful, easy to use enterprise applications and solutions then lots of new billionaires will be around in 3 years.
However enterprise software is hard. It needs to be rock steady, always available, easy to integrate, etc.
So what is the trick?
Easy: use a plugin mechanism and focus on a platform that handles 80% of the use cases with 20% of the features. All other 80% of the features can be added as plugins from external companies. The Accenture’s of this world will come up with plugins that will beat your wildest dreams. Especially if they have an easy way to sell them. Talking about price. Your platform should be open source. It is the only way to avoid the RFP hell. If you want to be compared to SAP, Oracle, Microsoft, etc. solutions then charge at least $1. If you make it open source then procurement has no say. Business managers and solution architects will try your software. They will show their managers solutions based on your software. The director will get involved. As will the CTO. They will all love it. When finally things go to production somebody will say “we need support!” and you can sell them a support contract. This is also the moment to sell them some plugins.
Now make your software super easy to integrate, e.g. via Juju, and make sure the software is scale out. This means that you can just install it on more virtual or commodity machines instead of needing bigger more expensive servers.
Finally in addition you need to add something innovative that other solutions in the same space don’t have and would have a hard time copying.
Use lean methodology to make sure you are building a solution for a real problem. Offer an on-premise version and a SaaS version.
Now you are set to become the next billionaire. At least your chances will be so much bigger than creating yet another mobile app or social network…

The Ryanairs Of Telecom are Here…

December 17, 2013 Leave a comment

After years of virtually no innovation from telecom operators, 2014 will be different. Not because telecom dinosaurs have all of a sudden become lean mean innovation machines. Quite the contrary. Most operators are still focusing on rolling out THIS YEAR’s (instead of today’s) “innovative” service which will be just a copycat of some famous dotcom.

So why the excitement?
2014 will be the pivot year. The year that will be marked in history books as the year old school lost and innovators won.

The first Ryanair-like disruptive telecoms will leave their borders and start bankrupting “traditional telecoms”. Cross-platform voice/video 4G apps will reach the tipping point. Cloud Telco PaaS will be reality. Individual communication solutions or iCommunication will be a reality. Web 3.0 will include voice & video communication. NFV will be driven by non-telecom players. WAN SDN will be deployed by more than only Google, Amazon, etc. Cloud Media Streaming will reach the tipping point. Internet of things will meet Cloud will meet Big Data will meet Mobile will meet disruptive communication solutions. Early adopters paradise…

2014 will be an exciting year for those that love telecom innovation!!! Bit pipe nightmares becoming reality for others.

What comes after SaaSification?

Fujitsu just presented SaaSification on Cebit. Existing applications can be easily brought to the Cloud and sold via App Stores and SaaS marketplaces. IBM is also working on SaaSification and even adds multi-tenancy.

What is next?

Everybody wants to have a full App Store or SaaS Marketplace, so SaaSification is the next step after launching your store. However converting a client/server application to the Cloud is only step 1. Step 2 is creating new services that are specifically built for the Cloud.

What does Built-for-the-Cloud means?

Application design is changing. Traditional Web applications are built on a LAMP architecture. New Cloud-Ready applications should be Big Data ready and should be looking at SMAQ architectures.

Cloud-Ready applications should also accept the new reality of APIs. Both for exposure as well as consumption. This means that applications need to be redesigned according to application slices.

So if SaaSification wants to be successful then it needs to add quick enablers for multi-tenancy, big data, integration with external APIs as well as API exposure, etc. This integration concept can be called iPaaS or integration platform-as-a-Service. iPaaS should not only focus on exposing or integrating APIs but on providing complex services by integration multiple SaaS solutions together.

Other enablers should be added as well. Basically 80% of a SaaS solution consists out of the same elements or tries to solve the same problems. These could all be provided via a SaaSification PaaS:

