Verizon Mobility-as-a-Service Shows Evolution of Channel

Verizon's cloud-based enterprise "Mobility-as-a-Service" now aims to offer mid-market and enterprise information technology managers a new way of adapting to the "consumerization of information technology" trend that has large numbers of people bringing their own devices and apps to work. 

Verizon's Mobility-as-a-Service also illustrates another change in the business information technology business, namely a shift of value within the channel partner space. In past decades, IT channel partners mostly made their money selling hardware and then fixing gear that broke. These days, that is a tougher proposition, and future success requires a shift to "value-added" activities. 


In March 2001, for example, Cisco changed its compensation to channel partners in ways that shifted from “volume” of sales to a “value” model. Under the new system, partners were rewarded for identifying opportunities for channel value-add; creating channel programs to enable channel value-ad and tying financial rewards to value-add channel activities.

That focus on "value add" arguably also applies in the traditional telecom channel partner space as well, one might argue. A shift in how technology is purchases also is a new factor. 

Some 90 percent of executives report their employees use their own devices and apps at work. That means there are new needs to protect sensitive data on both corporate-issued and employee-owned devices.

The new Verizon service will mean administrators can lock tablet, smart phone and PC devices, control them remotely, and wipe them of sensitive corporate data.

Additionally, Verizon's Mobility-as-a-Service, licensing on a per-user (rather than per-device basis), will include advanced Wi-Fi offload access so customers will be able to connect to more than 500,000 wireless hotspots around the world, provide corporate Wi-Fi directories across devices and use network data remotely.

Some might argue that services such as "Mobility-as-a-Service" allow Verizon and its channel partners to offer business customers a higher value service, something many believe the future channel will require. 

Cloud Computing Barriers in Europe are Not Just "Technical"

The fear of a US-owned cloud company turning over personal data of a European citizen to U.S. authorities, plus a less positive view of outsourcing in general, are retarding the growth of cloud computing in Europe, according to Christian Echeyne, director of IT infrastructure technologies and engineering for Orange Business Services. 

Of course, some might simply argue that U.S. cloud computing adoption also lags behind Asia-Pacific and Latin America adoption as well. 

AT&T Rural Access Lines Illustrate Problem

It isn't yet clear what AT&T will conclude about its rural network holdings, in particular the issue of whether to invest in faster broadband capabilities, or sell the assets. It's a hard question since there are few, if any, potential buyers at the moment. AT&T is slated to announce its decision about rural assets in November 2012, so we should know fairly soon.

Fitch Ratings notes that AT&T has suggested it is considering various technologies — both wireline and wireless — to increase available broadband speeds in rural markets. But AT&T also has said a sale or restructuring of those assets would be considered.

But buyers do not seem available. Firms such as CenturyLink, Windstream and Frontier Communications still are digesting large earlier acquisitions, and are not viewed as able to bid for such assets at the moment. 

AT&T could essentially "do nothing," and allow market share for high-speed access to gradually shift to cable competitors. That essentially would lead to a dwindling revenue base, and a diminished equity value for those assets, but some might argue sale or harvesting strategies are the most logical, given the minimal revenue upside from a major upgrade cycle in rural fixed networks, compared to investment in mobile networks. 

In essence, that illustrates a broader business problem. It increasingly is difficult to earn a reasonable financial return from rural fixed network assets, in part because of competition from cable TV operators, satellite providers, terrestrial wireless firms and other telcos. 

How Big an Impact Will RCS Have?

“Rich Communications Suite” is one mobile service provider answer to the question of how carriers can compete with “over the top” messaging.

Juniper Research forecasts that RCS will support 83 billion messages each year in five years’ time. That still will be less than one percent of total messaging traffic in 2017, though.

Text messsaging (short message service, or SMS), instant messaging, social messaging and email will represent the vast majority of messages.

Juniper Research points out that it took about 30 years for text messaging to reach its current ubiquity, so RCS should not be expected to displace the older alternatives too quickly.

Mobile messaging traffic will nearly double from 14.7 trillion each year in 2012 to 28.2 trillion by 2017, Juniper Research also predicts. 

For Retailers, Mobile Strategy is Not Easy

"What to do about mobile" is no easy question for most retailers to answer. There is widespread agreement that consumers of business and consumer products and services use their mobile devices to conduct research, and increasingly, to make purchases.

Some 86 percent of Apple iOS device owners research products and services on their mobile phone and 69 percent make purchases, compared with 76 percent  and 53 percent, respectively, for Android users, 57 percent and 35 percent  for BlackBerry users, and 47 percent and 32 percent for Windows users, respectively,  according to a Forrester Research survey of more than 53,400 North American respondents.

