Vodafone Betavine: Nice Platform...but Where's the Commercial Framework?
We are busily beavering away on our latest research project, The 2-Sided Telecoms Market Opportunity, some of the findings of which we will be presenting at the CMO Forum at the Mobile World Congress in February. The final analysis will be a key input to our own Telco 2.0 event in April. As we've pointed out in previous posts, this report seeks to explore the opportunities for building a 2-sided (platform) business beyond advertising (the current area of industry focus).
As part of our research, we have been exploring a number of successful 'platforms' from outside Telecoms (Google, Amazon, Ebay, Monster, The London Stock Exchange, Betfair, Maersk), to understand what capabilities and strategies are required to build a successful 2-sided business model.
We have also been looking at existing platform efforts from telcos. One example of this is Vodafone's Betavine.
Good Start But Show Me the Money!
Betavine is exploring several issues directly relevant to a platform play for a two-sided telecoms market:
- Developer relationships and fostering of third-party activity on a Vodafone platform
- Opening up of core APIs (location, WAP push, SMS, etc.) to enable developers to create applications and deploy them on the network and devices
These are central to developing a platform strategy: Vodafone's R&D team are providing the environment where end users and application developers can interact using a Vodafone platform.
The problem, at the moment, is that this is a TECHNICAL platform but it fails to address the COMMERCIAL requirements of developers: there is no incentive for them to develop products and services because they cannot monetise their efforts. The Vodafone Betavine team claim that the platform is about fostering collaborative engagement and that if developers come up with exciting services, the necessary commercials will follow.
But, as the exchange below illustrates, this is putting the cart before the horse:
The whole exchange is found here.
The point here is that to build the required scale for a platform business to be successful, the right incentives need to exist on both sides of the platform. Developers (or other providers) need to see value in the platform as a distribution method and consumers need to see sufficient volume of products and services to make using the platform attractive.
Until platforms such as this move outside R&D departments and into commercial areas, they will remain marginal activities.