Thursday, August 31, 2006
Many have been trialling IMS-based services - Video Telephony, dual-mode VOIP, PoC, etc. Most say that they've run customer focus groups and done surveys which have shown that people are interested, in theory, in new service types. However, when they build and trial the services they find two things:
1.) There are significant technical challenges. (The main bottleneck seems to be around the device and access method - power consumption and overheating handsets.)
2.) The service is way too complex for the poor user. Customers are just not ready for these whizzy services in practice and the marketing departments are not closely aligned enough to the market realities.
We know that man can eventually solve most technical problems, but the more intransigent and (commercially) important is what's called customer 'usability'.
However, an article in last month's Harvard Business Review (called 'Eager Sellers and Stoney Buyers: Understanding the psychology of New Product Adoption') reminds us what 'usability' really means. It is primarily an emotional and psychological issue, and we (in the telco world, as rational engineering types) ignore what it really means in practice. Not only that, as engineering types we magnify the problem of user take up by not appreciating some fundamental truths, revealed by new research.
For IMS-based services addressing this is even more important, as the forces of 'Telco 2.0' mean that our customers have even greater choices and alternatives to our vertically-integrated service offerings. Fixed business models are going under water, SMS has 2-3 years life left in it, mobile voice 5-6 maximum. In the meantime, huge price pressures on mobile voice through changes in regulation and competition.
So, my contention is that if our great hope is to replenish the coffers with IMS-based multimedia combinational services, then we need to get REALLY FOCUSED on our product development and customer adoption plans.
So, the HBR article says this in summary:
- Studies show that new product innovations fail at a staggering rate (telco no exception).
- The products that consumers dismiss often do offer improvements over existing ones (that's why the focus groups always say they like the ideas!)
- But they are not adopted because NEW PRODUCTS FORCE CONSUMERS TO CHANGE THEIR BEHAVIOUR, and that has a PSYCHOLOGICAL COST.
- Consumers IRRATIONALLY OVER-VALUE the benefits of the prodcuts/services they own over those they don't.
- Executives, meanwhile, OVER-VALUE their own innovations, leading to a big problem.
- Studies show that, on average, there is a MIS-MATCH of NINE-to-ONE, (9x) between what innovators thinks consumers want what consumers truly desire.
Companies can overcome this disconnect by considering where their products/services fit within a matrix (Easy Sell, Sure Failures, Long Hauls, Smash Hits). Plain old mobile voice, by the way, would be categorised as a 'Long Haul' back in the early 1990s. (Ask France Telecom where Skype would be today).
Each category has a different ratio of 'product improvement-to-change' required from the consumer.
Once companies know where their product/services (really) fit into this grid, they have a better chance to manage resistance to change.
We will be looking at how to apply these principles to IMS-based services at our brainstorm on 4-5 Oct. Using these and other approaches we look to create a new IMS services framework for the industry...
The Editor, IMS Insider
Friday, August 25, 2006
Next week we publish (for our subscribers) a special Summer edition of the IMS Insider Report.
This edition is designed as a ‘Reality Check’: Can IMS (really) help operators make money in a Telco 2.0 world? I think we’re clear about the cost reduction and technical efficiency benefits. But many (most? all?) practitioners still believe there’s a pot of new gold out there from new revenue streams that IMS services will bring.
Our ‘Hypothesis’ (on the state of IMS today and what needs to happen to move it forward) has been very well received by the stimulus speakers at the October Brainstorm. These are the leading 'insiders', specialists, practitioners, who are struggling with getting their organisations to align on a single, sensible vision for IMS that creates value for their companies, rather than leading them down blind allys.
In the 'Soap Box' section of the Summer Edition our Chief Analyst (Chief Cynic?), Martin Geddes, firstly analyses the IMS propositions of the major NEP vendors. He then looks in-depth at the service creation (and revenue growth) claims of IMS made by in-house architects. Finally he describes an alternative 'QoS' method called 'Paris Metro Pricing'. Martin will be kicking off the IMS Services brainstorm on 4-5 Oct when he'll go through these points and others in detail.
As IMS case studies, The Summer Edition looks at the activities of two interesting companies – Arcor (no. 2 fixed line player in Germany) who Vodafone are cosying up to fast now, and KPN in Holland (we like their philosophical approach to IMS).
In the Main Section, Chris Barraclough, previously an equity analyst at JP Morgan, consultant with Gemini, Marketing Director at Orange and Worldcom, and co-author of the Telco 2.0 Report , describes a new approach to thinking about NGN/IMS investment in the context of Telco 2.0 commercial strategy.
Finally, we’ve trawled the web for the best IMS articles and the most important news. All this and more for subscribers. Go to www.ims-insider.com for cost details.