But Forrester Research analyst Julie A. Ask points out that the majority of firms have less than $500,000 to spend annually on mobile services, barely enough for a simple app and mobile-optimized website. "A few years from now, it will take millions, if not tens of millions, and years to catch up,  if they even can," says Ask.

76% of U.K. Enterprises Will Adopt Mobile Apps

About 76 percent of polled U.K. information technology managers plan to adopt mobile apps for business within the next year, according to  Integralis, which surveyed 300 U.K. IT decision makers in enterprises.

About 58 percent say they will adopt apps such as email, calendars and contact management tools in the next twelve months. 

Communication apps, such as Webex Skype and iCloud are likely to be adopted by 44 percent of respondents. Some 39 percent  of respondents planning to offer access to Internal apps for functions such as updating leave calendars. 

Collaboration tools such as Dropbox and Sharepoint will be deployed by about 35 percent of surveyed executives.

In the coming 12 months, 30 percent of respondents also expect to purchase core mobile business applications. 

The 25 to 44 age group is much keener than respondents 45 years and older to embrace use of mobile apps. 

Those trends are partly a reflection of growing use of smart phones, growing availability of cloud-hosted and delivered applications and also growing use of personal devices at work. Over time, those changes will affect the fortunes of current and new distributors of business apps and services.

When smart phones are the lead device, when apps can be accessed from any computing device with an Internet connection and when the purchase and installation of such software is about as simple as clicking on an icon, the business of distributing apps will change. 

U.S. LTE Service Costs More Than Elsewhere

A comparison by Wireless Intelligence, a unit of the GSM Association, suggests that being in the biggest LTE market has not brought low prices to U.S. consumers.

According to the study, Verizon Wireless charges $7.50 for each gigabyte of data downloaded over its LTE network. 

That is three times the European average of $2.50 and more than 10 times what consumers pay in Sweden, where a gigabyte costs as little as 63 cents.

People sometimes immediately think there is something nefarious going on when they hear such things. It isn't mysterious, though. Retail service costs everywhere around the world are directly related to the cost of supplying the underlying infrastructure, and the U.S. market has among the highest overall costs 

It really isn't much more complicated than that. 




Costs vary from region to region both in absolute terms and as a percentage of income per person. 

Smart Phone Adoption Tops 1 Billion Globally

Suppliers have been selling smart phones since at least 1992. Only recently have they gotten to be a majority of devices sold in some markets, though.  

Australia, U.K., Sweden, Norway, Saudi Arabia and UAE each have more than 50 percent of their population on smartphones. 

An additional seven countries—U.S., New Zealand, Denmark, Ireland, Netherlands, Spain and Switzerland—now have greater than 40 percent smartphone penetration. In the United States, Google research indicates. 



By way of comparison, Nielsen recently pointed out that U.S. smart phone penetration had surpassed the game console as the "most adopted" newer technology in the home environment. 

In terms of growth rates, nothing compared to the adoption of tablets, up about 400 percent over the last 12 months, Nielsen data suggests. 



Qualitatively, the smart phone adoption wave has key implications for any business that currently assumes people will use a PC when interacting with Internet content and information. increasingly, that is not a very good assumption.

As Facebook Expands in Mobile, Mobile Security is Added

Starting now, Facebook users will be able to download mobile security software from avast!, AVG, Avira, Kaspersky, Panda, Total Defense, and Webroot. 

Existing suppliers Microsoft, McAfee, Norton, TrendMicro, and Sophos will begin offering anti-virus software for mobile devices as well. Users can visit the AV Marketplace now to download free anti-virus software for PC, Mac and mobile handsets. 

In Praise of Deterministic "Flows"

Many of you are too young to remember the fierce debates about the principles that "should" guide the development of the "next generation network." That was before Internet Protocol stopped being an "interim" or "legacy" protocol and seemingly become the foundation for all next generation networks.

Telco architects had a different vision, based on the asynchronous transfer mode protocol, and popularly known at times as "broadband ISDN." Integrated services digital network was an earlier generation of thinking about the "next generation network." 

"Open Systems Interconnect" was supposed to replace IP. It didn't, obviously. But the backers of ATM knew something important, namely that some applications and services can tolerate delay and latency and packets arriving out of order. 

But some applications and services really do not work very well unless packets arrive in order, and that can be very challenging when so many packets have to arrive, so rapidly, that simple error correction methods, such as re-transmitting, do not work. 

That is true for video, and especially for high-definition video. Other services, such as real-time voice, likewise are intolerant of packets arriving out of order, because it is not elegant to retransmit the garbled bits and reinsert them into the stream fast enough to preserve quality.

