May II 2007

31 May 2007

Fredric Morris, Editor-In-Chief, Connect-World
Fredric Morris
Editor-In-Chief
Connect-World

From Gidget to widget – the digital surf’s up!

Gidget – girl midget – was the name of the heroine of films and a TV series way back when surfing culture was at its beginning. Gidget symbolised a number of cultural trends all rolled up in one tiny Sandra Dee package.
We have come a long way since then. Today, the widget – oddly enough, a ‘real’ symbol – is the symbol of a profound, digitally driven, cultural change. Gidget was an iconic surfer; widgets are surfer – web surfer – icons.
Widgets – Windows gadgets, I think – are controls, the boxes, buttons or symbols on your computer screen that you click on using a mouse to say yes or no, to go from here to there or to initiate an action. There are ‘toolkits’ with thousands of widgets that programmers use to build on-screen, interactive, user interfaces.
Today widgets include pieces of code such the famous Flickr Badge. Flickr, a Yahoo subsidiary, is an online photo storage, sharing, and organisation service. You can stick a Flickr widget or badge, an icon coded in HTML or XML, into your blog or an email. When the reader clicks on the widget it connects directly to the Flickr site, and directly to the sender’s photos.
Bloggers love the Flickr badge. They can download all their photos to Flickr and anyone can access them; with the badge embedded in the blog they direct readers to the photos. This simplifies access and, since Flickr stores and handles access to the photos, lightens the load on the blogger’s own server. Flickr opened the door. Bloggers soon started using widgets to direct readers to a wide variety of services – news feeds, search engines, music, ads for a local bar or anything else that could be found on the Internet. Widgets have also become a desktop accessory for many; one click and you are at your favourite site or application.
You Tube moved the game to the next level. You Tube widgets let bloggers organise video clips and, in a very real sense, set up their very own, no-cost, on-line video channels. Bloggers, if for no other reason than this, will fight to the end for net neutrality.

The widget is one of the many developments that are paving the way for the age of personalisation and we know its time is coming fast; Microsoft’s Vista has incorporated its own version of the widget called, quaintly enough, a gadget. This fits quite well with the new XML based Microsoft standard for MS Office documents. Widgets and XML were made for each other, together they simplify access to relevant material and make it easy to move closer to a truly personalised – everything you want, at your fingertips – experience.
AOL recently announced widgets for its Instant Messenger service and Microsoft, within the last few days announced Popfly, a hosted service that lets non-technical users put together, or ‘mashup’, the content from different websites using a visual tool. Popfly helps users embed widgets on their own sites that point to material on other sites and share it with others.
In addition to widgets, Microsoft is pushing its mobile version of Windows. At the recent 3GSM show in Barcelona MS executives were eagerly showing off their new full-keyboard, 5-inch screen, Internet enabled, pocket phone computers with mobile versions of Widows and Office. Microsoft believes that mobile computing will be a significant part of their business and they also know that these pocket mobile Internet devices will – one day soon when all the practical problems have been dealt with and the prices drop – be the world’s primary Internet access device.
I think mobile might well prove to be the catalyst that accelerates the switch to Internet based marketing and advertising. Mobile is always-on, always-carried mass media – the first and only one of its kind. It may be a mass media, but it brings a personal experience. Mobile is already in use in many parts of the world to make payments or transfer funds using the pre-paid credits stored in the phone. Indeed, this sort of payment has a great future in the developing world. Nigeria, where most people have neither bank accounts or credit cards, is a good example of this service; people there can even transfer mobile phone credits to the mobile phones of, say, family members in another town. The credit can then be redeemed locally for cash.
Cell phone credits, together with widgets, might very well be one of the keys to popularising the use of on-line-rent-it-for-pennies-whenever-you-need-it software, the next big push in the software market. Rent-it-as-you-need-it seems to be an ideal way to have little used software on hand when you unexpectedly need it without having to load vast amounts of rarely used software on mobile Internet-connected devices.

On-line advertisers of every sort are planning how to use widgets to distribute content entertainment, news, technical information, programming guides, and just about anything else they can imagine.
Microsoft’s recent inclusion of widget facilities in their new operating system, their just announced purchase of a major on-line advertising agency, their discussions with Yahoo about a merger or association, and Popfly are not separate facts; they are not linked coincidently. Each of these facts point to an overall strategy; Microsoft wants to be at the forefront of the move to Internet carried one-on-one advertising.