The Editor, IMS Insider
Thursday, August 17, 2006
We're delighted to welcome more sponsors and endorsers. Why are they interested: "This is very different to the normal 'Death by Powerpoint' events"; "You've hit the nail on the head here"; "Looking forward to experiencing the Mindshare brainstorming process"...
- Latest Sponsor list: Intel, LogicaCMG, Detecon, Siemens, Lucent, Motorola, Redknee
- Latest Endorser list: Broadband Services Forum, Wifi Alliance, Sip Center, Fixed Mobile Convergence Alliance, Wireless Broadband Alliance, Communications Research Network, Mobile Marketing Association.
PS: As a complete aside, we have Google ads on this site. Google attaches them automatically based on the contents of the site. Today, their clever algorithm identified that our readers (or maybe the telco industry in general) is suffering a 'Mid-Life Crisis' and linked this ad to our site: http://www.fortysixty.org/ . I hope it helps!!
The Editor, IMS Insider; firstname.lastname@example.org
Monday, August 14, 2006
"The eventual value of IMS will be tightly linked to the number, variety and stickiness of services it will support, as well as its ability to accommodate various business models.”
In this month's IMS Insider Report (available to subscribers here), and as preparation for the IMS Services industry Brainstorm on 4-5 Oct, we interrogate the effectiveness of IMS to support service creation and delivery.
We start by asking the questions that today are normally ignored: What user problem is IMS solving? Is there one? And is it the only way of solving it? Is an elegant technical architecture necessary or sufficient to create a successful business model?
Here's a summary of our analysis:
- COST REDUCTION: IMS is a good solution to POTS replacement and cost reduction for other existing and about-to-be-deployed services (eg. PoC, IM, videosharing, IP PBX, etc). "Good enough" is good enough!
- SERVICE DELIVERY: Asking how good IMS is as a at supporting service delivery is asking the wrong question: telcos aren't strong enough in this space to compete against Internet players in the long term.
- PREMIUM PRICING: There's no premium pricing from services that can be deployed equally well on P2P architectures. Telcos don't have enough of a lock on the customer to prevent alternative distribution systems evolving.
- ARCHITECTURE: Tightly coupling so much of the value of profile, AAA, and network awareness into session control is an architectural mistake.
- DEVELOPERS: IMS needs to find ways of releasing that value without assuming the world's developer community will bend to the telco will.
- SIP: There's nothing wrong with SIP, but it's not very important to the business problem at hand. Other tools like web services and transactional messaging may be more appropriate to some of the technical problems.
- ECOSYSTEM: Architectural elegance is nice, but Windows still won out against Unix and the Mac. Ability to evolve rapidly, and a strong total ecosystem are what count. Service and user identity/naming on the Internet may be a mess, but tidying it up isn't necessarily a viable business proposition.
- TRUE IMS OPPORTUNITY: There's an interesting opportunity to use IMS as a "SIP wrapper" around other protocols, and this deserves more study and promotion. It aligns with the (true) telco assets and differentiators (see www.telco2.net/manifesto) , doesn't break the "end to end" model of application delivery, and neatly finesses away lots of technical issues with extending these protocols.
- SUMMARY: the internetworking of the Internet is likely to be an order of magnitude less costly than the expensive roaming and interoperability testing needed for IMS (note: we'll be hearing more about the trials and tests run by the GSMA and MultiServiceForum at the Industry Brainstorm on 4-5 Oct).
IMS doesn’t maximise the advantages of the operator because it forces all the best data assets to go via a tolled distribution system that everyone will be busy trying to avoid. The architecture fails to separate out functions as cleanly as in the parallel world of the Web and HTTP.
If IMS sticks to AAA functions as a 'wrapper' to other applications, it may have a high growth future. Otherwise, the tight coupling of profile, proxy and policy will fail in the face of better APIs and developer channels from the IT world. IMS as a true service architecture is all cost, and no revenue.
(To subscribe to IMS Insider monthly report, please go to www.ims-insider.com)
The Editor, IMS Insider
Thursday, August 10, 2006
The Editor, IMS Insider
Wednesday, August 02, 2006
All brainstorms need a good 'hypothesis' to work against. Below is our's re IMS, using the headlines 'Situation, Complication, Question, Answer, What Next' (see also complementary Telco 2.0 hypotheses). It describes the context for the event:
1.) SITUATION – Lack of clarity of how to thrive in an IP-based world
- Decline in traditional sources of revenue due to market saturation, new technology, regulatory changes, and new (non-traditional) competitors.
- Telcos are looking to dramatically reduce costs: to become leaner and more efficient, and at the same time find new sources of growth.
- IMS, as part of NGN development, aims to enable telcos to compete in an IP-based world – reduce costs, increase operational efficiency and time to market and stimulate the growth of new revenue streams.
