May 242016
 
Cell phones in use

“We’re in the flip phone era of 5G networks, people don’t realise today’s 4G mobile standards were written for the era of the flip phone,” says John Smee, the Senior Director of Engineering at Qualcomm Research

John was speaking to me at chipset manufacturer Qualcomm’s San Diego head office to discuss the next generation of mobile phone services.

Putting together communications standards isn’t a simple thing, as John says “what we’re discussing now is what today’s five year olds will be using when they turn fifteen.”

John sees the new standard as giving the next generation of internet giants their market opening, pointing out companies such as Facebook and Uber benefitted from the rollout of 4G networks and some of today’s startups will get a similar boost from 5G services. “A few clicks and you’ve ordered a ride. That wouldn’t have been possible without 3G connectivity, high powered smartphones and networks that are scalable.”

“What are going to be some interesting new startups that become huge multibillion dollar industries from 2030,” he asks. “By definition we don’t understand the future.”

For telco executives being a ‘dumb pipe’ is one of their nightmares and John believes they can avoid that fate in a 5G world by concentrating on their advantages with licensed spectrum. “If they are looking a high reliability and low latency services then the quality of the connectivity they can offer becomes essential,” he says.

While the standards groups continue to work on the 5G standards, the technologies continue to evolve. John Smee’s message is that these new products are going to offer opportunities for new companies.

The trick is to figure out which of today’s startup companies will be the Uber or Facebook of 2025.

Feb 272016
 
mobile payments through smartphones and other devices are changing business

One of the greatest profitable accidents of the last twenty years was SMS messaging that delivered telecoms companies huge revenues for a service that cost them almost nothing.

In Somalia, we may be seeing phone companies leading the way in cashless transactions as the economy moves towards mobile payments on the back of service intended by one of the nation’s leading cellphone providers for a completely different purpose.

The Hormuud Telecommunication Company set up EVCPlus to deal with account payments but in an unstable and risky economy the service has proved an efficient way to deal with daily transactions

“It’s not safe to carry cash money here,” said Dhublawe Ibrahim Aden, 25, a hawker who sells shoes and clothes. “If someone has to buy my shoes and bungles [necklaces] then he has to pay me through my cellphone. I don’t accept cash money from clients.”

Like Kenya’s M-PESA, EVCPlus is showing how slower and more basic connections aren’t a barrier to African economies leading the world in some online services. Sometimes having access to basic services isn’t an impediment.

Feb 162016
 
Cell phones in use

One of the Twentieth Century’s great rivers of gold was the telecommunications industry. As the world became connected, first by telegraph, then telephone and finally mobile networks, owning a telco licence became a path to riches.

Late in the century, the mobile phone was a spectacularly profitable device for telcos in the 1990s as consumers flocked to buy them and pay dearly for services, particularly SMS which was practically free to provide.

Just as the century was coming to a close things changed dramatically as the Internet became accessible to the general public and while data was still profitable, telco revenues started to fall dramatically. Then, early in the new century, the arrival of the smartphone disrupted the entire industry.

Becoming a dumb pipe

Twenty years later and the arrival of smartphones using data services has changed the economics of cellular networks, leaving the incumbents worried they are going to merely become ‘dumb pipes’ offering just a low margin utility.

Around the world incumbent telcos and mobile network operators have responded by moving up the value chain into managed services and cloud computing and one particularly interesting company in this respect is India’s Reliance Telecom.

Reliance has responded to the changes in its market, something made more problematic by India’s arcane and complex cellular licensing system, by strategically selling off various parts of its infrastructure and focusing on where it sees opportunity.

At a lunch in Sydney yesterday CEO Bill Barney of Reliance’s global network division was showcasing their cloud services for Australian customers and showed how the quest for profits is moving telcos into areas like data centres and managed services.

Emerging markets corridor

Barney argues that Reliance’s network, which spans South Asia, the Middle East and into Eastern Europe, gives the company a strong position in the “emerging markets corridor”. He also boasts the product the company offers allows easier development of smart services.

In this respect, the Reliance Global Cloud Exchange differs from similar plays like Telstra’s PacNet network across East Asia – which Barney previously headed – in that it offers services higher ‘up the stack’ making it easier for companies to deploy smart applications, something Barney sees as being particularly attractive to the media and financial industries.

While Reliance’s claims are yet to be tested in the market, the company’s shift to higher level services illustrates a struggle facing all telecommunications operators. To do this, Reliance and Telstra look to global networks and data services, Singapore’s Singtel tries its hand at media content in a similar way to Britain’s BT and Vodafone makes a strong Internet of Things play.

For each of these companies, diversifying into other fields makes sense however each strategy brings its own risks – in Reliance and Telstra’s cases this means competing with cloud services vendors like Amazon and Microsoft – that telcos haven’t been exposed to in their core markets.

Those core markets though are being disrupted and will never be as profitable as they were twenty years ago. For the world’s telecommunications companies it’s a matter of diversify or shrink.

Dec 202015
 
apple-iPhone5s-5Up_Features_iOS8_PRINT

Something strange is happening at Apple, the once secretive company is now becoming far more open in its plans and relations with the media.