Marketing specialists agree – the Internet is the growth media for advertising. The Internet offers advertisers a wide variety of ways to discover what net surfers like and aim advertising directly at them according to their known interests. The Internet will not eliminate TV, radio, print, point-of sale or other advertising media, but it will make a big dent in the advertising dollars spent for all other advertising. Many marketing experts predict that Internet-based advertising will, in time, become the biggest game in town.

The interconnections and implications of all these developments are rather difficult to sort out just yet. When Sir Walter Scott wrote, “Oh what a tangled web we weave…”, today’s Web was still many years in the future, so he had no idea how unintentionally prophetic he was. Still, certain connections can be made and some facts tied together into a plausible scenario.
I can imagine a not so distant future where blogs – many amateurs, but many professionally produced by or for companies – populate the Web. Much if not most of the material is ‘mashed up’, taken from links to other sites. The blogs are often hosted by an on-line blog publishing service that is paid for by advertisers. The blogs are loaded with widgets that direct traffic through an on-line ‘click-audit’ site to the final destination. The click-auditors mine the data they accumulate to determine the sort of tastes the viewers of each blog tend to have and directs the appropriate ads to these blogs.
Really popular blogs that attract people with expensive tastes and fat wallets will command top dollar for the ads they carry, and the revenue will be shared by the bloggers, the publishers, the click auditors, the on-line ad agencies, the content producers and, no doubt, a number of other service specialists that have yet to be invented. Producers, even advertisers that want to attract more viewers to their ads, will provide content aimed specifically at a popular blog’s viewers.

One day there will be blogs with viewer numbers that rival popular television shows, but the real strength of the blog universe will always be the enormous numbers of blogs – I’ve heard there are some 55 million already; there will be a blog, many blogs, for any taste or interest. With click auditor information, advertisers will have a field day micro marketing and micro managing their product messages.
The waves on the Web are getting higher – the digital surf is up.
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Our next Connect-World Asia Pacific Issue will be published later this month.
The issue will be widely distributed to our reader base and, as well, at shows where we are one of the main media sponsors such as: IIR Telecoms & Technology (28-31 May, Singapore), Broadband World Forum Asia (5-8 June, Beijing), CommunicAsia (19-22 June, Singapore) – Indo ICT 2007 Expo Forum (11-13 Sept, Jakarta), and Telecomp Vietnam (19-22 Sept, Hanoi).
The theme of the upcoming issue is: Next generation strategies – a look at the new environment part II: – regulation, convergence, new technology and the enterprise.

The changes brought by today’s information and communication technologies have unsettled the sectors involved and raised a series of profound questions that policy makers and regulators throughout the world are struggling to deal with. Business users are finding that buying technology and learning to use it is just the first step; to really take advantage of the new technologies and tackle the competition they often have to re-invent their processes, systems and products – even the corporate culture and the company itself. Governments and institutions, like businesses, have to re-think their systems and services in terms of what the new technologies can do, but the payoff in better services, greater efficiency and reduced costs can quickly re-pay the effort. The new technology is infiltrating itself into the daily lives of people in the world’s great cities and in its remotest reaches, bringing basic communications, entertainment and new life-changing educational, medical and business services.

Enterprises of every sort, manufacturers, systems developers, content providers, distributors, operators, carriers; each and everyone in the sector will feel the change as will, indeed, those that use the technologies. New business models, new partners, new marketing, new competition will be the rule.

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May I 2007

31 May 2007

Fredric Morris, Editor-In-Chief, Connect-World
Fredric Morris
Editor-In-Chief
Connect-World

Survival – a reality show

Pity the poor operator. Once the rulers of all they surveyed, they now seem like cornered lions – big, strong and dangerous yet, to be sure, but on the defensive and backed against a wall.

Telco operators have advanced cases of pipeophobia; they are deathly afraid of the pipe, or rather becoming mere operators of big fat dumb cheap pipes, BFDCPs, of ending up as simple bit pushers. Bit pushing can be a good business, but there is little growth or margin in it.

Voice is the telcos’ core business, but they are not safe even in this market. Internet-based competition such as Skype, cable companies offering their own voice over IP (VoIP) services and worse – mobile operators – are aggressively gouging away at the core and winning. Telco voice revenues and market share are steadily decreasing.

They are losing ground in their own market, so the telcos are trying to shift the battlefront and compete with the cable companies by concentrating on the residential market and offering entertainment.

