SAP Mobile Services: Video communications a perfect storm

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“You’re headed right for the middle of the monster”.

Today, we are seeing an alignment of key conditions in the video communications landscape, where the rapid pace of change and the interplay of supply and demand are combining to generate the mobile industry’s own Perfect Storm.

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SAP Mobile Services: Video communications a perfect storm

  1. 1. Video Communications: “A Perfect Storm” SAP Mobile Services, Operator Guide 2013 Ramsey Masri, Vice President, Sales & Alliances, Aylus Networks
  2. 2. Video Communications: “A Perfect Storm” “You’re headed right for the middle of the monster”. Today, we are seeing an alignment of key conditions in the video communications landscape, where the rapid pace of change and the interplay of supply and demand are combining to generate the mobile industry’s own Perfect Storm.
  3. 3. Video Communications: “A Perfect Storm” Consumer use of video has entered a new phase of growth, driven by devices, services and networks built from the ground.
  4. 4. Video Communications: “A Perfect Storm” We have also seen a dramatic change in how consumers use Skype to do more than just make voice calls. At the same time we are witnessing the advance of mobile broadband networks designed to support video communications. Connect the dots, and we have a series of separate and significant events that are combining to have a massive impact on the industry.
  5. 5. Video Communications: “A Perfect Storm” Video communication is not the same as voice communication. Make a voice call and you can expect to ‘connect’ with anyone you wish because the operators themselves are also connected. IPX networks connect data networks in the same way, but there is a catch. Video communications (carried over IP) is predominantly peer-topeer, which means users are only able to reach people on the same video service using the same calling software.
  6. 6. Video Communications: “A Perfect Storm” The Storm rages on Although the emergence of these video service islands effectively limits users, this issue has neither hampered the growth in OTT video communications, nor has it harmed the brand appeal of the players that offer them. However the OTT model has serious shortcomings. A video calling service that only permits users to communicate with their friends is an alien concept to everyone else out in the wider ocean. Users will require the same freedom and flexibility when they make a video call. However, for this to happen, there will need to be companies that have the capabilities to bridge the service islands.
  7. 7. Video Communications: “A Perfect Storm” A problem and a golden opportunity for service providers The problem is how to wring more value out of today’s IPX networks. The opportunity lies in the ways providers can make money by charging for inter-operator video connectivity on IPX networks. Properly implemented, universal video connectivity should ‘just work.’ What’s more, video should also be a simple upgrade option to an existing voice call. Finally, this connectivity and convenience should come at a price. In fact, there is no reason why it shouldn’t command premium interconnection fees.
  8. 8. Video Communications: “A Perfect Storm”
  9. 9. Video Communications: “A Perfect Storm” The economics of video calls Video calling occupies a significant amount of bandwidth, which is quite costly.
  10. 10. Video Communications: “A Perfect Storm” Will users pay for the interexchange that bridges the service islands, allowing them to make video calls to anyone they choose? The evidence that consumers will buy in to this proposition is overwhelmingly positive. Developing the pricing and packages will hardly be this simple. In time we can expect to see many more bundles and offers hit the marketplace, with value-added premium services charged separately.
  11. 11. Video Communications: “A Perfect Storm” Expect operators to make significant investments to launch video communications that provide universal connectivity, with the aim of charging for interconnect to other service providers. A huge task that lies ahead, and one the industry must face. .
  12. 12. Video Communications: “A Perfect Storm” For the complete article, updates and to join the conversation please visit: https://community.sapmobileservices.com Download the complete guide here: http://sap.com/mobileoperatorguide
  13. 13. © 2013 SAP AG or an SAP affiliate company. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP AG and its affiliated companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Please see http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark for additional trademark information and notices. ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 13

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