Bringing the 'social' out of the operator walled gardens

[Mobile services have long been a carefully guarded commodity, kept within the ‘walled gardens’ of network operators. But as innovation moves to the software and social era, operators need to adapt. Guest author Avner Mor discusses how networks are inherently social and why they should open their walled gardens to developers]

Bringing the 'social' out of the operator walled gardens

A ‘walled garden’ is the term aptly applied to the last decade of mobile operator services. And Facebook is the generic name aptly applied to the social network revolution of our times.

Wikipedia defines ‘walled gardens’ as referring “to a carrier’s or service provider’s control over applications, content, and media on platforms … and restriction of convenient access to non-approved applications or content”. This has been the common sense approach to operator strategies; build high walls to protect your revenues – which by now we know is becoming irrelevant. Mobile operators are facing market saturation, declining ARPU, higher subscriber acquisition costs (see iPhone), fierce regional competition and viable threats of being replaced by the over-the-top players. In 2009 alone, global operator ARPU fell by 7.3% year-on-year and is forecasted to further decline around 10% y-o-y  according to Strategy Analytics. How come operators – having a ‘social’ network at their very core – have been steadily declining, whereas Facebook has risen to a 600 million user, $35B valuation business in just 7 years? Let’s take a step back.

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2010 will probably be known as the year where mobile service innovation has moved squarely to the software domain. Think about the 100,000s of applications against the 10s of operator services launched in the last 2 years.

To compete in this software world, operators/carriers need to leverage their network capabilities to compete with the over-the-top players. For example, think of a voice application that automatically switches to taking a text or voicemail if it knows the other user is busy. Or a service provider in the travel business that can target their Java app and SMS campaign to users who travel abroad frequently. Or web pages that feature a 1-click-buy based on keying in your mobile phone number. Or a “where are my friends” service, where you opt-in to a friends location request no matter what phone you ‘re using. Or travel recommendations where a virtual concierge suggests places to visit in your holiday based on where your friends have been.

Such innovation has shunned the mobile world because network operators have adopted the walled garden business model of building a supermarket with their own branded goods – rather than a shelf (a platform) for third party goods that leverages on the social aspects of the platform. To compete in a world where innovation is defined in software and social, operators need to become a platform – and compete over the top, not in the network.

A platform business model is about leveraging operators’ underutilised, walled network assets, taking a cut from the delivery of innovative services, in the same way that Apple takes a cut from the delivery of mobile apps or Facebook takes a cut out of ad delivery. It’s not just operators that are playing in this developer game – it’s handset vendors investing in developer programs and app stores, online brands opening their assets to developers (from the BBC to Facebook) and Digital TV operators exploring methods to open STB, EPG and DVR channels to developers. Yet operators are the most ubiquitous and most social players of them all.

Leveraging the social side of the network

Networks hold lucrative assets within their walls including voice, messaging, location, presence, user authentication, billing – plus social graph, user profile and preferences. Take location for example; despite wide penetration of GPS receivers in handsets, network-based location covers any device, works indoors, and is particularly suited to emerging markets.

More importantly, mobile networks hole a treasure trove of information about its users; based a few key information like age bracket, ARPU bracket, address region, roaming characteristics and device model which are provided in an opt-in model, one can deliver better search results, ads or campaign targeting. Think about how restaurant recommendations can automagically cater to your spending habits, taste for international cuisines and social lifestyle – an app that knows you from day one.

There are tons more of examples where network APIs can enable unique applications. Yet, when developers try to connect their app to an operator network they experience barriers and restrictions, such as technology fragmentation, long and expensive technical integration, tedious commercial engagements, long time to payment, plus distribution challenges. What’s worse, developers need to engage and integrate separately with each operator. All of these factors hinder the vast majority of developer innovation and essentially diminish the operator ability to be the center of innovation gravity.

Many infrastructure vendors have jumped into the opportunity to connect operator networks to developers:

– Alcatel Lucent – A dominant SDP provider, extended a hosted ‘OpenAPI’ service for developers, providing Consent Management and  ‘LBS API’

– Ericsson – through their ‘Ericsson Labs’ initiative, the SDP provider offers a broad ‘Maps & Positioning’ API set: web & mobile maps, 3D maps, Cell-id look-up (with its own worldwide cell-id database) , operator based  cell-id and  consent management . Ericsson is currently working with operators in Sweden and Norway.

