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How Google wants to change networking.

Quagga might remind a little majority of people of an extint African zebra. However Quagga is also the name of an open source project that focuses on the future of networking. It is one of the projects that is being boosted by Google push for Open Source Networking. Google has joined hands with the Internet Systems Consortium to found Open Source Routing. Open Source Routing focuses on bringing Open Source solutions for Openflow, Software-defined networking and other technologies that are needed in today’s Webscale networking. Google also is pushing the ALTO protocol in order to improve quality of service for P2P and more importantly content delivery networks.

Google’s dream is to do the same with networking at it did with servers. Buy cheap commodity hardware and make resilient systems via software solutions. This strategy is directly in conflict with companies like Cisco or Juniper that focus on expensive proprietary hardware solutions. Google is trying to find cheap hardware in order to install Open vSwitch and other similar software on it.

Telecom operators and solution providers are wise to evaluate participating in the Open Source Routing effort. Verizon is one of the pioneers in trying out Openflow and the benefits it can have for carriers. Expect a lot of innovation from companies without a big brand to come in the coming months, examples could be bigswitch, fastly, pica8, etc.

Why is Europe no longer innovating?

A little test. Name a European dotcom that has changed people’s life in the last years? No clue? With only a minor change, substituting European for American and the list would be long: Google, Facebook, Twitter, LinkedIn, Zynga, etc.

Even when innovations make it over the ocean, Europe is limited to doing business development, sales and some limited support. Look at the job pages of the big dotcoms and you will see the VP of Engineering in California and the business development manager in Europe. So the future is defined in California and Europe is just a market to sell the innovations that have been tried and certified in the USA.

Most people would not care less if Zynga would come from the USA or Tongo [No harm meant to anybody from Tongo]. However Europe is missing out on some major innovations that can boost the productivity of any small or medium enterprise. Think about Square, Quickbooks, Dwolla, etc. as examples.

Europe some years ago was leading the mobile and telecom industry with Ericsson, Vodafone, Telefonica, Orange, Deutsche Telekom and Nokia being clear examples. Nowadays it is Apple, Google, Facebook, etc. that lead the mobile and telecom revolution. Many might not realize it but Google has not only disrupted the mobile operating system market. Google has the first global software-defined network in the world. Google is writing history and being a major driver behind Openflow. Also the USA is leading together with Britain in White Spaces and other future wireless innovations.

What needs to change in Europe?

The European Union and local governments have always had a preference to over-protect the communication industry. Many laws protect former state-monopolies from getting real competition. The European Union should really look at White Spaces as a way to bring much-needed innovation back into the industry. Instead of selling the licenses to White Spaces to the usual suspects, the European Union should declare White Spaces as a “free” WiFi on Steroids alternative to LTE. White Spaces can be the solution for rural areas that want to get 21st century broadband connectivity.

Also the laws that oblige telecom companies to give national service are outdated. We do not have gigabit fiber-to-the-home in big cities because competitors are obliged to give universal service. Why not let 10 competitors fight without obligation to connect everybody? The free markets will connect those people and companies that are economically viable. By obliging universal connectivity, everybody is connected to a slow network. Leading to European broadband mediocrity.

Telecom companies that have started to set-up venture capitalist offerings are going the right way. Unfortunately too little money is poured into new ventures. Telefonica’s Wayra is offering $30-70K during a 6 months incubation. That means €46K to €109K on an annual basis as seed capital. What can you buy for this kind of money? Virtually nothing. Only one or two people teams at most. Great people would earn more money in their day job so they are unlikely to jump on Wayra. More realistic numbers would be €150-200K, which would allow teams of 3-10 people plus potential for hardware and other types of innovation. The chances that a 2 people team on a small budget makes a world-changing impact are very slim because you need multiple skills to really innovate.

Crowdfunding  should also be high on the list of the European Union. Let people participate in ventures as very small minority stakeholders via collective seed investment. Give Europe some chance of building a European Kickstarter on steroids. Cross-European laws would need to be put in place for this.

