Making Telecoms the Essential Spice of Every Business Ecosystem: The Slow, Painful Rise of APIs in Telecoms. SDP Asia 2012

Making Telecoms the Essential Spice of Every Business Ecosystem: The Slow, Painful Rise of APIs in Telecoms

6th SDP Asia Summit

27-30 March 2012 Singapore

www.alanquayle.com/blog

© 2012 Alan Quayle Business and Service Development

Structure

• Fundamental Misconceptions

o Its about Business not Technology

o Its across the Tail, not the Long Tail

• Why Service Exposure matters

o Quantifying the opportunity

o Why all businesses are moving to APIs

o Understanding the Telecom situation

• BlueVia Case Study

• Verizon Case Study

• Key Points

Go to Market

Fundamental Misconceptions: Its about Business not Technology

Services Wrap

Network Capabilities /

Services

Services Exposure / APIs

Developer Support

Fundamental Misconceptions: Its Across the Tail, not the long Tail

Internal Innovation:

Eat your own dog food

Partner Innovation:

System Integrators / Content Partners

Long Tail /

Emerging Partner /

Unknown Developer

Telco APIs are at least a $115B per annum Business by 2015

• Payments API (digital Goods) $2B (assumes a competitive fee of just 10%)

• Presence / Location $4.5B (note assumes a solutions based approach not just raw API revenues)

• Long tail messaging $3B (ignore short tail as aggregators do that today and internal operator politics will

limit what can be addressed with the messaging API)

• Voice Call Control $40B

• Multimedia Call Control $2B

• Advertising API $7.5B

• Hosted Unified Communications $1B

• Directory $2.6B

• Machine to Machine $1.5B

• Number Provisioning $4 to $9B

• USSD API $14B (developing markets)

• Billing non-digital goods $24B

• Collaboration $1B

• Content Delivery $1B

• IVR / Voice Store / other voice related VAS $2B

Note this is significantly backed off the analysis I did back in 2005 (its one

third the size), as operators are late to market, many opportunities have

significant reduced due to the entry of freemium, web-based and device-based

business models…

Open APIs: Why bother?

6

• Make money – 60% of all listings on eBay.com added via their APIs

• Save money – SmugMug saves > $500K/year with Amazon S3

Storage

• Build brand – Google Maps 300% growth vs 20% MapQuest

• Move to the cloud – Over 80% of all transactions via their API

• Go anywhere – Netflix now available on over 250 devices

Cloud, TV, multi-devices support, communications, messaging, etc. are all now delivered through APIs. To remain relevant and not be bypassed a comprehensive API strategy is essential to Telcos’

survival. Note Telcos were working on API exposure back in the ’90s.

Top 15 API Markets

7 Telco APIs are relevant, APIs are not just a “Web 2.0” thing

API Billionaires Club

8

11 billion API calls / day (Feb 2012)

2 billion API-delivered stories / month (Dec 2011)

19 billion API calls / day (Dec 2011)

12 billion API calls / month (Dec 2011)

5 billion API calls / month (Nov 2011)

14 billion API calls / day (Nov 2011)

Over 80% of all traffic via API (Jan 2012)

Over 500 billion objects stored in S3 (Jan 2012)

28 billion API calls / month (Jan 2012)

9

“Why are you inventing APIs available in most mobile SDKs? What is the point? Why would any developer

want to restrict their apps to a single operator when they only need to

restrict to single platform.” source developer response to 2011 API

survey

The market is confused about operator APIs, non-operator APIs are moving fast, and there is much prejudice against operators for the sins of the past. Partnering is essential!

10

Some Developer Quotes from 2009

AT&T and Verizon’s developer communities are broken. We’re no longer engaged, we’ve focused our development efforts on iPhone, Android and

Ovi because there is a clear path to cash (the customer).

An ADC is a large undertaking, Operators

must resource adequately to not repeat the problems

of the past.

We have spent 18 months working with Orange Partner

and achieved nothing. Its simpler to directly go to the relevant product manager

They (Orange Partner) select what apps their customers see! How is

that a developer community? Isn’t it the customer that decides;

haven’t they learnt even the basics from Apple!

Operators’ ADCs must solve the 4 key challenges

facing developers: distribution, discovery,

predictable process, and a clear way to make money

11

Some Developer Quotes from 2011

We no longer waste our time with operators. Apple and Android have created direct access to a large engaged customer base of 200M+

customers. Operators’ stores are fragmented, with unengaged customers, unreasonable rev

shares, they don’t keep promises, and are simply too difficult to work with.