– Amdocs –  an OSS/BSS leader moving into positioning as an open mobile service providers network to 3rd parties: “service providers have the opportunity to drive new revenues by monetizing their unique assets – networks, customer information, charging, billing and customer care…”

– Huawei – An emerging market player builds its position by partnering America Movil and Telefonica in LATAM. Telefonica has completed in 2009 the deployment of Huawei’s openness platform across 13 Latin American countries

Social cloud APIs

Yet such efforts are limited to single-operator deployments. In addition, they have limited developer outreach potential as many these infrastructure vendors stem from the network, not the software world.

The logical next step is a single, cloud-based network API platform across multiple operators, spanning not just regions and multiple screens, but the entire application lifecycle: develop – deploy – discover – monetize. This network API cloud paradigm is essentially a 4-sided platform connecting users (who discover and consume services), developers (who innovate and create services), the applications themselves and the developer program partners (with the tools and technology, go-to-market, support and community assets). Naturally, a multi-operator paradigm needs to support variable access policies for operator assets, including access to network assets, charging subscribers and accessing user info.

Such a developer-friendly cross-operator pilot program was announced recently in the form of WAC, the Wholesale Applications Community, a joint effort to create a standards based apps platform that operators can leverage to build their storefronts. Network API’s are also part of WAC, based on OneAPI, a Commercial pilot project aiming to establish a unified, developer-friendly API environment across operators. Aepona is the technology provider for the GSM Association’s “OneAPI” initiative.

So is WAC the answer? Operator alliances are essential to achieve this goal. Yet, historically we have seen internal complexity and operator competing agendas hinder effectiveness of these pilots. The missing piece is an infrastructure player that understands software innovation, developer programs and running telco-grade cloud infrastructure. A Facebook-like (software) player that can bring the Facebook out of the operator walled garden.

– Avner

[This article is dedicated with appreciation to the Telecom team at Microsoft Israel R&D center
Avner Mor has over 25 years of experience in senior management positions with leading Israeli hi-tech telecom companies and start-ups. In his last role, Mor served as the General Manager of Telecom Products at the Microsoft Israel R&D center.]

Enter the Cloud Phone

[With the adoption of SaaS applications, augmented reality, visual recognition and other next-gen phone apps, the smartphone processing model is looking for help from the Cloud. Guest author Vish Nandlall introduces the concept of the Cloud Phone and the technology advances that can make this happen]

Are smartphones converging with laptops ? While smartphones enable a rich user experience, there exists an order of magnitude gap in memory, compute power, screen real-estate and battery life relative to the laptop or desktop environment (see table below). This disparity renders the whole question of smartphones vs laptops an apple vs oranges debate. It also begs the question: can the smartphone ever bridge the gap to the laptop?

Smatphones Laptops
Apple iPhone 4 HTC EVO 4G ASUS G73Jh-A2 Dell Precision M6500
CPU Apple A4 @ ~800MHz Qualcomm Scorpion @ 1GHz Intel Core i7-720QM
@ 2.80GHz
Intel Core i7-920XM @ 2.0GHz
GPU PowerVR SGX 535 Adreno 200 N/A N/A
RAM 512MB LPDDR1 (?) 512MB LPDDR1 4x2GB DDR3-1333 4x2GB DDR3-1600
Battery Integrated 5.254Whr Removable 5.5Whr 75Whr 90Wh

Source: vendor websites

As a matter of physics, the mobile and nomadic/tethered platform will always be separated along the silicon power curve – largely driven by physical dimensions. The laptop form factor will simply be able to cool a higher horsepower processor, host a larger screen real-estate and house a larger battery and memory system than a smartphone.

Does a smartphone need to be laptop ?
Yes it does…or, at least, it soon will. The low-power constraints of mobile devices have been the official Apple argument behind the recent Apple-Adobe feud – and Apple’s acquisition of PA Semi is a further testament to the importance of the hardware optimization in mobile devices.

The processing envelope for mobile applications is becoming stretched by the demands of next-generation mobile applications; always-on synchronization of contacts, documents, activities and relationships bound to my time and space; the adoption of Augmented Reality applications by mainstream service providers that pushes AR into a primary ‘window’ of the phone; advanced gesture systems as MIT’s “sixth sense” that combine gesture based interfaces with pattern recognition and projection technology; voice recognition and visual recognition of faces or environments that makes mobile phones an even more intuitive and indispensible remote control of our daily lives.  All these applications require the combination of a smartphone “front-end” and a laptop “back-end” to realise – not to mention having to run multiple applications in parallel.