Content, content or content – they’ve got a great choice – is what operators hope will save them from a BFDCP fate. By concentrating on the residential market, investing heavily in the sort of brawny broadband that Internet TV (IPTV) demands and competing with the cable operators, they hope to regain the ground they have lost in voice revenues.

It’s an interesting plan, but some of the lions are sure to become dog food. There are many experienced, successful, content providers out there, and although operators might have courage, they lack some of the weapons this battle demands – they totally lack experience lining up and negotiating cool, audience grabbing content, content, building play lists and selling entertainment. I wonder how they plan to battle the Internet service providers and players of all sorts who are also eyeing this market. Google/YouTube, Amazon and Yahoo are among the many companies with deep pockets and a history of successful innovation said to be interested in this market.

The operators have some strong points as well. They own millions of customers; they have big networks with millions of subscribers that reach just about everyone. Their infrastructure and network topology facilitate interactive services, digital video recorder services, programme time shifting, video on demand and a host of other services without the need for, or cost of, a set-top box. It will be interesting to see, how many of the operators can effectively use these and other advantages, – they have many, to beat the cable companies at their own game. Succeeding with content, with entertainment, takes better marketing and organisational skills than succeeding with voice.

The move to content will be expensive. Upgrading to broadband robust enough to deliver high definition IPTV and fast data to a five-TV-everyone-has-a-PC family will not be cheap. The money and resources spent on this shift will – necessarily – cut the amount available to invest in enterprise systems and services.

Telcos have suffered as many enterprise networks have shifted to commodity priced IP-based communications and away from traditional, higher cost, virtual private network circuits. Even so, carriers have some real strengths and natural advantages in this sector. The telco’s central position makes it easy for them to control and simplify the administration and security of an enterprise network. It is a significant challenge for companies with employees, operations, offices and clients throughout the world to maintain, administer their networks and keep their communications safe and secure. Big carriers, of course, have been doing just this for years and are getting better and better at it. The telcos sit like spiders at the heart of a network built with increasingly intelligent equipment and run by astoundingly sophisticated software. They have a view of the entire network and can effectively head off a wide variety of threats and even counter hard to manage denial of service attacks. They can also effectively administer and maintain communications worldwide.

Operators are hoping for an end to net neutrality, the equal treatment of all users on the Internet, so they can cash in on the investment they are making to upgrade their networks. Big users such as Google, Yahoo and the like are – no surprise – defending net neutrality tooth and nail, and most of the world’s users are behind them. Despite all the flag waving and loud avowals of save-the-Net ideological purity, the big guys just want to save a buck. Personally, I like the Net the way it is, but the operators have a point, ‘there is no free lunch’, someone has to pay for the upgraded services. Operators have to upgrade their networks to provide a reliable pipe for their high definition IPTV services and they don’t like the idea of giving their competition a free ride.

Most of the arguments for and against net neutrality can be summed up quite simply. First there are deeply felt arguments welling up from the wallet – operators want users to pay for advanced services and the users don’t. Second, there are the innovators. Net neutrality is said to encourage innovation, after all, on today’s Net if you have an idea you can put it to work. Just do it; there is no one to ask, nothing to approve nothing to pay for.

Intelligent networks, using deep packet inspection and other techniques, can classify much of the traffic that flow through. Without net neutrality, intelligent networks might well levy surcharges on heavy users – or anything they suspect is commercial. Without net neutrality, operators will have more money to build better pipes, guarantee quality of service and build functionality into the network to automatically handle some of the functions that applications must now control, but innovation might be stifled. With net neutrality, the argument goes, network growth will slow, service will degrade and the new innovated services will be severely handicapped.

At best, both arguments are only half-right; even without net neutrality, free markets and innovation will probably drive network costs down. With net neutrality, technology and innovation will drive costs down. In the long run, bandwidth – no matter what the model – will become a low-priced, utility-like, commodity. Innovation, as long as the need exists, will continue. It might slow a bit in the short term, it might even change direction, but if an idea is good and a real need exists, experience tells us there will be a way to overcome the obstacles on the way to the market. The demand for more and better telecom services is always there. With or without neutrality, someone, somewhere, will invent a better, cheaper way to meet the need – and rip whatever the current market model might be to shreds.