In other words, the architects behind ATM knew something important about at least some forms of network-transmitted content, sessions and information, and that was that "best effort" often does not work for isochronous traffic. 

In other words, engineers now have to work around the "best effort" architecture of IP to replicate what would be built in to ATM, namely quality of service measures that handle different flows of information in a differential manner. 

Some will argue IP can be made to work that way. Others see problems ahead. 

 

Martin Geddes - Lean Networking from Martin Geddes

Mobile is the Way Most People Use Broadband, Voice, ITU Report Says

A new report by the  International Telecommunications Union confirms what you already know: mobile broadband has surpassed fixed broadband, on a global basis, as the way most people use the Internet.

And mobile is the way most people use voice services. 

From Mobile "Payments" to "Wallet" to "Commerce"

When nomenclature changes in a business, it usually indicates that supplier expectations of potential profit also have shifted. But sometimes, shifts of language also indicate that different segments of the supplier part of the market have decided to engage.

In 2010, for example, the language was about “mobile payments.” By 2011, the language had shifted to “mobile wallet.” In 2012, the language is “mobile commerce.” In part, that reflects a change in expectations about revenue potential.

In the U.S. market, for example, Isis has shifted its own revenue models from “transaction fees” to “advertising and marketing services.” And Google Wallet always has focused on advertising and marketing.

The mobile commerce language illustrates something else. A large number of observers, proponents and suppliers now say the issue is ways to use mobile devices and consumer behavior to change retailer business processes.

That includes a much broader array of potential suppliers, and a much wider range of business problems to be solved by the application of mobile technology. At least some of that change has been assisted, if not driven, by the widespread interest in tablet devices.

Retailers and suppliers of retailer technology have seized upon the tablet as an ideal device for changing the interaction with shoppers inside stores.

That isn’t to say that innovation about actual payment processing has ceased. PayPal has made major efforts to gain a foothold in processing of retail store transactions, a move that would fuel its business move from online to offline.

Other suppliers of online or offline services likewise see opportunities to sell solutions that bridge offline and online sales. The Merchant Customer Exchange, for example, is an effort by retailers to better control the mobile commerce process in ways that are more friendly to place-based retailers.

Managed Services Not Meeting ROI Expectations in Australia, Study Finds

Some managed service providers are not fully meeting the total cost of ownership and return on investment expectations of their customers, according to an IDC Australia study.

The study found that 23 percent of 100 Australian IT managers and decision makers surveyed have incurred an increase in costs under a managed services provider, not a decline, as one normally would expect. 

“That’s one of the highest figures in the entire region of Asia-Pacific — it’s higher than New Zealand, and the only place higher is Malaysia. Everywhere else, like Singapore for example, it's at five percent,” said IDC Australia associate research director Dustin Kehoe.

About  44 percent of the C-level respondents say costs have increased or costs have stayed the same. About 56 percent actually saw cost savings, the study found. 

375 Million Use Consumer Cloud, 500 Million be End of 2012

Some 375 million consumer were using some form of cloud service earlier in 2012, while perhaps 500 million will be jumping to an estimated 625 million in 2013 and then doubling over the course of four years to reach 1.3 billion by 2017,  according to IHS iSuppli. 

So many use cloud services because many cloud services are provided at no incremental charge to end users, or cost very little. 

Mobile and Cloud Will Change the Channel

Will the coming era of cloud-based apps and mobile access change the channel business? It seems impossible to believe otherwise.

As companies embrace anytime, anywhere communications--driven by the ubiquity of mobile devices--has the time finally come (yet again) to toss aside IP hardphones or even softphones? It’s a question at least some are asking.

“Once IP communications take over (if not already), the artifacts of telephony, including digit dialing and wired access will become obsolescent and will be replaced by a range of mobile IP-based communications tools,” says consultant Russell Bennett.

Consider the implications. If the mobile device becomes the object that uses broadband access, what happens to markets for fixed access? If the mobile displaces the desk phone, what happens to demand for hosted PBX services, SIP trunking or even fixed broadband?

To the extent that the typical channel partner, and the typical fixed network services provider, makes money selling fixed network voice and data, a shift to mobile will shift demand to mobile services, and away from fixed network services.

The shift to cloud computing, which is related to growing use of mobile devices and connections, doesn’t necessarily help channel partners or fixed network service providers, either. Consider the use of basic business productivity suites.

Once upon a time, business and consumer buyers purchased such products as “shrink wrapped” physical products, at retail outlets. These days, such purchases are not made, or are made online. In other words, distribution shifted from retail partners to online partners.