The appearance of these next-gen applications will also create greater responsibilities for the mobile application platform: it is now important to monitor memory leaks and stray processes sucking up power, to detect, isolate and resolve malicious intrusions and private data disclosure, and to manage applications which require high-volume data.

So we come back to the question, is there a way to “leapfrog” the compute and memory divide between tethered and mobile devices? The answer, it turns out, may lie in the clouds.

Enter the Cloud Phone
The concept of a Cloud Phone has been discussed oftentimes, most recently being the topic of research papers by Intel labs and NTT DoCoMo technical review.

The concept behind the Cloud Phone is to seamlessly off-load execution from a smartphone to a “cloud” processing cluster. The trick is to avoid having to rewrite all the existing applications to provide this offload capability. This is achieved through creating a virtual instance of the smartphone in the cloud.

The following diagram shows basic concept in a nutshell (source: NTT DoCoMo technical review)

The Cloud Phone technology has been brought back in vogue is due to advancements in four key areas:

  1. Lower cost processing power; Compute resources today are abundant, and data centers have mainstreamed technologies for replicating and migrating execution between and within connected server clusters.
  2. Robust technologies for check-pointing and migrating applications; Technologies such as live virtual machine migration and incremental checkpointing have emerged from the classrooms and into production networks.
  3. Reduced over-the-air latency; the mobile radio interface presents a challenge in terms of transaction latency. Check-pointing and migration requires latencies on the order of 50-80ms – these round trip times can be achieved through current HSPA, but will become more realistic in next-generation LTE systems. Average latencies in a “flat” LTE network are approximately 50ms at the gateway, which suddenly makes the prospect of hosting the smartphone application on a carrier-operated “cloud” very much a reality. Note that past the gateway, or beyond the carrier network, latencies become much more unmanageable and will easily reach 120ms or more.
  4. Mobile Virtualization; this technology offers the ability to decouple the mobile OS and application from the processor and memory architecture, enabling applications and services to be run on “cloud” servers. This has become an area of intensive research in mobile device design, and was covered in an earlier article by OK Lab’s Steve Subar.

A cloud execution engine could provide off-loading of smartphone tasks, such as visual recognition, voice recognition, Augmented Reality and pattern recognition applications, effectively overcoming the smartphone hardware and power limitations. This model would also allow key maintenance functions requiring CPU intensive scans to be executed on a virtual smartphone “mirror image” in the cloud. This would also facilitate taint checking and data leak prevention which have been long used in the PC domain to increase system robustness.

Another consequence of the Cloud Phone model is that it provides a new “value-add point” for the carrier in the mobile application ecosystem. The low latency limitations will require optimizations at the radio-access network layer implying that the network carrier is best positioned to extract value from the Cloud Phone concept – plus operators can place data centres close to the wireless edge allowing very low latency applications to be realized. This doesn’t rule out a Google entering into the fray – indeed, their acquisition of Agnilux may well signal a strategy to build a proprietary server processor to host such Cloud Phone applications.

The raw ingredients for the Cloud Phone are falling into place; more users are driven towards SaaS based phone applications, and HTML5 is being adopted by handset OEMs. There is no shortage of applications waiting to exploit a cloud phone platform: in July alone, 54 augmented reality apps were added to the Apple App Store. Google has also broken ground in the Cloud Phone space with Cloud to Device Messaging which helps developers channel data from the cloud to their applications on Android devices.

What other Cloud Phone applications do you see on the horizon? When do you see Cloud Phones reaching the market?

– Vish

[Vish Nandlall is CTO in the North American market for Ericsson, and has been working in the telecoms  industry for the past 18 years. He was previously CTO for Nortel’s Carrier Networks division overseeing standards and architecture across mobile and wireline product lines. You can read his blog at www.theinvisibleinternet.net]

Mapping the mobile ecosystem: top-20 most connected companies

Back in March we released the 3rd edition of the Mobile Industry Atlas, the definitive who’s who of the mobile industry. Since its humble beginnings in 2008, the Atlas has grown to more than 1,100 companies across 69 industry sectors; including all key companies, from 20:20mobile to ZTE, and market sectors, from Active Idle Screen solutions to Service Delivery Platforms.