We need European Entrepreneur Heroes as well. Europe needs a European version of Steve JobsJeff Bezos, Larry Page, Mark Zuckerberg and Marc Benioff. People that can convert a vision into a multi-billion industry. People that will be role models for future generations.

If Europe wants to leave the current recession behind, it needs to think about moving away from farming subsidies into investing in innovation. We need modern digital laws and a general legal simplification to allow more entrepreneurs to start innovative companies. European corporations should set-up more venture capitalist funding and crowd funding should be high on everybody’s agenda.

NextGen Hadoop, beyond MapReduce

Hadoop has run into architectural limitations and the community has started working on the Next Generation Hadoop [NGN Hadoop]. NGN Hadoop has some new management features of which multi-tenant application management is the major one. However the key change is that MapReduce no longer is entangled inside the rest of Hadoop. This will allow Hadoop to be used for MPI, Machine Learning, Master-Worker, Iterative Processing, Graph Processing, etc. New tools to better manage Hadoop are also being incubated, e.g. Ambari and HCatalog.

Why is this important for telecom?
Having one platform that allows massive data storage, peta-byte data analytics, complex parallel computations, large-scale machine learning, big data map reduce processing, etc. all in one multi-tenant set-up means that telecom operators could see massive reductions in their architecture costs together with faster go-to-market, better data intelligence, etc.

Telecom applications, that are redesigned around this new paradigm, can all use one shared back-office architecture. Having data centralized into one large Hadoop cluster instead of tens or hundreds of application-specific databases, will enable unseen data analytics possibilities and bring much-needed efficiencies.

Is this shared-architecture paradigm new? Not at all. Google has been using it since 2004 at least when they published Map Reduce and BigTable.

What is needed is that several large operators define this approach as their standard architecture hence telecom solution providers will start incorporating it into their solutions. Commercial support can be easily acquired from companies like Hortonworks, Cloudera, etc.

Having one shared data architecture and multi-tenant application virtualization in the form of a Telco PaaS would allow third-parties to launch new services quickly and cheaply, think days in stead of years…

Disruptive Innovations that can Kill the Telecom Industry

February 14, 2012 1 comment

Killing the mobile broadband oligopoly

For years operators have paid billions for spectrum. Millions of man-years have been spent on building standards like GSM, GPRS, CDMA, 3G, LTE, etc. Can disruptive innovation kill this in a few years?

Yes, it can. The FCC is finding out that large parts of the USA are still not covered by mobile broadband. After years of lobbying by groups like the New American Foundation, the FCC has finally decided to start with White Spaces. White Spaces are also being rolled out in the UK.  White Spaces allows spectrum to be opened for public usage, which was previously used by analog television or to separate different adjacent channels. White Spaces have been referred to as “WiFi on Steroids”.

Another disruptive technology is software-radio networks in which mobile devices use software-driven radio technology instead of hardware-driven radio technology. This allows a mobile device to be compatible with different standards and to switch and evolve quickly. Putting software-radio in a mobile phone will make it possible to use dynamic white spaces, in-door networks, etc.

A final disruptive technology is Openflow. Openflow, is part of software-driven networks, in which routers, bridges, firewalls, loadbalancers, etc. are implemented on software-level. Networks can be virtualized and used with different QoS and configurations at the same time.

Google and Microsoft are major backers of the White Spaces initiative. They also control two important mobile operating systems. Google is also running pilots with fiber-to-the-home. Google has its own routers and other network technology.

Google could easily be the first White Space operator and use a Fon-like way to roll out their network.

Killing ARPU

SMS is already death, and it will be just a matter of months before operators will see deep dives in revenue. Apple could make the iMessage protocol public and Android could come with a standard iMessage-enabled solution and people would no longer send SMSes but would not even realize it.

Next one on the list are calls. Roaming is already seriously being challenged for years by Skype and others. Operators are planning for VoLTE, or voice over LTE, only by 2013-2014. However most will start rolling out LTE in 2012. This is the ideal situation for Voxtrot, and others, to use the vacuum to get people accustomed to free calls. By the time VoLTE will be available there might just be one market price for it: FREE.

