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April 08, 2009

Innovation - It's Out There if You Look

By Jon Arnold, Principal, J Arnold & Associates

My last column touched on some important implications facing service providers that came out of the eComm 2009 conference that I attended in early March. There were many other themes worthy of further discussion, and I just have room to address one here — innovation. We all know how important this is, and it sure goes a long way to helping service providers the challenges covered in my last column.

Innovation was definitely a core theme at eComm, and there were both solutions and inspiration for virtually any service provider — big or small, new or old, conventional or disruptor. I’ve long advocated that as good as IP technology is, it’s a double-edge sword; it provides an entrée for newcomers, and it helps incumbent make their networks more cost effective and flexible. However, it ultimately levels the playing field with standards-based technologies that anyone can deploy.
While it’s true that service providers can do things with IP to create network-based differentiation in areas like QoS and QoE, only the most ardent telco loyalists will say that is sufficient for competitive advantage. Whether the network is really good or really, really good, service providers have more leverage to be competitive around service innovation. Incremental improvements in the network will always be needed, but in today’s market, the end user is no longer a passive subscriber. Aside from the fact that there are so many alternative service providers to choose from, there is simply a much richer palette of communications possibilities to work with.
There was a broad range of innovation at eComm— far too much to explore here. Some just lives in the lab, but much of it is being deployed today. While there were probably more examples catering to consumers and the iPhone or Android (News - Alert) crowd, it’s all relevant to service providers. Many service providers have both consumer and business subscribers, and in my view need to think less about this distinction and more about meeting our everyday needs. The line between work and home life will only get blurrier, and increasingly, the value of communications will be based on how well it helps us manage this balance.
Aside from getting first hand exposure to new applications/services, another important aspect of innovation is thinking differently about communications. The eComm audience is well beyond the Telco 1.0 world where telephony is both the means and the end. The Telco 2.0 world and beyond sees voice much more as a means — not an end. Telephony as we know it is a dead-end business that is no longer the reason we do business with a service provider. This is not comforting for legacy operators to hear, and innovation is very much about using voice to enable — and create new services that will drive their growth.
So, what are these new services? Well, some are just that — services or applications that use voice in new ways. Others, however, are services platforms from which operators can create an ongoing stream of innovation — the platform play I’ve been writing about so often in this column. Some good examples these types of innovation include Fonolo’s deep dialing application, Ditech’s new voice poke app Tok Tok, Mobivox’s CRM over Voice solution, Voxeo’s (News - Alert) launch of their Tropo voice services platform, Ifyphone’s iPhone developer program, and Rebelvox’s two-way time shifting solution.
Speaking of voice — no pun intended — whether service providers like it or not, Skype (News - Alert) remains an important innovator and market disruptor. Although Skype is primarily used by consumers, service providers focused on the business market need to pay close heed. There were two items of note at eComm on this front. First, Skype announced the release of their royalty-free wideband voice codec, SILK. Wideband audio — or HD audio — is becoming an important feature touted for the conferencing market, and is very much meant to enhance business communications. SILK makes Skype a more credible option for the business market, especially SMBs, which is crowded enough already, but with no clear leaders.
Second is the recent integration of Skype with Asterisk, which Mark Spencer outlined at eComm. Open Source continues to build momentum in the business market, and Skype simply makes it a stronger story. Of course, Skype has more recently made even bigger news with its iPhone support, so regardless of which market service providers are addressing, Skype is an important — and rather unique — competitor.
On the innovative thinking front, my key message is that success is based not just on technology alone. The thinking behind it has to be there, as does the right mix of people to covert those ideas into services we can use. Thomas Howe (News - Alert), who announced his joining Jaduka as their CEO at eComm, articulated this very well by explaining the differences between voice developers and applications developers. He explained that innovation is built around adding voice to existing applications, not the other way around. This means that developers of voice applications — voice mashups — need to understand how applications developers will use these and integrate them into applications that drive business processes. These are distinct sets of expertise, and if these groups of developers cannot work together, the resulting innovation will be disruptive, but not as intended.
Looking further ahead, there were some very thought-provoking glimpses about what is possible, and I urge you to explore these further. Jeevan Kalanithi of MIT’s (News - Alert) Media Lab talked about the interface design issues that arise as computers become smaller — shrinking from “candy bar size to cookie size”. Mark Rolston of Frog Design demonstrated how well touch-based interfaces are bridging the physical and virtual world. The ability to mix 3D space in real time creates opportunities for rich communications that will no doubt find their way into the business world. Microsoft’s Xuedong Huang provided some clues about what form these things could take when talking about the Natural User Interface. The notion of being able to project an interactive broadband-based interface to virtually any surface seems very space age and at minimum, extends to concept of mobility.
Innovation truly comes in many forms, and these are just a few examples of what is possible. Each of these ideas warrants further consideration, and my objective here is not just to expose you to examples of innovation that are happening today, but also to broaden your scope of thinking about innovation itself. It’s a given that service providers need to innovate around technology. However, they must also be innovative in how they think about communications itself and about the business they really are in. This is easier said than done, especially for service providers who are not accustomed to being in such a competitive world. However, as evidenced at eComm, this kind of thinking is being done, and it’s not too late for service providers of all stripes to embrace these ideas, even if just one at a time.

Jon Arnold, Principal at J Arnold & Associates, writes the Service Provider Views column for TMCnet. To read more of Jon’s articles, please visit his columnist page.

Edited by Greg Galitzine

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