To distill market noise into market sense, we have broken down the entire mobile ecosystem into four main categories:the core value chain, the suppliers to network operators, the suppliers to handset manufacturers and finally the services that run on top.

Top-20 most connected companies in mobile
We run some stats on our Atlas database and came up with an interesting analysis on the most ‘connected’ companies in mobile, i.e. the companies who have fingers (products) in most pies (market sectors).

At the top of the list are Nokia, Google, Microsoft and Qualcomm, which represent heavyweights from manufacturing, services, software and IP backgrounds respectively. Nokia appears in 17 market sectors including, the OS and Browser sectors, Developer Tools, Mobile Search, Barcode Services and Connected Addressbook sectors, to name a few.

It’s also instructive to analyse which market sectors are most frequently encountered within these top-20 companies: it’s operating systems, browsers, application stores, as well as content management & delivery infrastructure. These sectors are either building blocks as part of a more integrated offering (as in the case of operating systems or browsers), or high growth opportunities (as in the case of app stores).

How does this help me?
The main function of the Atlas is to provide a clear view of the key players operating in each sector of the mobile ecosystem. For example, the Handset Manufacturer Supply Chain can give you an idea of the leading companies operating in this part of the ecosystem, from chipset manufacturers and RF component manufacturers all the way to operating systems and browsers. It’s all in there, from the much-hyped Android platform to the more obscure plastics manufacturers and vendors of input technologies. Most of the Atlas is being a paywall, but you can see a sample here.

Under-the-radar sectors
We ‘ve showcased several under-the-radar sectors into the Atlas, including Application Analytics, Campaign Analytics and Service Analytics. These three sectors comprise the leading providers of usage and marketing analytics tools to developers and mobile web (or WAP) sites, as well as platforms for mining network or service data to extract service intelligence. Naturally, you ‘ll also find your typical hyped sectors like Mobile Ad Networks & Mediation Engines, as well as Mobile Advertising Platforms and Agencies. The Connected Addressbook sector is yet another category that has attracted a lot of media attention and is part of our Atlas.

The complete list of market sectors in the Atlas is below, broken down into the four main categories:

Network operator supply chain Handset manufacturer supply chain
– Billing platforms
– Call completion, voice messaging & voicemail
– Content Management & Delivery
– Content retailing and billing mediation
– Core network and radio infrastructure
– Customer support services
– Deep Packet Inspection
– Mobile media publishing platforms
– MVNEs
– OSS / BSS
– Service Analytics
– Service delivery platforms & Network APIs
– SMS/MMS gateways & aggregators
– Traffic & content optimisation
– Application environments
– Audio middleware
– Baseband and application processors
– Browsers
– Camera technology and subsystems
– Imaging and video middleware
– Input technology
– Multimedia chipsets
– Non-cellular connectivity components
– Operating systems
– Plastics & mechanics
– RF components
– Silicon
– UI frameworks
Core value chain Content and services
– Industrial design
– User interface design
– Reference hardware designs
– System integrators
– ODMs and contract manufacturers
– Handset OEMs
– Luxury handset OEMs
– Mobile network operators
– MVNOs
– SIM card OEMs
– SIM application vendors & services
– Distributors
– Retailers
– Active Idle Screen solutions
– Application Analytics
– Barcode Services
– Campaign Analytics
– Connected Address book
– Content backup & synchronisation
– Developer tools
– Device capabilities databases
– E-mail synchronization
– Enterprise mobility
– Games publishers
– IVR Platforms
– Mobile Ad Networks & Mediation Engines
– Mobile Advertising Platforms & Agencies
– Mobile banking and payments
– Mobile content publishers
– Mobile Device Management
– Mobile instant messaging and chat
– Mobile search
– Mobile social networking
– Mobile VoIP
– Navigation, Mapping and Location platforms
– On-Device Portal solutions
– Recommendation services
– Security solutions
– Software integration services
– White-label Application Stores
– Widget Platforms

The Mobile Industry Atlas is available in A1+ wallchart format or PDF, for carrying around in your iPad or sharing with colleagues.
What do you think of the Atlas and what would you like to see next?

– Matos