At the same time, average selling prices have dropped. In some cases, retail price now effectively is “zero,” when users use Google Docs, for example.

But, you might argue, there also are subscription-based business versions. Yes, that is true.
According to Cloud Sherpas, money can be made iin the cloud-based document suites business, despite the fact that no enterprise or smaller business pays very much for such apps. Business access to Google Apps costs $5 a month, or $50 a year.

But ask yourself whether a typical channel partner can make a living selling products priced at $50 a year.

In the channel partner business, the analogy is mobile-only business broadband and voice. You might argue that the channel partner only has to shift its products from fixed network to mobile product lines. But it isn’t that simple.

In some cases, business buyers will be able to “buy direct,” without a channel partner. In other cases, the retail prices might be low enough that there is little gross revenue or profit margin for any channel partner.

Sam Kumar, CEO of  Denver competitive local exchange carrier Microtech-Tel, argues that CLECs no longer can compete with cable TV operators in the SMB business broadband access business. If the carrier cannot compete, then the carrier’s channel partners will have difficulty as well.

The obvious implication is that channel partners will have to shift product lines to cable high-speed Internet access, and away from incumbent telco or CLEC products.

A major disruption of the hosted PBX or premises phone system business is a bit further off. But if a business buyer can obtain enough of the same call management features from a mobile service, that a buyer would formerly have gotten from a hosted PBX solution, buying ultimately will shift. If the device to be supported is a mobile or a tablet, and if reasonable functionality can be provided, then purchasing should shift to “mobile direct” modes.

What should agencies do? Mobile product lines are a strategic necessity. Cable broadband is a tactical necessity.

In both the telecom and value added reseller businesses, it is harder to sustain revenue earned from traditional products, leading participants to search for better revenue models. Value added resellers generally are looking for recurring revenue streams, while telecom agents generally are looking for products other than recurring communications services.

Whether or not most agencies can diversify into pre-sale or post-sale products distinct from the residuals earned from selling carrier services is the big question.

The answers are not easy, but in all likelihood will revolve around the value telecom agents can add, either pre-sale or post-sale, for services other than the actual communications services. If you think about the traditional distinction between a “consultant” and an “agent,” you’ll get the idea.

The consultant does not represent service providers, does not earn any revenue from any communications services, but is paid for advice. In principle, that is what a commissioned telecom agent would have to learn to do, as well.

Peter Radzieski, owner of RAD-INFO, a consultancy, charges clients if what they want is information about who sells dark fiber, for example. He charges for the advice, whether or not a deal results (RAD-INFO works with about 65 service providers, so there sometimes is commission revenue involved).

He suggests that one way agencies could create post-sales revenue is by getting into the telecom expense managment business, for example, or managing mobile devices, or providing security services.

Another avenue is to “become the outsourced telecom department” for customers,” he says. In other cases an agency might be paid for integration activities. When a wide area network has to be created, it might be necessary to stitch together elements from a variety of suppliers. In those cases, an agency might be paid for integration tasks.

The point is that everything hinges on the “added value” beyond selling a circuit. As always is the case, management, integration, configuration, troubleshooting, monitoring, security and provisioning are some of the time-consuming tasks that a customer might essentially outsource to an agency capable of handling those chores.

But that’s the rub: an agency has to be able to provide those valuable services, credibly. The possible issue is that such services are time consuming. In principle, some agents might take a different tack and simply add on an incremental fee for some of the post-sale chores that inevitably arise around billing issues, for example.

The obvious downside is that a customer might then decide whether to buy direct from a carrier. Another possible avenue could be “white labeling” of carrier services, where the agency gets a wholesale price and then can sell at any retail price.

It won’t be easy to create pre-sale or post-sale revenue streams. But neither, given the difficult revenue model for selling pure communications services, does it seem likely agencies will be able to prosper, longer term, without those new revenue sources.
Will the coming era of cloud-based apps and mobile access change the channel business? It seems impossible to believe otherwise.

As companies embrace anytime, anywhere communications--driven by the ubiquity of mobile devices--has the time finally come (yet again) to toss aside IP hardphones or even softphones? It’s a question at least some are asking.

“Once IP communications take over (if not already), the artifacts of telephony, including digit dialing and wired access will become obsolescent and will be replaced by a range of mobile IP-based communications tools,” says consultant Russell Bennett.

Consider the implications. If the mobile device becomes the object that uses broadband access, what happens to markets for fixed access? If the mobile displaces the desk phone, what happens to demand for hosted PBX services, SIP trunking or even fixed broadband?

