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June 14, 2016

Microsoft Buys LinkedIn: The Value of a Huge Directory

So Microsoft has acquired LinkedIn, for a $26bn cash consideration. Leaving aside the possibility Satya Nadella thinks he’s finally found a way to stop them sending him so much e-mail, what is Microsoft thinking?

The bear case is pretty clear. LinkedIn lost $166m for 2015, and Microsoft paid a premium of nearly 50% over Friday’s closing price. The losses are getting worse, too - in Q1 2015, the company lost $17m at the operating level, which had risen to $66m in Q1 2016, putting them dangerously close to beating 2015’s loss in the first half of 2016. Meanwhile, Microsoft shares fell 2.6% on the news. Depending on whether you like total users or monthly-active users (MAUs), Microsoft paid somewhere between $60 a user and $250 a user. The deal values LinkedIn at 7 per cent of Microsoft’s market capitalisation, as much as Sky TV. Really… is it worth that much?

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November 24, 2008

Ring! Ring! Hot News, 24th November, 2008

In Today’s Issue: Internet forecast wars on again; Odlyzko fights the nonsense; experimental high-def YouTube, and how to get it; BT: OFCOM ate my homework; Amazon’s CDN has landed; Telefonica wants a spaceship or two; T-Mobile UK is down; T-Systems blows the German secret service’s cover; VZW peeks at BHO’s CDRs; SearchWiki, another Google web-hoover; Ubuntu for mobiles; Lotus Notes for Nokia; Nokia and Yahoo!; Nokia and TD-SCDMA, possible faster Chinese rollout; HOWTO manage devices OTA in S60; GPS SIMs coming; Qualcomm’s WLAN LBS; CTIA fights for lucrative convict market; Clearwire-Sprint JV signed, shares tank; Indian consolidation coming; T-Mobile USA’s digiframe comes with data but no music; a cautionary tale about age verification.

It’s another round in the Internet traffic forecast wars. The vendors’ side last week published research claiming that a coming exaflood would lead to “Internet brownouts”; as TelecomTV points out, not only did they use identical language to everyone else who’s predicted this over the last 16 years, but just as always, world authority Andrew Odlzkyo disagrees and is probably right (his MINTS project claims that backbone traffic actually fell recently).

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October 21, 2008

Enterprise Contact Centres - a revenue opportunity for telcos?

HTK is a specialist supplier of ‘voice 2.0’ services. They’re one of the interesting group of companies who’ll be participating in the ‘Innovators Zone’ at the Telco 2.0 event. We’ll be presenting some of our new analysis on the (significant) market opportunity for telcos to provide services to enterprise contact centres on Day One of the event. In the meantime, we asked Marlon Bowser, HTK’s Managing Director, for his thoughts on this topic:

Chasing the Rainbow

The telecom industry is going through a time of arguably unprecedented change, with more opportunity for “service innovation” than ever before. With change comes the need to adapt and many Telecom Service Providers are opening up their networks to enable integration of third-party application services. The question is whether fostering such a culture and community of innovation is a business model that makes sense, and how it can be harnessed to generate significant financial growth.

Companies like BT and Microsoft are catalysing the market for innovation, with service delivery platform vendors waiting in the wings to prove that they’re the best bet to host the next big thing. The problem is that innovators and early adopters of new technology are often driven by an agenda of “cool” rather than one of “cash” - it may create excitement, but it rarely creates significant revenue growth.

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July 2, 2008

Telco 2.0 Use Case: Trading Hub for the Transport Industry

Telco 2.0 readers will be well aware that we’re very keen on any application that uses telco capabilities to remove friction and inefficiency from the wider world of business - perhaps the fundamental insight in the 2-sided business model is that the telco doesn’t only sell telephone calls as a finished product to end users, but also a much wider range of functions for upstream businesses to integrate into their production process. In terms of economics, these communications-enabled business processes usually exist to reduce transaction costs and thus facilitate trade that would otherwise not happen. Alternatively, they help larger enterprises to overcome their internal diseconomies of scale.