Other value-added services, are already being substituted. MMS is called Twitter & Facebook mobile app now. PBX are now on the Cloud. Call centers are now offered as a service.

Killing ROI

Operators are pushed by the market to invest in LTE roll-outs. However why would you need LTE? There is not a single operator service at this moment that will make people queue up in front of their stores to get an LTE subscription. There are a million and one reasons in the form of mobile apps, mobile video streaming, social networks, HD Video-calls, etc. that can push customers towards the over-the-top-players.

So network investment is only going to rise and revenues from the new technologies will be meager at best, if not cannibalizing high-ARPU services.

With Mega Upload and other sharing sites being disabled, illegal file-sharing is not going to go away. P2P is likely to come back with a vengeance. It is easy to shut down large sites. However what if special encrypted P2P apps are used to distribute the location of content and botnets for distribution. There are a lot of computers that are connected to the Internet but are badly secured. Instead of using them for spamming, Mega Upload 2.0 services can use them to store and distribute content. As long as these “hacked” computers use HTTP(S), it will be very hard for operators to distinguish regular do-it-your-self websites from illegal content hubs.

Killing the operator’s established business model

Operators have educated subscribers that everything that comes from them has to be paid for. Disruptive operators like Free.fr are undoing this education by giving a lot of services for free when you pay the monthly subscription fee.

The Freemium business model is likely to find its way into the telecom industry. The model in which 90-98% of the users get the service for free and 2-10% generate the revenue by purchasing premium services. Combined with advertisement, this is the model of big successes like Zynga, Linkedin, etc. Disruptive players that adopt Freemium are likely to start offering services outside of their country borders since the more people participate, the better. With a winner-takes-it-all business model expect roll-outs to be very aggressive.

What can the telecom industry do?

The first thing operators should do it to tell their providers that their top problem is the lack of new revenues that will sustain the industry. Not LTE roll-outs, not fiber-to-the-home, not customer experience management, etc.

Telling telecom providers that new revenue solutions will be a top priority for 2012 will shift R&D budgets into the right direction.

The second thing operators should do is to stop using their existing purchasing techniques to try to generate new revenues. Nobody will be able to invest 5 months into an innovative solution, spend 3 months doing business development, pass 3 months on filling out RFIs, pass another 4 months filling out RFPs, 2 months on contract negotiations and 6-8 months on delivery. The industry can not wait 2 years to launch the first solution. Especially the herding nature of operators is making any introduction of new innovative services difficult because everybody wants a market leading solution but nobody is willing to be the early adopter.

The response should be different. Joint innovation teams that are able to break the “established rules”; that are able to launch “beta-quality” services to early adopters; that are able to innovate with both technology, business model and go-to-market strategy, etc. Operators should be embracing innovation and learn from the IT industry and even better the dotcom industry on how innovation is done quickly, efficiently and successfully…

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…

 

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

Alternatives to paying millions in software licenses

January 9, 2012 2 comments

Telecom operators pay millions in software licenses each year. By doing so they are sustaining an industry of “feature loading”. “Feature loading” refers to complex software solutions that in order to win RFPs add more and more features. Most telecom operators are using RFPs to compare different software solutions. Whoever has more features for the lowest price wins the deal. The end result is that telecom software is unnecessary complex and expensive. Software providers do not want to respond with “not compliant” and prefer to add some extra feature even if the one who wrote the RFP will never ever use them.

The likes of Apple have shown us that software is most beautiful when it does very few things very well. The era of mini applications allows users to use special purpose “apps” for each activity. No training required. No heavy investment. No heavy integrations.

Telecom operators should move away from the long RFPs with hundreds of features being compared. Instead they should try to simplify. Why pay millions for a complex system that does too many things too complex? Many large dotcoms have moved away from this type of solutions and have used Open Source, have built single purpose systems/services or generic platforms with plugins to reduce complexity.