To the extent that the typical channel partner, and the typical fixed network services provider, makes money selling fixed network voice and data, a shift to mobile will shift demand to mobile services, and away from fixed network services.

The shift to cloud computing, which is related to growing use of mobile devices and connections, doesn’t necessarily help channel partners or fixed network service providers, either. Consider the use of basic business productivity suites.

Once upon a time, business and consumer buyers purchased such products as “shrink wrapped” physical products, at retail outlets. These days, such purchases are not made, or are made online. In other words, distribution shifted from retail partners to online partners.

At the same time, average selling prices have dropped. In some cases, retail price now effectively is “zero,” when users use Google Docs, for example.

But, you might argue, there also are subscription-based business versions. Yes, that is true.
According to Cloud Sherpas, money can be made iin the cloud-based document suites business, despite the fact that no enterprise or smaller business pays very much for such apps. Business access to Google Apps costs $5 a month, or $50 a year.

But ask yourself whether a typical channel partner can make a living selling products priced at $50 a year.

In the channel partner business, the analogy is mobile-only business broadband and voice. You might argue that the channel partner only has to shift its products from fixed network to mobile product lines. But it isn’t that simple.

In some cases, business buyers will be able to “buy direct,” without a channel partner. In other cases, the retail prices might be low enough that there is little gross revenue or profit margin for any channel partner.

Sam Kumar, CEO of  Denver competitive local exchange carrier Microtech-Tel, argues that CLECs no longer can compete with cable TV operators in the SMB business broadband access business. If the carrier cannot compete, then the carrier’s channel partners will have difficulty as well.

The obvious implication is that channel partners will have to shift product lines to cable high-speed Internet access, and away from incumbent telco or CLEC products.

A major disruption of the hosted PBX or premises phone system business is a bit further off. But if a business buyer can obtain enough of the same call management features from a mobile service, that a buyer would formerly have gotten from a hosted PBX solution, buying ultimately will shift. If the device to be supported is a mobile or a tablet, and if reasonable functionality can be provided, then purchasing should shift to “mobile direct” modes.

What should agencies do? Mobile product lines are a strategic necessity. Cable broadband is a tactical necessity.

Mobile, in a real sense, is inseparable from cloud computing. The reason is simply that mobile devices increasingly provide value as "computers." And the thing about cloud computing is that it means new applications can be launched immediately, upgraded immediately or changed immediately, without little overhead.







In both the telecom and value added reseller businesses, it is harder to sustain revenue earned from traditional products, leading participants to search for better revenue models. Value added resellers generally are looking for recurring revenue streams, while telecom agents generally are looking for products other than recurring communications services.

Whether or not most agencies can diversify into pre-sale or post-sale products distinct from the residuals earned from selling carrier services is the big question.

The answers are not easy, but in all likelihood will revolve around the value telecom agents can add, either pre-sale or post-sale, for services other than the actual communications services. If you think about the traditional distinction between a “consultant” and an “agent,” you’ll get the idea.

The consultant does not represent service providers, does not earn any revenue from any communications services, but is paid for advice. In principle, that is what a commissioned telecom agent would have to learn to do, as well.

Peter Radzieski, owner of RAD-INFO, a consultancy, charges clients if what they want is information about who sells dark fiber, for example. He charges for the advice, whether or not a deal results (RAD-INFO works with about 65 service providers, so there sometimes is commission revenue involved).

He suggests that one way agencies could create post-sales revenue is by getting into the telecom expense managment business, for example, or managing mobile devices, or providing security services.

Another avenue is to “become the outsourced telecom department” for customers,” he says. In other cases an agency might be paid for integration activities. When a wide area network has to be created, it might be necessary to stitch together elements from a variety of suppliers. In those cases, an agency might be paid for integration tasks.

The point is that everything hinges on the “added value” beyond selling a circuit. As always is the case, management, integration, configuration, troubleshooting, monitoring, security and provisioning are some of the time-consuming tasks that a customer might essentially outsource to an agency capable of handling those chores.

But that’s the rub: an agency has to be able to provide those valuable services, credibly. The possible issue is that such services are time consuming. In principle, some agents might take a different tack and simply add on an incremental fee for some of the post-sale chores that inevitably arise around billing issues, for example.

The obvious downside is that a customer might then decide whether to buy direct from a carrier. Another possible avenue could be “white labeling” of carrier services, where the agency gets a wholesale price and then can sell at any retail price.

It won’t be easy to create pre-sale or post-sale revenue streams. But neither, given the difficult revenue model for selling pure communications services, does it seem likely agencies will be able to prosper, longer term, without those new revenue sources.