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

Making Telecoms the EssentialSpice of Every BusinessEcosystem: The Slow, PainfulRise of APIs in Telecoms6th SDP Asia Summit27-30 March 2012 Singaporewww.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

Fundamental Misconceptions:Its about Business not Technology Go to Market Services Wrap Services Exposure / APIs Network Developer Capabilities / Support Services

Fundamental Misconceptions:Its Across the Tail, not the long TailInternal 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 Note this is significantly backed off the• Hosted Unified Communications $1B analysis I did back in 2005 (its one• Directory $2.6B third the size), as operators are late to• Machine to Machine $1.5B market, many opportunities have• Number Provisioning $4 to $9B significant reduced due to the entry of• USSD API $14B (developing markets) freemium, web-based and device-based• Billing non-digital goods $24B business models…• Collaboration $1B• Content Delivery $1B• IVR / Voice Store / other voice related VAS $2B

Open APIs: Why bother? • 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 devicesCloud, TV, multi-devices support, communications, messaging, etc. are all now delivered throughAPIs. To remain relevant and not be bypassed a comprehensive API strategy is essential to Telcos’ 6 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 28 billion API calls / month (Jan 2012) 11 billion API calls / day (Feb 2012) 19 billion API calls / day (Dec 2011) 14 billion API calls / day (Nov 2011) 12 billion API calls / month (Dec 2011) 5 billion API calls / month (Nov 2011) 2 billion API-delivered stories / month (Dec 2011) Over 80% of all traffic via API (Jan 2012) Over 500 billion objects stored in S3 (Jan 2012) 8

“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! 9

Some Developer Quotes from 2009 We have spent 18 months They (Orange Partner) select what working with Orange Partner apps their customers see! How is and achieved nothing. Its that a developer community? Isn’t simpler to directly go to the it the customer that decides; relevant product manager haven’t they learnt even the basics from Apple! 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 Operators’ ADCs must undertaking, Operators solve the 4 key challenges must resource adequately facing developers: to not repeat the problems distribution, discovery, of the past. predictable process, and a clear way to make money 10

Some Developer Quotes from 2011 Even though we have direct operator SMS connections we I’d assumed WAC had finally work through other SMS died/been put out of its misery... aggregators as its simply too Have not really followed much of difficult to work with what they are trying to do. Recall operators. it was some attempt to allow web developers to get some mickey mouse apps on a phone cos app LBS Developer stores didnt really help that group.LATAMDeveloper Games We no longer waste our time with operators. Developer 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. Plus these guys are also your customers which doesn’t do you any favors! 11

General Developers’ Perspective of the Initiatives + they only really need 2 things…12

A Large Engaged Customer BaseApple + Android >300M customers13

A Clear Path to Cash $$$ Note the big brands, e.g. FT, already have these so can useadditional mechanisms such as the high street, web, TV, etc. 14

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

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

by Alan Quayle

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