Technology is the key to the issue. If the networks can charge, they will build increasingly intelligent networks – first to figure out who they can charge more and why – but also to do more. If they can’t charge for privileged access and transmission, they will still build intelligent systems and charge for additional value-added services. With intelligence embedded in the network, carriers can speed service handling, route content intelligently using XML tags, provide special services for applications, enhance network security. In the end, the networks will charge more to introduce new services; the service sets might change, but the question really is will they just charge more or a lot more.

Just the thought of intelligent networks has equipment vendors dancing in the street. In truth, just about any disruptive technology keeps them up at nights dreaming about massive new markets. The problem is that massive new markets, as we have seen again and again, tend to force massive realignments in the sector. As service companies merge, consolidate and fall by the wayside in the struggle to survive the forces unleashed by disruptive technologies, equipment suppliers lose traditional customers, potential buyers get bigger and fewer, and competing equipment suppliers are forced, themselves, to merge or die.

Our next Connect-World Asia Pacific Issue will be published later this month.

The issue will be widely distributed to our reader base and, as well, at shows where we are one of the main media sponsors such as: IIR Telecoms & Technology (28-31 May, Singapore), Broadband World Forum Asia (5-8 June, Beijing), CommunicAsia (19-22 June, Singapore) – Indo ICT 2007 Expo Forum (11-13 Sept, Jakarta), and Telecomp Vietnam (19-22 Sept, Hanoi).

The theme of the upcoming issue is: Next generation strategies – a look at the new environment part II: – regulation, convergence, new technology and the enterprise.

The changes brought by today’s information and communication technologies have unsettled the sectors involved and raised a series of profound questions that policy makers and regulators throughout the world are struggling to deal with. Business users are finding that buying technology and learning to use it is just the first step; to really take advantage of the new technologies and tackle the competition they often have to re-invent their processes, systems and products – even the corporate culture and the company itself. Governments and institutions, like businesses, have to re-think their systems and services in terms of what the new technologies can do, but the payoff in better services, greater efficiency and reduced costs can quickly re-pay the effort. The new technology is infiltrating itself into the daily lives of people in the world’s great cities and in its remotest reaches, bringing basic communications, entertainment and new life-changing educational, medical and business services.

Enterprises of every sort, manufacturers, systems developers, content providers, distributors, operators, carriers; each and everyone in the sector will feel the change as will, indeed, those that use the technologies. New business models, new partners, new marketing, new competition will be the rule.


April II 2007

1 May 2007

Fredric Morris, Editor-In-Chief, Connect-World
Fredric Morris
Editor-In-Chief
Connect-World