  • Blog – to describe the newest ideas.
  • Forum – for people to get answers from the community.
  • IT PaaS – where you run the actual business logic and UI. Data storage is assumed to be provided by the Big Data elements.
  • Portal and Mobile Portal – allows to quickly define the “static” content for the web and mobile site.
  • Deployment management – ideally continuous deployment or integration tools that allow fast feature by feature deployment.
  • A/B testing – allow new features to be deployed to subsets of users and check which version of a feature has the highest impact on the bottom-line. A/B testing was made popular by Amazon.
  • Automated testing – lots of testing can be automated but especially end-to-end and performance testing are the harder tests that should be focused on.
  • Configuration management – manage the version control of the code.
  • Metering and billing – be able to meter the resource usage by users, companies or any other element you want to meter and be able to bill users both for subscriptions as well as for usage, ideally with advanced set-up with overage, etc.
  • Marketplace listing and provisioning – automate the listing of products on the marketplace as well as the provisioning of new services.
  • Single sign-on & identity management – allow companies to use their own user credentials (e.g. SAML), authorization for third-parties (e.g. oAuth), etc.
  • Reporting and data warehousing – this can be part of the big data stack but especially being able to create ad-hoc reports for instance for A/B testing . Of course regular business reporting needs to be included as well.
  • ERP – accounting, resource management, etc.
  • CRM – sales and lead management
  • Operations & Maintenance – automation of back-ups, monitoring both for the performance and fault management but as well business monitoring.
  • Support – helpdesk, ticketing system, SLA management, etc.
  • Social integration – tools to add social aspects like Facebook apps, Twitter feeds, etc.
  • etc.

The idea is not that a SaaSification PaaS offers all these solutions by custom development. Instead the SaaSification PaaS should allow startups to assemble an ideal architecture by combining different solutions from different providers. For example you would be able to select the support solution you prefer, e.g. desk.com, zendesk.com, etc. and this solution would be completely integrated into the overall stack, e.g. CRM integration with help desk and fault management together with sign sign-on.

SaaSification 2.0 should focus on making sure that 2-5 people can start a new dotcom solution and focus on creating a killer service and not on building up yet another stack of solutions for configuration management, support, billing, etc. If a SaaSification PaaS can shorten the time to launch with months and reduce the needs to operate the solution with several people then startups will see the value. Instead of SaaSification PaaS a good term could be Incubation PaaS, to incubate SaaS solutions. Once the business model and solution is proven, there will be money to move to a custom-build stack but during incubation and crossing-the-chasm enterpreneurs should be able to focus on delivering value to their customers and not on re-inventing the startup wheel.

Social Niche Marketplaces and SaaSification

February 8, 2012 Leave a comment

Google App Marketplace was the first marketplace for SaaS. However there has lately been an explosion of SaaS marketplaces. Unfortunately most of them are eCommerce sites that support subscriptions and resell Microsoft 365, some cloud backup and 3 to 5 things more.

Operators that are considering such a me-too marketplace should try harder

There is nothing like an average enterprise customer. Each customer is looking for a unique mix of services. You have innovators, early adopters, early majority, late majority, laggards. You have self-employed, micro, small, medium and large companies. You have industries. Users are working on different functions within a company (finance, operations, sales, etc.).

However never has it been easier to personalize product portfolios according to market segments, industries, adoption likelihood, usage, etc. Operators should not set-up one marketplace but instead set-up intelligent personalized niche marketplaces. Users can tell you which industry they belong to, what their company size is, what their function is and if they are more eager to use the latest and greatest or if they want a full eco-system with a market leading product. This means that a highly personalized portfolio can be shown instead of a bunch of generalist products.

Why sell different products via different channels?

If you have customers segmented, then ideally all relevant products are presented in one personalized marketplace. Ranging from phones, tablets, mobile apps, SaaS, on-site equipment, advanced consultancy services, support, etc.

Bringing in intelligence and social commerce

The next step is to increase the likelihood of selling a product and cross-selling products. Users like product reviews and ratings. However users love product reviews and ratings from people they trust. What if each product in addition to a general section on product reviews and ratings also has a social review section. The social review section would be like:

  • these contacts from my linkedin network have bought this service
  • these contacts have bought these alternative services
  • their ratings are
  • in addition they also bought these services

How to go from 0 to 1.000.000 products?

Many operators offer services for “the average customer”. The product catalog is relatively small. Few have more than a couple of niche products per industry. Setting up a social niche marketplace is no good if you do not have a large catalog of personalized services to sell.

SaaSification to the rescue. Every industry has a lot of small companies that have build niche products. Most of these products require on-site installations. This means a lot of CAPEX. Often more is spend on buying the hardware, base software, services to maintain the data center, support services, etc. than on the actual software. By offering these small companies a SaaSification solution whereby they can migrate their on-site solution to an operator-hosted SaaS solution, the product catalog can be quickly extended with thousands of niche products. Offering tools to make single-tenant solutions multi-tenant and to make web solutions mobile-enabled, will substantially improve your chances to attrack ISVs.