LATAM

Developer

Even though we have direct operator SMS connections we

work through other SMS aggregators as its simply too

difficult to work with operators.

LBS

Developer

I’d assumed WAC had finally died/been put out of its misery... Have not really followed much of what they are trying to do. Recall it was some attempt to allow web

developers to get some mickey mouse apps on a phone cos app

stores didn't really help that group.

Games

Developer

Plus these guys are also your customers which doesn’t do you any favors!

12

General Developers’ Perspective of the

Initiatives + they only really

need 2 things…

13

A Large Engaged Customer Base Apple + Android >300M customers

14

2008 Alan Quayle

A Clear Path to Cash

$$$

Note the big brands, e.g. FT, already have these so can use additional mechanisms such as the high street, web, TV, etc.

Telecom API Myths

APIs are ONLY a method to deliver a service, it’s a bit of technology, its irrelevant to the buyers.

The focus has to be on the service (solution to a business problem), e.g. the Mobile Payment Service.

When your brand is on an F1 car, the product does not need to be sold, its brand is marketed.

Operators are marketing not sales machines.

Put Simply

• Telcos need partners to sell services (business solutions) delivered

through APIs.

o Verizon and Telenor both achieved success through partnering.

o Telcos have little experience in business development and competitive sales

processes where customer inaction is the dominant state.

• An API is just a piece of technology to deliver a service which solves a

business problem.

o Focus on the business problems your APIs can economically solve with your

partners.

o Focus where Telcos are strong: Communications and Billing.

• API standards are NOT necessary for API launch.

o Focus on what works and copy that, like every over industry.

BlueVia takes a Different Approach

• BlueVia is based on the learning from O2 Litmus and Open Telefonica.

o O2 / BTCellnet’s history of developer communities stems back over 10 years

• Undertaken extensive developer surveys and listened to the many developer

frustrations

o Developers were pushed to Apple and Android after operators raised expectations then

abandoned developers in the previous 7 years

o BlueVia’s model should be part of every operators business model options

• BlueVia makes several critical assumptions

o Customers pay for APIs and developers share in the stimulated revenue (traffic and / or

advertising), this enables Telefonica to claim they pay developers to use their APIs!

o APIs can be used across apps, web pages or business processes, Telefonica does not

expect applications to go into the Telefonica app store

• Clear differentiation from other operator initiatives

BlueVia Principles

• Global developer platform (not community) that helps take apps,

web services and ideas to market

• Built on four principles

o Scale

o Tools

o Business Models

o Path to Market

• Web standards: Oauth, REST

• Zero financial risk to developer

• Low friction, plug and play

Keys to BlueVia’s Success

• Open and honest approach to the market recognizing the challenge

operator APIs have in being relevant to developers; and

• Willingness to experiment and explore new technologies and

business models to meet developers’ needs.

23

2011 Alan Quayle

Case Study: Location Enhanced Call Center

• Helping callers even when they don’t know where they are to reduce costly dispatch

mistakes and to substantially reduce the costs of customer service time by reducing service

call duration.

• Automatically routing calls made to a central number to the local point of sale to leverage

the personal service from local stores and franchises to close more sales and deliver better

service.

• Reducing the hassle and time in

answering the question

“Where are you?” to realize

operator cost savings and

improve customer satisfaction.

24

Case Study: Location Enhanced Call Center

• Technocom (Aggregator) has integrated Verizon’s location and messaging APIs

into its Location‐enhanced Call Center and IVR Services

• FleetNet America, Inc. (www.fleetnetamerica.com), a third-party vendor

management company that coordinates emergency roadside assistance and

maintenance management for all types of commercial equipment.

o When someone breaks down and calls roadside assistance, the IVR will confirm it’s OK

to get the person’s location for only this call.

o As the agent has the location information, time is saved and human error is removed.

o Then when the truck is scheduled, an SMS is sent to the person with the truck’s

estimated arrive time and contact information, which again saves call center agent time.

o The savings enabled by the location and messaging API can be in the order of tens of

dollars, so the API charges are negligible.

25

Keys to Verizon’s Success

• Partners such as Technocom and Loc-aid translate the APIs into

business solutions for enterprise customers; and

• Verizon has implemented a privacy framework that put the

customer in control of their information, yet is easy to use by its

partners creating a slick privacy experience.

Overall Points

• Its about partnering and business development – rare skills in an

operator

• You do not want nor need a developer community

• Standards do not matter – follow the current OneAPI activity not

OMA and copy others’ success

• Talk to other operators – we need to work together on making

business happen not grandiose standards activities