At least some estimates of the eventual size of the "telco API" market are likely to be unrealized, just as the earlier unified communications and collaboration market has arguably seen.
That might be true, in part, because telco APIs are intended to allow connectivity service providers a bigger role in the UCC markets, as well as supporting network slicing and monetization of some other network functions.
The unified communications and collaboration market always has been difficult to categorize, to the extent that it includes so many disparate segments. And the same will likely be true fot the telco application programming interface market as well.
UCC traditionally includes video conferencing hardware, subscriptions and service; voice messaging features; premises voice appliances and services and often the connectivity services used by cloud-based UCC apps and services. About the only thing the UCC category has not traditionally included are the value of business voice services sold by telcos.
The perception by traditional connectivity service providers that the various UCC services are niches can be seen in the market share figures for UCC providers of hardware and services. Microsoft's Skype and Cisco Webex are leaders in conferencing.
Most suppliers of UCC hardware have relatively small share, as do independent providers of UCC services. Also, note that video conferencing represents at least 44 percent of the total UCC market.
One reason the UCC category exists at all is because each of the constituent revenue components are relatively modest. Note also that some UCC functions (messaging, voice mail, conferencing) are provided by apps and services not generally tracked in the UCC bucket, often because they do not represent “for fee” apps (Facebook Messenger and other messaging apps such as WhatsApp, Apple Facetime, Google Meet and email apps, for example.
So now we hear about telco application programming interfaces (APIs) as a possible growth market. And the relationship between telco APIs and UCC is that the most-logical near-term revenue sources for telco APIs are apps and services that use UCC features (messaging, voice, videoconferencing).
To be sure, many hope for new additional API instances and markets for elements of the 5G mobile network experience; network slicing or other elements of the 5G experience that can be supplied by the 5G core and access networks.
And that is where the more-optimistic forecasts for telco API-related revenue seem to rely. That assumes developers will see value in licensing access to network features related to bandwidth consistency, latency or other network-derived features.
And some of us might suggest that those values and possible markets are going to develop more slowly than some seem to expect. Even allowing for some shifts of market share among current providers, and faster “core” UCC market growth than we have seen in recent decades, most of the forecast growth would necessarily have to come from new API markets related to private networks or network features, plus the spending on infrastructure to support the use of telco APIs.
At a high level, there always are alternate ways to solve an engineering problem, such as latency performance or computing cost. Basically, one can substitute bandwidth for processing (remote data center processing, for example) or processing for bandwidth (edge computing or on-the-device computing, for example).
And the point is that there are many ways to solve a latency, bandwidth or processing problem. Telco APIs are one way to solve such problems, but there are alternatives that do not require use of telco APIs.
And as a way of gaining market share in the traditional UCC market, telco APIs might be one way, but not the only way, to participate. Ericsson simply bought Vonage, for example, to gain capabilities of creating voice, messaging or communication solutions for any app.
Acquisitions might be one way to gain share faster than creating standards and products using telco APIs. And the issue of market potential (total addressable market) would still remain. The reason telcos generally did not want to be PBX suppliers was always that the market was sub-scale for them. Those same issues apply to new cloud-based UCC solutions that essentially replace business phone and conferencing systems as well.
The issue is that at least some forecasts of potential telco API markets seem excessively optimistic.