New SaaS will move from the innovators towards the early adopters, early majority, etc. Early majority products will be niche market leaders, have strict SLAs, a support eco-system, etc. Leading products can be identified by the market. Operators can spot those niche market leading products and offer special deals, even co-branding. This strategy will allow a personalized long tail strategy without the long tail costs…

Thinking differently about monetizing telecom services

January 12, 2012 2 comments

Free, the disruptive French telecom operator and ISV, is changing the rules. Via Femtocell and via controlling the WiFi access points of its customers, Free is planning to offload a lot of mobile traffic via its fiber network. This is translated into very sharply priced mobile calling and data plans. Free’s Founder is telling the telecom industry they should no longer try to make money with communication but focus on identity and payment services.

Free is right to change the rules of the game instead of waiting for non-telecom disruptive players to do so. However what else could Free do to generate extra revenues?

Social Mobile Graph

Facebook is talking about social commerce in which friends, family and colleagues are taking an active role in your buying behaviour. At the moment social networks are either for business reasons, e.g. LinkedIn, or for pleasure, e.g. Facebook. However both need a lot of maintenance effort in which you need to send or accept invites from people who you might have known 20 years ago.

What if your calling and messaging behaviour could take away a lot of this burden? If you call somebody mostly during business hours then this person is likely to be a business contact, especially if other business contacts of yours have the same behaviour. Your addressbook and linkedin could be automatically updated. However you could go a lot further and see which restaurants your direct business contacts call more often. Anonymizing this information and creating public APIs and a marketplace for app developers could lead to a lot of innovative services that can be monetized.

Numbering Plan Apps

The numbering plan is probably one of the most under-used operator assets. However everybody knows how to dial a number. Why not let other people make new numbers, e.g. based on non-existing country codes or using the # or * combinations? People would be able to make premium services for everything from voting, surveys, competitions, money transfers, etc. Putting *120* in front of your number could mean that the caller is paying you 1,20 euros per minute to call you. It is up to you to redirect your number to an application that makes people want to call you. You might have a large numbering app market to choose from. Add a # and a number at the end and you could have thousands of applications behind one number. The operator would get a revenue share.

Call Center as a Service

Call centers are mainly used by large corporations. However small groups of ad-hoc people could benefit from them as well. Ad-hoc software support hot lines in which experts can be freelancers could be of interest to some. But it could even be as simple as housewives that can help you with recipes. As long as rating the participant’s value, dynamic joining and leaving of participants, paying participants a revenue share, configurable participant selection rules, etc. are provided, the applications are limitless.

A lot more

These are just ideas but there are a lot more possibilities that you can implemented. Especially if you can control both the mobile device as well as people’s access point. However the past has shown that trying to get a few people pay a lot of money for a service and operator’s trying to do it all by themselves, have not been successful. Innovation is not only needed in the product domain but also in the business domain. Models that should be explored are:

  • Freemium, whereby most do not pay but get the traffic to your service and only a minority pay for advanced usage. Many examples in the web 2.0, e.g. LinkedIn, Zynga, etc.
  • Long Tail, whereby not only a couple of high paying  groups are targeted but instead thousands of niches are targeted via the use of a general platform or third-party eco-system, e.g. Google Adwords, Facebook Apps, etc.
  • Revenue Share, whereby others get the bulk of the revenue because they take the risk and the operator gets a small share but gets it from a large group of revenue sharers, e.g. Apple’s App Store

How Fon could become disruptive?

November 30, 2011 3 comments

Recently I wrote an article about Ryancom. I received a comment that Fon.com was already doing certain things like making broadband access available for free globally.

I want to take the opportunity to make some suggestions that would make Fon a really disruptive player.

Fon has some really nice residential WiFi routers. A basic version, the Fonera Simpl with an optional antenna, Fontenna, to reach more distance. Additionally there is the Fonera 2.0 N which allows a community of developers to extend the product with new functionality. Finally they can embed their software into operator’s existing WiFi routers.

Fon’s routers are based on OpenWrt, an open source Linux firmware distribution for embedded devices. Developers can create extra plugins / packages that can be deployed on the router.

How to make Fon more disruptive?

For many technical people having access to a global set of WiFi points all over the globe is a really good reason to buy a Fon WiFi. Unfortunately non-technical people might be lost in the technical details about how you can access somebody’s else Internet and might be scared of other people using their Internet. So for most people the Fon offering is like a vitamine and not really a painkiller.

By changing the value proposition of Fon towards becoming a painkiller for more people, Fon would be able to get more active demand for its products from consumers and also via telecom operators.