- IMS Insider/STL research shows that Telcos are not clear about what applications and services IMS should support and how precisely they will make money out of them.
2.) COMPLICATION – NGN/IMS development is still technology-led not business-led
- This lack of clarity is symptomatic of the more fundamental commercial uncertainty about how telcos will make money in an IP-based world. (See www.telco2.net/manifesto and www.telco2.net/report)
- Fundamentally: the industry is not clear how money will flow between devices, connectivity and content/application services in 3-5 years time (mature markets at least): cf. Plethora of ‘Free’ TV, ‘Free’ broadband, ‘Free’ telephony, ‘Free’ handsets offers in the market today.
- Telco management is increasingly unclear about where to invest its resources, so ‘Next Generation Networks’ are being built to support vertically-integrated telco business models which are increasingly threatened by new market entrants.
- Commercial and technical functions do not have a common vision of the required applications and business model(s)
- Investors are not convinced by telcos’ corporate strategies (commercial and technical).
3.) QUESTIONS – in the minds of forward thinking CTOs…
- Where should we focus our network investment and development efforts? Invest in access network, core network, content delivery network, SDP, FMC, CPE (home hub)?
- What NGN architectures do we need to build for different business model scenarios
- What is the (real) role of IMS? What does IMS enable the operator to do that can’t be done by Skype/Google/Yahoo/MS, or P2P/in the handset
- How can we (network architects/IMS leaders) work more effectively with our commercial colleagues?
1.) Fully understand the strategic context of ‘Telco 2.0’, ie. how to make money in an IP-based world (by playing to operator strengths).
2.) Fully understand your emerging competitors (internet, media and commercial transaction players)
3.) Explore different business model scenarios and their impact on NGN architectures.
4.) Adopt a more adaptable and loosely-coupled technology platform approach – around your (genuinely) unique telco assets
5.) Focus IMS on what it’s best at and do the rest in other ways.
5.) WHAT TO DO NEXT
a.) Read the ‘Telco 2.0’ report (we would say that, wouldn’t we!) and discuss in-depth with colleagues probably in a workshop environment.
b.) Be proactive in defining an integrated (commercial and technical) action plan to make your (commercial and technical) strategy ‘Telco 2.0 compliant’. ‘Telco 2.0 Compliant’ = a business model that maximises the leverage of telco assets, extracts maximum value from non-network assets (billing, logistics, physical retail distribution), takes advantage of the unique position of the operator in the network. The innate advantages of telco operators over network edges (internet players) are: costs, scale, security, flexibility, trust, integration, standardisation.
c.) In the meantime, challenge yourself, your colleagues and your vendors about IMS using these prompts:
The Trouble with IMS...
Here is a summary of the current theory behind the revenue growth potential from IMS-based services:
“We (telco operator) and our partners will create compelling applications for customers. Our partners will be especially keen to work with us (telco) in preference to others because a.) we (telcos) provide the best channel for reaching customers (consumers/businesses) and b.) because IMS gives us (telcos) so much better functionality vs alternative channels (internet giants, direct, other service providers). As a result we will generate more revenue, and make up for the decline in traditional telephony revenue sources. We, and the rest of the telco sector, will therefore attract more investment and our share prices will rise.”
Clearly, some kind of realtime-aware service delivery platform is required for realtime services. But there are some important questions to ask:
- Who actually gets to deliver those services?
- And, is it wise to tie up so much of the AAA, billing, identity, profile, preference, and QoS infrastructure in the same pot?
If the telco isn’t delivering the service - which increasingly is the case with IM, multiplayer gaming and video sharing - is integrating so much in a giant ‘SIP proxy-cum-application server’ really the right way forward?
We analysed the IMS white papers of the major NEP vendors. Most don’t start with the user. Most start with the technology. Here’s a summary of our analysis of the general approach to IMS today:
User Experience is not fully considered
- By closely tying network functions to access, you're limiting users' choice of access networks and/or having to invest in complex roaming schemes which don't have a good historical precedent of success (eg. MMS).
The IMS services vision is not compelling
- The IMS service examples of vendors and operators today (Presence, VOIP, IP Centrex, Multimedia, Unified Messaging, etc) tend to either be:
o Rather trivial (and implementable on existing switching systems), or
o Assume total service control by one operator (single number - how likely am I to take all my services from one source?), or
o Assume an implausible degree of technical and business co-operation across multiple operators (e.g. call forwarding from one number at reasonable rates and without creating any forwarding loops).
o In the enterprise market the focus is on "selling the disease and then the cure": ie. expensive firewalls that require expensive and inflexible holes like SBCs (Session Border Controls).