Darwin at C5
The IEC’s C5 (Customer-Centric Converged Communication and Content) industry event was born as the 21st Century Communications World Forum and took place in London. This year, under the sponsorship of Telecom Italia, it moved to Milan and was renamed to highlight forces that are driving change in the telecom industry in general, operators and service providers in specific – customer focussed, personalised services, convergence of every type – but especially between networks, and the content-based services, IPTV for example, that most operators have great hopes will be driving future revenue streams.
This was a professional event, built around the concerns – a long list – that operating companies are facing. It struck me at the event, that Darwin would have loved watching today’s ICT sector. If he had grown up in the age of the PC and travelled around the world via the Internet for a few years observing the strange behaviour of the ICT sector he might have written an Origin of the Telecom Species about merged and converged companies, systems, networks, devices and services. Mr Darwin, though, would be hard pressed to explain some of the hybrid beasts that converged corporations, technologies, and systems have bred – high-tech basilisks, hippogriffs, centaurs, chimaeras and medusas – in their entrepreneurial quest for survival.
Darwin’s book would make compelling reading – rivalling the DaVinci Code; he might even have called it the Morse Code.
The conference programme covered a wide variety of issues critically important to operators and service providers. Convergence of everything with everything – in all its forms and guises – to beat the competition and stay ahead of the market was at the forefront of concern. What is the best strategy for network convergence? What are the best technical, business and market strategies for fixed-mobile convergence? The rapidly accelerating need for bandwidth and ways to deliver it, mainly fibre and broadband wireless, was another hot topic. What are the most cost effective last mile access strategies for every conceivable circumstance? What is the best way to provision services? What sort of strategy do carriers need for their corporate customers – does Ethernet measure up? How can quality of service be guaranteed given the rush to enter new markets?
IMS, the IP Multimedia Subsystem, is a general-purpose, open industry standard for voice and multimedia communications using Internet Protocol-based packet networks. It is at the heart of the network evolution strategies of a great number of companies. IMS aims to simplify, to unify, access to network services for just about any type or mixture of networks. It is considered to be a key enabling technology on the road to next generation fully converged networks.
True believers speak of IMS with something approaching religious awe. Nevertheless, there was a good deal of talk at the show about the failure – so far – of IMS to be put to good use in more than a few places. However, Stéphane Téral from Infonetics Research threw a bit of cold water on the fire and sparked a lot of comment and talk by presenting evidence that there is a snake in the Garden of Eden. People that had been loath to speak of their negative experience, began to open up and admit their own experience with IMS could be a good deal better. As I walked through the show, the subject came up, quite spontaneously and without prompting, several times. I have never had anyone speak spontaneously of their concerns about IMS before. It seems that after the Plenary Panel – Lessons Learned from IMS Deployments – where the problems were discussed people felt more at ease discussing their own problems. It seems that implementing IMS is a lot more complicated than most expected. IMS is the great hope of most service providers to reduce the complexity and cost of network and service convergence. Although it might be simpler than the alternatives it still isn’t simple enough and the vendors are making the situation worse. Each vendor is offering its own witches brew of IMS features and this has left service providers confused and nervous – it’s been hard, in practice to find the promised level of benefits.
Service providers have been looking toward IMS as a standards-based way to ease the creation of new multimedia services, to tie together their diverse networks and generally reduce their operating expenses. Enhancing the user’s experience was low, almost at the bottom, of the service provider’s list. All agree, IMS has a great future, but many will agree as well that the future will not arrive as soon as most would like.
Matt Bross, the BT Group’s CTO, is one of the ICT sector’s most interesting thinkers and one of my favourite speakers. As a C5 keynote speaker he stalked bear-like around the stage swotting industry myths especially about convergence. According to Matt, we’ve got convergence today, but not a converged subscriber experience; it’s hard not to agree. We still have to chase messages around for example, they aren’t automatically available on your cell phone if someone called the voice mail at your home or office and vice versa.
Matt’s talk was devoted primarily to leveraging the investment needed to drive the innovation needed to survive in a global marketplace, but he pinpointed the chief concern of all the show’s participants: “How do we make money on our networks”.
A phrase heard over and over again, whenever ICT executives meet, is ‘business model’. Everybody is changing theirs, developing new ones, or seriously searching for today’s holy grail – a sure-fire business model that deals with all the contradictions, disruptive technologies and uncertainties of the market. Business model, of course, is just a fancy way to say, what Matt Bross meant – how do we make money on our investments?
José Costa e Silva, who will head the new Nokia Siemens Network’s services division, neatly answered my string of questions about IMS and other standard service related issues, but then he helped me see more clearly where the industry might be heading in the future. He pointed to the growing, almost unmanageable, complexity of the converged environment and the difficulty in mastering and maintaining the know-how within all but the biggest organisations. He expects that service providers will tend increasingly to outsource the operation of all their complex systems including their networks.
It makes sense. There already is a growing tendency to outsource parts of the operation, so, perhaps, one day just about everything but the customer will be outsourced, so service providers can concentrate on their core business, providing service to the subscriber. The systems provider has the greatest knowledge and depth of talent to deal with the operation of their systems, so instead of going to a third party, there will be a growing tendency to choose a ‘second party’, the system or equipment providers to run the shop.
Darwin spoke of species developing to fill unoccupied niches in the ecosystem. Is this the niche that the equipment manufacturers are destined soon to fill?

Our next Connect-World Europe Issue will be published later this month. This edition of Connect-World will be widely distributed to our reader base and, as well, at shows where we are one of the main media sponsors such as: Sviaz / Expo Comm (14-18 May, Moscow), Wimax World Europe (29-31 May, Vienna), and Von Europe (11-14 June, Stockholm).
The theme for this issue will be, The network business – strategies for tomorrow.
When speaking of networks, conventional wisdom and traditional business models no longer work as they did. The lines are blurring in the fixed, mobile and even broadcasting markets. Wired networks now handle traffic once thought suitable only for wireless and wireless is substituting wired in a broad range of applications. Seamless handoffs between wired and wireless networks and, indeed, mergers, partnerships and consolidations bringing together networks and players of all sorts ñ further confuse the once prettily organised networking landscape.
This issue will examine what these changes in technologies and the market mean for the sector. How can the residential and business consumer best be served? What does the future hold for network operators of all types?