Examples:

  • Amazon has pioneered Cloud Computing and has created individual single purpose systems or services that are easily accessible via REST or Web Interfaces. Different individual services (e.g. product recommendation, virtual server, virtual storage) get aggregated into complex solutions at the last moment.
  • Google built its Google File System, BigTable, etc. as generic platforms on which hundreds of other services could be easily added.
  • Thousands of dotcoms are using Hadoop, Cassandra, etc. to store data.

Each telecom service needs to be provisioned, rated, charged, billed, monitored, operated, supported, migrated, etc. By building solutions in which network, IT, communication and services are mixed into mega-complex architectures it has become impossible to launch new services in less than 12 months.

Building a Free Telco PaaS

How to do it differently? Is it possible to build a zero-license Telco PaaS that acts like a giant service delivery platform in the Cloud? YES

Operators will need to use Open Source, IaaS and SaaS solutions. IaaS can be delivered cheaply by using Open Source components: KVM for virtualization, Open Nebula for virtual machine and storage management, Hadoop/Cassandra for storage, Open vSwitch for network virtualization, etc. On top PaaS platforms can be built with solutions like WSO2 Stratos. Telecom services like Twilio‘s or the private cloud version, RestComm, can be used to allow developers to quickly create VAS. Open Source billing systems have been announced, like Meveo. Online shops can be build with Opencart. Datawarehousing and data analytics with Pentaho or Jasper Reports. There are hundreds of open source monitoring solutions: Icinga, Nagios, Zenoss, etc. Helpdesk can either be SaaS like Zendesk, or Open Source like Request Tracker. CRM like SugarCRM. SIP backoffice systems like FreeSwitch.

Operators should start thinking about the Cloud as a way to simplify internal integrations. All back-office systems should be shielded from the outside via easy to use REST, Thrift/Protocol Buffers, etc. interfaces. Service-based loadbalancing should allow service upgrades and rolling migrations without outages. The architecture should be built with Salesforce.com in mind. Non-programmers, and even better end-users, can build their own VAS by using drag-and-drop interfaces and combining different service blocks together into custom solutions. Plug-ins allow for custom behaviour without cluttering a solution for the rest of the users.

Operators should embrace new disruptive technologies to simplify their business, lower their cost structures and be able to launch new services every hour of the day. Large dotcoms are launching new features every day and use A/B testing to validate if users like them and they add to the bottom line. Marketing and product management get a totally different dimension…

Become your own mobile broadband operator

December 23, 2011 3 comments

What if you had a gigabit Internet connection at home and you could connect a simple device to it and start to offer mobile broadband services without paying for the spectrum?

Four disruptive technologies and the support from a large disruptive player like Apple, Amazon or Google could make it possible in 2013. You could make money from instead of paying money for your fiber to the home connection.

Disruption 1: white spaces
FCC, the US telecom watchdog, is opening the US spectrum to unlicensed communications. The term is called white spaces. It basically means that unused spectrum can be used as long as you consult the FCC database and use an FCC approved device.

Disruption 2: Vanu
Vanu Bose is the son of the famous sound systems Bose. Vanu’s venture is about software-defined radio. It basically disconnects your mobile phone from the underlying radio technology.

Disruption 3: Openflow
I discussed Openflow before. It is one of the major standards for software defined networks.

Disruption 4: Cloud Computing
No further introduction necessary.

Bringing it all together
A white spaces compatible “mini base station” at your home that connects to the FCC database to get some local spectrum. Via the cloud and Openflow your nano operator network is linked to hundreds of other networks. A disruptive player offers Vanu enabled phones, e.g. iPhone 6 or Android Nexus Vanu as well as a monthly broadband subscription, e.g. €10 for 100gb. You download a database of “mini base stations”, their location and spectrum onto your phone. You are ready to go. Each time a phone connects to a “mini base station” a virtual network slice is setup (flowvisor / Openflow) and the owner receives money per Mb (nano payments). At the end of the month your Fiber to the Home subscription is paid for or you are even able to make money if you have enough traffic…

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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