Telco competitive advantage/sources of value are not being leveraged
- The normal IMS service examples replicate "tablestakes" features that IM providers offer for free, and don't leverage any of the unique assets or advantages of the operator (billing, enterprise relationships, distribution, logistics, brand, etc).
- There is a misleading assumption in IMS that a central service provider is required for each technical function, and that the edge nodes are incapable of co-ordinating themselves: a simple historical example is flow control & retry in TCP/IP which eliminates the need for a "circuit aware" network; a more complex example today is the adaptive jitter buffering in VoIP codecs which mitigate the need for QoS.
- An excessive emphasis on ‘QoS’, when the real crisis on the Internet is ‘Security’ (and lack of underlying identity infrastructure).
- IMS strategies today fail to justify how value-add is being created from the IMS infrastructure when people can already talk on Skype for free -- and most of the QoS problems on Skype are really either internal to the PC (e.g. contention for CPU or network access) or local to the customer premises (first-hop to WiFi access point).
- Many of the IMS functions when decomposed are replicated for free on today's Internet (e.g. basic dyndns.org dynamic DNS routing -- eg. I can make a SIP call that will reach me wherever I am -- the "home agent" function is very cheap/free).
Poor understanding of internet design philosophy
- ‘Seamless mobility’ is already a reality: it's called the Internet, and offers perfect functioning interconnect of all nodes from all places (more or less – NAT, firewalls and censorship notwithstanding).
- The major limitation of IMS is the focus on SIP; too far up the stack. Most software apps are *not* SIP-based, even if they can be shoe-horned into SIP; or they don't speak the IMS dialect of SIP. There's nothing wrong with SIP per se, just that the lessons of 1981 and the end-to-end principle (http://en.wikipedia.org/wiki/End-to-end_principle) were ignored -- the foundational design principles of the Internet, which made it so successful.
- An example of where the "SIP: everything's-a real-time-circuit-because-we-can-charge-for-that" approach breaks down is: voicemail. I want to be able to record VM locally on my device at maximum audio quality and then upload it directly into another person's VM box -- and also not make their phone ring. This is a natural task for web services, and unnatural for SIP.
- Interoperable inter-carrier IMS has the potential to be a hideous nightmare to deploy -- as soon as new features start coming out, we've got a nasty feature interaction problem.
- IMS has technical risks, e.g. forcing traffic to follow ridiculous routes for roaming customers.
Device vision is blurred
- What we really want is devices that are "bearer aware" (rather than "bearer agnostic") and understand the non-functional constraints of the access network and adapt accordingly. Example: don't do my scheduled laptop back-up over expensive 3G network. This is generally ignored today.
Not focusing enough on the real telco opportunities from IMS
- Email spam has shown the limits of (internet) edge nodes to be able to coordinate to resist "negative-value traffic". Some great progress, but nothing close to what's normal on the voice/SMS networks (due to the identity and billing infrastructure of telcos and the legal/regulatory environment).
- HSS is the crux of IMS – a valuable identity store. That part will survive, because the IP/Internet model doesn't have a lot to say about provisioning to networks. (Technical standards exist like 802.1x, but business ones don't.)
Lack of appreciation that operator market control is disappearing
- Mobile IP centrex and other enterprise solutions face an adoption barrier with employees, who have a diversity of handsets from many operators.
- Integration with other services that the users already have (e.g. Yahoo photos) doesn't seem to have been considered - living inside a telco bubble (excuse the pun).
So, maybe we should review our IMS plans and focus on how we can support the things that are really broken in both POTS telephony and SIP+Internet VoIP telephony ...from the user’s point of view. Why? Because these are the things that people will be willing to pay for.
Below is an initial check-list to run through with your IMS vendor:
1.) POTS Telephony – what’s (really) broken from a user's point of view:
- Integration of call handling and messaging across fixed and mobile domains.
- Control over voice messaging: easily create, forward, browse and search messages.
- Interactions between businesses and consumers: badly timed and targeted today, layers of redirection at each end to get right person, laboriously slow and insecure exchanges of personal and transaction data via voice dictation.
- User mobility between home, travel and work domains: inconsistency and incompatibility, difficulty with pricing and apportioning usage, ultimately leading to things like carrying 2 mobiles.
- B2B calling an issue: no exchange of presence, or directory data; unencrypted, and exposes multinational companies in particular to espionage.
- Opaque charging for users, particularly when interacting with premium services and/or across national boundaries.
2.) Pure SIP+Internet VoIP telephony – what’s broken from a user's point of view:
- Absence of reach and adoption (who to call?)
- Device and service compatibility
- Spit (Spam over Internet Telephony) and security problems
- No packaged solutions via mass retail and distribution channels
[A more detailed version of this piece appears in this month's IMS Insider report - subscribe at www.ims-insider.com]
The Editor, IMS Insider - email@example.com