This use case is of the first kind; the telco platform as a trading hub, allowing the many companies that would never be able to build the mass-production IT systems that their bigger competitors use to benefit from increasing returns to scale.

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June 4, 2008

Use Case: Optimising Rolls-Royce’s ‘Product-Service’ business

This is a ‘Use Case’ taken from our 2-Sided Business Models report, which is out now (10% discount to readers of this blog). We have chosen Rolls-Royce as an example of both the type of target business model (mixing services with products) and a specific B2B VAS (Value Added Service) opportunity - field service - for telcos to sell into.

A major trend of the times is the blurring of the distinction between service industries and manufacturing, creating product-service systems — in our own technology field, we can already see plenty of examples. Is IBM a manufacturer or a service provider? Ever since its early 90s crisis, it’s put a lot of effort into its services businesses (consulting, systems integration, hosted/managed service operations), but not only does it still make computers, it carries out fundamental R&D on topics like semiconductors, lasers, batteries and magnetic materials — even more hardware than the chip makers.

Similarly, everyone would agree that Ericsson manufactures telecoms equipment, but one-third of its profits come from Ericsson Professional Services. On the other hand, Google would seem to be a quintessential services company, but it actually makes its own servers. Further, some functions that are typical of tech manufacturers - R&D, design and engineering - are found in companies that outsource all their manufacturing, but whose output is still recognisably a physical product, like ARM Holdings.

But this trend is even more pronounced outside the IT/telecoms world. Many, many companies turned to integrating their products with services as a way of fighting commoditisation over the last 30 years - and it’s often cited as a way of making industry more sustainable (pdf). We’ve picked one example which offers insights into where telcos might take their business.

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May 29, 2008

Telco 2.0 Case Study: Mobile Signature

We first encountered Mobile Signature at this year’s Mobile World Congres with Telefonica, but the system’s big success has been with Turkcell. And we think it sums up a lot of the possibilities and challenges posed by Telco 2.0.

mobsig1.png

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April 22, 2008

Another Kind of Platform: Telcos as Development Environments

Another common use of the word “platform” that sometimes confuses people is the way it’s used to describe the technology that goes around individual applications in a computer system. Like Microsoft Windows, Linux, Adobe Flash in the browser, Symbian S60 in a mobile phone, or what have you. IT people spend a lot of time arguing about them, which is probably less stupid than it sounds, because the history of IT has been the history of development platforms.

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April 7, 2008

IVR search: a ‘Google’ for phone menus?

We’re putting together our Voice & Messaging 2.0 report, which includes a directory of all the interesting companies in the space we’ve come across. We’ll be presenting some of this at our event next week of course. But in the meantime, we’d like to tell you about one new company that’s extra-interesting.

When we speak about Voice & Messaging 2.0, we’re usually thinking in terms of services, software, or devices that offer… voice or messaging! But it doesn’t have to be limited to this. Our conception of the “ultimate communications experience” doesn’t imply that we’re looking for a killer app, a single, perfect integrated client; it could as well be provided by a school of independent, specialised but interoperable components. They might be within a common user interface, or might not.

So as well as new forms of telephony, we’re also interested in new auxiliary technologies. What, for example, is the new telephone directory? Web search engines are already great at digging out telephone numbers, but then again, numbers themselves are getting less important. When we’re using the phone to interact with an organisation, rather than an individual, anyway, the phone number is not particularly important. What we need to find is a function.

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March 17, 2008

Voice Revolution Watch

The vision of our Voice & Messaging 2.0 project is coming ever closer in reality. Two pieces of news this week underline this; first, Sony extends in-game VoIP to more PlayStation Portables. (You’ll remember, of course, that earlier this week Sony filed patents on a PSPhone.). Second, IBM pours $1bn into unified comms. In this article we explore where the telco can fit in…

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October 15, 2007

Enterprise 2.0: Creating new VAS opportunities for Mobile Operators

Building on recent discussions on this blog about network Mash-Ups, Graham Francis from Aepona gives us a preview of what he’ll be talking about tomorrow at the Telco 2.0 Digital Product Innovation Summit:

How to create a richer set of Enterprise service offerings using Telecom Web Services to integrate Enterprise applications with network knowledge, mobility and service reach?