The latest example is the company inviting Sixty Minutes and Charlie Rose into its inner circles to interview CEO Tim Cook and go on tour of a future concept store with retail chief Angela Ahrendts.

Apple’s media friendliness marks a big change for the company that’s reflected in its markets as engaging with other partners becomes critical for future success. Successfully achieving this will mean another fundamental shift in the organisation’s management.

 

Oct 042015
 
using an iPad and the cloud for a point of sale cash register

“You wouldn’t say, let me go buy an enterprise car,” Apple Chief Executive Officer Tim Cook told Box CEO Aaron Levie at the BoxWorks conference in San Francisco this week . “You don’t get an enterprise pen to write with.”

Cook was talking about Apple’s position in the enterprise computing world, something conventional IT industry wisdom says isn’t the company’s strong point.

While this was true in the days of desktop computers and network servers, the arrival of the iPhone and iPad changed that. Suddenly Apple were driving business computing as staff from the Chairman of the Board down to the office junior started bringing in iOS devices.

Up until the iPad, the Bring Your Own Device discussion was a debate, once the tablet appeared any argument was over as all levels of businesses started bring their devices into the office.

One of the key arguments for using an iPad were the applications available and one of the most important applications in the early days was Evernote.

Sadly for Evernote, those early successes haven’t continued and now the company is being flagged as potentially the first billion dollar ‘tech unicorn’ to fail.

If Evernote does fail, it will show that even having a compelling product at the right time isn’t a guarantee for success.

Apple however is basking in its success and, as Cook points out, the shift to mobile is now defining business and his company is probably the best positioned to exploit that.

Sep 012015
 
andriod_apps

“It isn’t easy to create apps for the real world,” is the opening line of this morning’s VM World conference in San Francisco.

That line encapsulates the challenge facing almost every company, not just tech companies like VMWare, in the face of shifting marketplaces and technologies.

One of the biggest business shifts is the move to mobile technologies. This isn’t just changing marketing and user experiences but also changing companies’ operations as staff increasingly use their own smartphones and tablets to work.

Managing a shifting market

That shift though is not simple, as ZD Net reports Facebook’s move to ‘mobile first’ was a tough path in the words of the company’s senior engineer Adam Wolff.

“I think everyone would say it was worth it, but it was extremely painful,” Wolff admitted, explaining each sub-team was building in their own ways because there was no one to crossover with necessary knowledge.

Facebook has probably been the most successful company is dealing with the mobile shift and their difficulties despite their massive resources show just how difficult it is for companies to change not just their technology, but their business processes and in many cases the entire mindset of the organisation.

Those pain points in transitioning between ways of doing business is where opportunities lie, for VMWare they are seeing IT departments struggling with the development and deployment of apps along with the security risks of staff bringing their own mobile devices.

Happy coincidences

For VMWare, this is a happy coincidence in that their main business of computer virtualisation is as much at risk from the shift to cloud computing and mobile applications as any other business. By offering the tools for companies to manage that shift, they can retain their place in the market.

The threat though is this space has many other contenders – not least Facebook itself with its open source React platform the company developed out of its experiences in developing its mobile product.

One of the strengths VMWare has is being an incumbent, which is why they are pushing their ‘hybrid cloud’ offerings where companies use both their own data centres along with the public cloud providers such as Amazon and Microsoft.

Stuck with sunk costs

For large corporates with huge sunk costs in their own infrastructure and those with security or operational reasons for keeping some of their functions in house that hybrid strategy makes sense as it’s unlikely any board or CIO is going to happily burn their existing systems and process down and go to a ‘pure cloud’ or mobile strategy.

While catering to that market is lucrative for the moment, the longer term risk is that the next wave of large corporations – and today’s high growth businesses – are pure cloud companies.

For the companies catering to the old ways of doing business, for the short term there’s profits to be made in the pain points from an evolving marketplace but in the long term it’s how well businesses are placed for the world the end of that transition that will guarantee their survival.

The process facing software companies like VMWin dealing with as business shifts is a challenge faced by almost all industries, the question is how to adapt to a very changed way of working.

Jul 092015
 
Nokia Lumia 920 has an impressive camera

Yesterday we looked at how Sony claim to be sticking with mobile phones, today Microsoft CEO Satya Nadella has announced major cutbacks for the Windows Phone division with Mary Jo Foley reporting in ZDNet that the company’s Finnish operation – containing the bulk of the Nokia operations the company acquired two years ago – is to lose half its staff.

Microsoft’s strategy around Windows Phone has always been problematic but should the company be winding down the product then it leaves a hole in the strategy of running Windows on all devices.

The bigger picture however may be that Nadella recognises the mobile phone hardware market offers little in profits and growth compared to the company’s cloud services and the potential for IoT products although the CEO claims devices are still part of the future.

In the near term, we will run a more effective phone portfolio, with better products and speed to market given the recently formed Windows and Devices Group. We plan to narrow our focus to three customer segments where we can make unique contributions and where we can differentiate through the combination of our hardware and software. We’ll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices they’ll love.

The culling of Microsoft’s product lines may well focus the company ahead of Windows 10’s launch however it also risks leaving critical gaps in the market.