Showing posts from May, 2016

What is the Killer App for Smart Cities?

Some now believe smart cities will be an early and substantial market for Internet of Things apps and services. The problem is that there are any number of practical implementations, without clear and sustainable business models, yet.
Of course, nobody yet knows. It is conceivable that connected car, wearables, health or agriculture and manufacturing or even home automation theoretically could emerge earlier.
Parking, air pollution, traffic management, monitoring of water pipe leaks, streetlight management or wastewater management are some of the areas believed to be fertile ground for smart cities initiatives. Others might argue less-exotic implementations, such as municipal Wi-Fi, also count as “smart cities” programs.
But there are many sources of inertia, including unclear payback or business models, technology platform confusion and the cost of equipping end users and networks with sensor capabilities. It is not clear what sustainable revenue models look like, nor are there absol…

Banks Warming to Cloud Computing?

Large financial institutions traditionally invest heavily in new technology, but also are “conservative” about security issues and control. That some now seem willing to embrace moves to cloud computing might suggest change is coming.
Capital One is already in the process of shutting down five of its eight private data centers to move most of its data to AWS by 2018. Another "large" bank cited in the note said it's committed to shutting down all of its private data centers by 2020, although it's more likely to start with a hybrid of cloud and on-premise data centers, according to the note.
These kinds of changes will only speed up the adoption of the cloud by other sectors, too, expanding the overall pie for public-cloud vendors. Gartner estimates spending on public-cloud services to increase from $85 billion in 2014 to $180 billion in 2019, according to a note by Bank of America.
source: IDC

Verizon Will Not Wring Blood from a Stone

You cannot, as the aphorism suggests, wring blood from a stone. Neither, history suggests, can an industry in fundamental decline afford to boost its own costs of operation. To have any hope of maintaining cash flow as long as possible while the business declines, firms have to control costs.

And, as always within any ecosystem, one segment’s “costs” are another segment’s “revenue.” That is rarely pleasant, for workers, suppliers, collaborators, investors or managers, in a declining business or industry.

The new Verizon contract that ended a strike might provide an example. The new contract adds 1,400 jobs and provides a 11-percent wage increase. Union officials argue that Verizon has been understaffing fixed network workforces, a charge that resonates.

Verizon has been moving spending towards mobile, and away from fixed network operations, to match its revenue generation.

And wages for U.S. workers have been depressed for quite some time. Workers think they deserve more of the surplus…

More Cloud Means Fewer Moves, Adds, Changes: Bye Bye MAC Revenue

Disruption across the information technology and communications businesses is a virtual certainty as cloud-based computing grows.
And that applies equally to sales channels, software platforms, hardware suppliers and services operations. For decades, revenue models in some parts of the business have been built on “moves, adds and changes.”
As enterprises, mid-market and small business customers move operations to cloud-based alternatives, the revenue formerly earned by MACs can diminish.
Hutchinson Networks, a U.K. systems integrator and professional services provider, provides a case in point.
The fundamental problem: enterprises won't need systems integration and professional services if they shut down their IT operations and move to the cloud.
One example: Hutchinson used to support SMEs with their own data center operations, to support Microsoft Exchange, Active Directory, Sharepoint and phone services.
Increasingly, those businesses are going to Office 365, and don't need on…

Android N IVI for Connected Car

Leverage in the connected car market is not at all obvious, and a new move by Google shows why. Any “in vehicle infotainment” system requires an operating system or platform that allows in-car systems to communicate with mobile networks.
As you might guess, there are many rivals in that area. Google and Apple, BlackBerry, Linux, GENIVI and Tizen are among the proposed OS approaches. Auto OEMs can build their own or source a platform.
Google already offers Android Auto. But it also offers Android N IVI, which allows the Android smartphone itself to supply the mobile network link and intelligent car functions.
Android N adds support for AM/FM radio, HVAC controls, Bluetooth links between the OS and the car’s dialing system, similar controls for media streaming, and the option for digital dashboard instrumentation clusters.
Of course, and Android N IVI system will work closely with Android Auto, but that same functionality could presumably be achieved by simply syncing the driver’s Googl…