The adoption of Web 2.0 concepts and technologies in both the carrier and the enterprise market will be the next major step in the evolution of Telco 2.0 for those carriers seeking to offer VAS [Value Added Services] to Enterprises.

Is it possible that the carriers could take a market position as “Enterprise 2.0 enablers”? In Aepona, we think this is the next step on the roadmap for many carriers seeking to deepen their relationships with their Enterprise customers and to further monetise their network assets in the process.

What is the relationship between Telco 2.0, Web 2.0 & Enterprise 2.0 concepts?

Enterprise 2.0 is a term coined by Enterprise application vendors to “horizontalise” vertical applications and enable new desktop (or client) applications to be created that match to the end user use case requirements. In the same way that many carrier networks are implementing telecom web services technologies to abstract a set of vertical applications towards an SDP layer, Enterprise organisations are starting to implement “Web 2.0 Enterprise Servers” to do exactly the same thing for their own users.

What is the market opportunity?

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September 3, 2007

Ring! Ring! Monday News Analysis - 3rd September, 2007

This week we look at important stories concerning Product Innovation, Broadband Connectivity, Technology Disruption, Regulation, Partners.

Digital Product Innovation

Nokia is reconceptualising itself; it wants to be an “Internet-driven experience company,” not just a crummy old vendor. To that end, its web presence is being shuffled into a new portal called “Ovi” (it’s Finnish for “door”), which will integrate its new music shop, its Web 2.0 activities (eg Lifeblog), and a rebooted mobile games division. Even N-Gage looks like it might get a new lease of life..

Telco 2.0 Comment: Horizontalisation isn’t just for travel agents and bloggers, y’know. Nokia is probably the keenest of the vendors on trying to shunt the carriers out of the way and get a direct relationship with users; this was only to be expected.

100 million prepaid subs in the Middle East.

Telco 2.0 Comment: Note the surging growth at Iran’s two heavily prepaid networks, Taliya and Irancell (MTN Investcom); contrast the sluggish incumbent MCI. The recipe for emerging markets is still low prices, prepay, credit transfer, SMS, and autonomous distribution. These strategies also work pretty well in Germany too…

China Telecom’s business is hammered by mobile.

Telco 2.0 Comment: It’s not just in the 100% mobile penetration world that the fixed-line business model is sinking fast - it’s also in rural China.

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August 27, 2007

Ring! Ring! Monday News Analysis: 27th August

These weekly news roundups are a new Telco 2.0 service; they focus attention on news items that might not be Telco 2.0-related at first sight, or big enough to warrant a whole post to themselves, but do contain important developments. They are grouped under the same categories as the rest of the Telco 2.0 blog.

Digital Politics and Regulation

Rene Obermann, CEO of Deutsche Telekom, wants to keep some monopolist privileges; and who can blame him?

Telco 2.0 Comment: It’s curious how some of the regulations introduced to create competition in the telco market are actually profoundly anti-competitive. Network-sharing, for example, was discouraged in order to create competing physical networks. Now, of course, it’s becoming ever clearer that competition is horizontal; and requiring duplication is really a way of protecting big telcos by increasing the barriers to entry.

Viviane Reding is reportedly plotting a new, broader European regulator on the model of Ofcom.

Telco 2.0 Comment: As the competition spreads horizontally, so does the regulator.

700MHz auction set for the 18th of January.

Telco 2.0 Comment: It’s gradually coming closer; soon we’ll see the colour of Google’s money. Speaking of money, the FCC seems very keen to insist on big reserve prices, a total of $10bn. As usual, the notion of free spectrum is a long way away.

Digital Product Innovation

Microsoft Windows Live apps on your Nokia N-series phone.

Telco 2.0 Comment: It may “only” be Live Messenger, Hotmail, Contacts and Spaces, but please note that these are all communications applications. And the carriers? They’ve been disintermediated.

New MVNO offers cheap roaming rates…with an interesting twist.