Fon painkiller example: Parental Control

Most parents would not care less which router is used to access the Internet. The only thing they know is that their offspring knows a hundred times more about Internet then they do. Additionally they know that Internet is full of dangers for kids and teenagers. Children always tell their parents they need Internet to do their home work. But reality is that most surfing is not done for homework ;-)

So what if Fon would have an OpenFlow compatible WiFi router with FlowVisor combined with a Cloud solution. To spare the technical details, the summary is that parents would be able to partition their Internet access based on who is accessing. What would this bring?

Kids Internet – 3-8 year olds would only have access to a strict whitelist of Internet pages. Parents would not have to find this white page themselves. Instead people and companies could make white lists and parents could subscribe to them. Examples could be a Disney white list, a SuperNanny [the television show] whitelist. Parents would know that their young children could never go to pages that are unsuitable. Young children would have a start page with icons like the iPad in which they can click on the page and immediately go their favourite games or watch cartoons. Children could be limited in the time they can spend on Internet and special bonus points for good behaviour could buy them more time or bad behaviour could be punished with less time. Parents would need an “Apple” friendly interface to pick whitelists and set-up and manage Internet access times.

Pre-teens / Teens Internet – 9-17 years od – restrictions apply. Parents could define studying time slots in which only certain Internet content can be accessed, e.g. Wikipedia. Also here external entities could define whitelists. Time-based filters for open Internet access could also be set. Additionally special purpose filters are set-up, e.g. Facebook, Twitter, MSN, Skype, eMule, Google+ etc. This would allow teens to access Facebook and other sites but to have their behaviour screened. Teens could be prohibited to upload pictures of persons, share email/telephone or physical addresses, use F* words, access adult content, etc. There would be a dynamic firewall for each service. Parents could have a high-level reporting interface to see what their kids are doing.

Other painkillers

Parental control is just one example of how a generic router that is connected to a niche Cloud application could be a painkiller for parents. Operators could have other pain points, e.g. reduce botnets, spam, P2P content optimization, etc. Shop owners could have other pain points, e.g. social games for bars, etc.

A lot of possibilities are opening up if routers could be externally managed and very specific easy to use interfaces and solutions are build towards which communities and external companies can contribute and generate new revenue with.

The fact that every Fon router will give you access to a global free broadband network will be a nice add-on for most…

Europeans have lost their telecom edge…

November 7, 2011 Leave a comment

Not so many years ago, Europe was the leader in telecom. Nokia was the dominant phone maker. Symbian the dominant operating system. GSM/GPRS/3G driven from within Europe. Ericsson the dominant network solution provider.

Fast forward 2011/2012

Only Ericsson is still leading the network solution market. Their mobile arm is being absorbed by Sony however. Symbian is dead. Nokia is in coma, let’s hope its doctor from the Microsoft hospital is able to revive them. LTE is being deployed widely, except for Europe.

The  new rulers are Apple, Google and Huawei. Countries like South-Korea and Japan have gigabit fiber to the home. Something no European country can match.

What should Europe do?

First of all there is a legal problem in Europe that blocks a lot of innovations from reaching Europeans. Europe does not exist in telecom world. Instead there is a collection of small and medium countries that each have their own incumbant operator and legal framework.

The first thing should be to move the telecom legal framework to European level and stimulate the creation of one open market. It can not be that in Germany or France it is not possible to get a virtual phone number [DID] without having an address of residence. Services like Twilio have a hard time to deploy in Europe because of this.

The European Union should drastically reduce its help to farmers, especially industrial farming, and instead use the funds to build gigabit fiber-to-the-home. The UK model whereby the fixed infrastructure is separated from the go-to-market entities should be a good model to follow. If we want to have more Internet companies in Europe, we should start by having fast Internet in all mid to large cities. As well as LTE access for all Europeans in 2013.

European Silicon Valleys

The next step is to create European Silicon Valleys in which startups and universities get easy access to venture capital. Without European innovation, it is hard to see how the European telecom industry will blossom again. Large telecom operators have shown few success-stories when it comes to telecom innovation. They are better at buying successful startups, then starting new innovations themselves. But before you can buy, you must have them first.

The Alternative

What is the alternative of not doing anything?

European employment will suffer. Telecom hardware and software development will be moved permanently to China and India. With only some small design shops in Europe at best.

Operators will become bitpipes which means that only a fraction of the current employees are needed.

American dotcoms and large corporations will attract all investments.

If there ever was a time to feel European, now is the time…

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