Why Google is in the Internet Access, Mobile, Linear Video and Voice Businesses

In addition to Google Fiber, which has Google operating as a fixed network provider of Internet access, linear video entertainment and soon, voice, Google Fi is a commercial mobile virtual network operator in the U.S. market.
But those efforts are not the only initiatives Google parent Alphabet has under way. After dabbling in municipal Wi-Fi and other Wi-Fi networks (train stations in India, for example), Alphabet also has several wireless initiatives under way. Project Loon entails use of a balloon-based mesh network in the sky, using Long Term Evolution 4G signals to directly reach end user mobile devices. That approach necessarily entails working with mobile operators who are willing to allow Project Loon to use licensed frequencies. At the very least, that entails Project Loon becoming a wholesale customer of one or more mobile operators in a market, and then acting as both backhaul and access network. The precise nature of retail relationships might change over time. Initially, Pr…

OTT Revenue is Growing Fastest in the Mobile Ecosystem

By 2020, Mobile Service Providers Will Have Lost 10% of Ecosystem Revenue; App Providers Will Have Gained 10% More

It is getting harder and harder, all the time, to describe what is happening in the mobile ecosystem, for the simple reason that the ecosystem now includes truly-significant revenue from application, device and service providers.
Mobile service providers generally earn about 60 percent of identifiable mobile ecosystem revenue, including network infrastructure; components; apps, content and advertising; devices as well as access.
Over the top app providers earn about 10 percent of ecosystem revenue while device suppliers earn about 22 percent of ecosystem revenue.
GSMA believes that mobile access provider revenue share will decline to perhaps 50 percent of ecosystem revenue by 2020, while device share remains about the same and app revenue might grow to 20 percent of total ecosystem revenues.
In other words, GSMA predicts that the biggest changes will have mobile operator share of ecosystem revenue share declining about 10 percent, while app providers gain about 10 percent share.
The ca…

80/20 Has Many Implications

One should not underestimate the importance of the Pareto theorem, commonly known as the “80/20 rule,” where 80 percent of results come from 20 percent of instances.  
One example are financial returns from the Standard and Poors 500 index, over the period 1989 to 2015, when just 20 percent of stocks accounted for 100 percent of index gains.
Put another way, 80 percent of stocks in the index actually had a collective return of zero percent.
source: A Wealth of Common Sense
In communication or other markets, the Pareto theorem matters because it tends to describe the broad structure of markets, as well as the generation of revenue and profits within each market.
In the Indian mobile services business, just 17 percent of customers generate 60 percent of revenues, for example.
The fundamental principle is that effort and outcomes are non-linear. A small number of inputs or instances drive most of the outputs or results.
The practical implication for communications or app providers is that a …

Multiple Networks Needed to Support Smart Cities, Says GSA

Perhaps predictably, the GSA has authored a white paper on the central role of communications in smart city efforts.
Also predictably, the GSA, representing the interests of platform suppliers of many types, supporting rival IoT platforms, argues that an “all of the above” approach will be needed.
“Multiple networks are required to underpin the smart city,” GSA argues. “A cellular network is highly unlikely to be able to deliver appropriate connectivity for every smart city application, even if it is able to satisfy many requirements.”
“Even with the emerging narrowband IoT (NB-IoT) networks and partnerships with competing IoT LP-WAN providers, for the foreseeable future, a smart city will use multiple network technologies,” GSA argues.
An appealing a political statement for an organization that has to support all its members, the position also is unlikely to happen, on a wide scale, when IoT services and networks actually are commercially deployed on a mass scale.
By definition, and ex…

Hosted PBX or Hosted UC Might be Substantially Uncompetitive at Firms Representing Nearly 70% of Workers

When market researchers aggregate a whole bunch of different revenue streams together, and then call them all “one market,” it is a clear sign that each of the constituent markets is small. Only by aggregating can a market of reasonable size be shown to exist.

That arguably is the case for a host of services collectively lumped into the hosted UC or hosted PBX category.

In 2008, the combined business phone system, conferencing, messaging, unified communications, contact center, collaboration, rich media, email and calendaring markets collectively amounted to perhaps $29 billion globally.

By 2014 the market perhaps had shrunk to perhaps $19 billion, according to some estimates.

In fact, despite hyperbole about “huge new markets,” the truth is that the broad UC and IP communications businesses are not that big. In fact, one might argue that traditional business voice systems are a flattish business, while all manner of software-based services might be where the growth is happening.