Telco 2.0 Comment: Now this is interesting; we wonder what the “network” they claim to own is. Clearly they haven’t got spectrum rights in 110 countries, nor have they bought enough base stations to cover the world. Perhaps this is one of the first rogue core networks?

Damned cool idea from Hewlett-Packard: the printer that is everywhere.

Telco 2.0 Comment: Here’s a cracking idea; rather than print documents and take them with you, why not print-to-file on one of HP’s servers, which gives you an SMS shortcode in return? When you need the document, you send them the code as an SMS, and they either send you a PDF file, or route it to a publicly-available printer of your choice. There’s a Google Maps mashup to help you find them. HP is bringing in chains of copy shops as commercial partners, Google as map provider, and acting as a platform itself; so where are the telcos?

Digital Worker

Unified Communications vs End Users

Telco 2.0 Comment: Is the vision of unified enterprise communications, so dear to companies like Cisco, opposed to end-users’ freedom to organise their own communications and communities? Skype, and the Asterisk folk, seem to think so.

Digital Youth

Security expert: beware security threat. According to F-Secure there are now some 400 items of mobile malware in the wild.

Telco 2.0 Comment: It’s not malware, it’s unauthorised innovation!

Online gaming shoots past social networks

Telco 2.0 Comment: We’re talking low-investment casual games here; but even if the margins are tiny, the growth rates here show that there is real potential in this sector. Clearly, it addresses some human motivation.

Broadband Connectivity

Indonesia ; mobile network number 10 launches

Telco 2.0 Comment: No-one should need telling that the emerging markets can’t get enough telco, but this is extreme. 10 mobile operators? It’s also interesting that the new entrant, Smart, is a greenfield CDMA operator. Far from common..

Hutchison 3UK loses slightly less money.

Telco 2.0 Comment: Perhaps their new role, competing with T-Mobile as the geek’s mobile operator and throwing out partnerships with MSN, Yahoo!, Slingbox, and Skype, is beginning to help? You’d do well to remain sceptical, though. It’s not as if 3 hasn’t spent enough money being cool.

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April 20, 2007

Telco 2.0 event: Digital Worker Summary

‘Digital Worker’ means different things to different people. At the Telco 2.0 event we tried to look at this market segment from lots of different angles to see if we could come up with some new insights for the industry. We started with a basic hypothesis, outlined here, and were stimulated by special presentations from BT, Orange, Cisco, Nokia, and Intel among others.

Many thanks to Dean Bubley who facilitated the session and to Colin Mallett who acted as ‘Analyst-in-Residence’. (For those not there, more details of the agenda and stimulus presenters here).

Here is a summary analysis (the presentations and detailed verbatim output is reserved for participants):

The day was kicked off by Bob Brace of Ambulant (and, formerly, Nokia). He gave the day a quick introductory tour of many of the key elements facilitating Telco 2.0 and FMC services in the enterprise and small-business markets, including the emerging role of the Internet and disruptive non-operator services and applications.

Highlighting the broad differences within the “knowledge worker community” he noted some of the key problem areas facing next-gen operators:

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March 8, 2007

Digital Worker Market - More Telco inspiration please

There should be a significant growth opportunity for telcos in the business market, especially the SME (Small & Medium Size Enterprise) segment. But it’s a challenge, due to current perceptions of what the end-user (knowledge worker) needs, what’s sold to them, and, maybe most importantly, the way it’s sold.

Below is the ‘hypothesis’ we will be debating in the Digital Worker stream at the Telco 2.0 Brainstorm on 27-29 March. We’re looking to:

  • Clarify knowledge worker needs and usage trends (current and future),
  • Articulate the key challenges in responding to this (looking at devices, identity, security, packaging up propositions, and sales methods - stimulus from Nokia, Intel, BT Global Services),
  • Learn from case studies (from BT’s ground-breaking MyBT programme, Cisco’s internal use of it’s voice/web/video collaboration tools, and Microsoft in terms of making office apps mobile)
  • Refine the strategic options that Operators have in this market (exploiting un-met needs, and re-configuring the value chain).

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Telco 2.0 Strategy Report Out Now: Telco Strategy in the Cloud

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