APIs 2.0 presentation at the Telco 2.0 conference in Orlando 11 December 2009

APIs 2.0 – Models for Monetization
Sanjay Jhawar – Partner - Ideas and Plans

2
Who is Ideas and Plans?
Sanjay Jhawar
BridgePort NetworksSVP, Marketing & BD
Venture CapitalEIR - St. Paul VC, VP Wireless - CIR Ventures
Microsoft Mobile InternetDirector, Prog. Management
Sendit AB (mobile email)VP Marketing & BD (exit to Microsoft in 1999)
Motorola DevicesEuropean Bus. Mgr - smart phones/dataWAP Forum Founding Board Member
David Hose
Board Member Buzzwire,
Useful Networks,
CEO: PublicEarth
Advisory BoardsRave Wireless, NIM, SnapVine, m:metrics, Roundbox, Azteq, Scanbuy
Prior experience
OpenwaveChief Development Officer GM $100MM Client Business
SignalSoftFounder/CEO through IPO & acquisition by Openwave
Intrado/SCCVP Engineering
Perry LaForge
Founder/ChairCDMA DevelopmentGroup (CDG)
Board Member inOvate, FusionOne, Transaction Wireless, Nextivity
Advisory BoardsRosum, Roundbox, Tensorcom, Scintera Wireless, Bitfone (sold to HP), Wichorous
Prior experience
Co-FounderinCode Telecom Group Kodiak Networks
Eric McCabe
JumpTapVP Marketing & Co-chair, Mobile Search Group, Mobile Marketing Association
OpenwaveDirector of Marketing
SignalsoftVP Marketing & Board member for Location Interoperability Forum
US West: Associate Director, Corp. Strategy
Pittiglio, Rabin, Todd &
McGrath (PRTM)Lead Partner over 18 years during growth from 6 to 400 employees
Early roles at Qualcomm, Airtouch/PacTel, Conner Peripherals
Network of Senior Level
Industry Affiliates

3
We focus on Mobile and Converged Telecom
Plugged-In
Thought Leaders at Board & CxO level
Strong network: operators, vendors, VCs, media and ad agencies
Close connections to startup community
Strategy
Market assessment & value prop development
Strategic and business planning
Strategic options
Execution
Early stage startup acceleration & fundraising
Marketing and Product Management
Business and Corporate development
Interim General Management
AngelInvestors
VentureCapital
Funds
Entrepreneurs& founders
PrivateEquity
Funds
Growing mid/
late stage
companies
EstablishedTelecom
Equipment
Vendors
Affiliate
Individual
Consultants
NetworkOperators/xVNOs

ISVs have many choices
BusinessMobility Framework

Telcos have many potential API business models
Charge per API use
Transaction based (some combination of APIs used)
Capacity based (monthly fee for max no. of API calls/hr)
Bundled within premium minutes, messages or megabytes
SELL
Advertising revenue share
App store, Telco revenue share 20-30%
Software as a Service, Telco revenue share 25-50%
SHARE
Outsourced Managed Service, Telco revenue share 50-80%
In-network Managed Service with revenue share
License and deploy In-network
BUY

And Now For….
A Short Skit
…. between a Telco 1.5 executive
played by Sanjay Jhawar
…. and a Web 2.0 ISVplayed by Thomas Howe.

Skit / 1
Telco 1.5 executive Web 2.0 ISV
I hear you have a cool application
Yes we are very proud of it
We're interested to see if we can put it on our network
How would that work?
Well, send us the specs and call flows of how your
app works and give us a month or so and we'll produce
a requirements doc on how you could port to our app server
Hmm, so if we do that we'd have
a major development project.
How long would it take to launch?
Well, BSS and OSS integration are the longest pole items.
Our IT department is backed up for 9 months.
Lets do a lab trial first without BSS/OSS, say 4 months.
Then we'll do a market trial to assess user demand
Then we’ll look at BSS/OSS integration for launch.
You'll need to maintain a lab system for us as well as the live system.
We have to ensure the application is robust enough to carry our name and that it will scale.
A year, tops.

Skit / 2
And how would we fund our investment?
Well, we have the potential to roll this out to millions of users.
When it launches we'll pay you a 15% revenue share up
to 100,000 users, and you provide the necessary infrastructure.
Then we'll move to a per user perpetual license up to 1m users.
After that we'd look for a site license for a fixed fee.
Could you fund our development up-front?
We don't typically do that.
We want you to have “skin in the game” to see it succeed commercially.
Well will we at least have an exclusive with
you for this category of application?
You know we might be required to do an RFP at some point, so no, we can't do an exclusive.
How about you just promote our application on your portal and we sign up the users and give you a percentage?
Oh, we'd want this to only have our brand on it.
These are our customers you know.
And it needs to show up on our customer's existing bill.
And I'm sure we'll have a dozen things we need customize or change.

Skit / 3
If I spend my development resources on my core service,
I see users sign up as soon as I release it and revenue immediately.
Over a year we'll roll out half a dozen major features upgrades.
You have to understand the way we work with our vendors.
There's a whole certification process, and it takes some time.
We can accommodate maybe one major and one minor service update a year.
But, listen … this could be huge for you! Why don't you send us your specs first and
then your team should come out to see us in a month ?
Hmm. Listen, can I get back to you in a few … weeks?

What do ISVs want? To run a business….
Technical
No telco “science experiments”
Access to technical capabilities not available over the top
Revenues
Predictable time to revenue measured in months not year
Reach to largest addressable numbers of devices and users
Streamlined user experience especially for provisioning
No cap on the upside
Costs
Upfront understanding of total investment to go through certifications and trials
Business model matching costs to revenues for predictable margins
Lowered cost of communications compared to using 3rd party message aggregators call termination providers

Strategic questions for Telco 2.0 carriers
Core/Non-Core
ToleranceforRisk
CustomerAccess
InnovationModel
Ability for
Org toEmbrace
Complexity

Science experiment?
Investment for telco to build app
Long tail or looking for hits?
Comms as the meat or as spice?
Business or consumer?
Core/Non-Core

Market adoption risk low or high?
How well is user behavior understood ?
What makes the similar app attractive elsewhere
Risk to performance of othernetwork applications
Tolerance
for
Risk

Internal vs. external innovation
Strategic or tactical application?
Feature extension or whole application?
Telco technical value add?
Golden Assets, Service Aggregation, QoS …
Access to necessary IP?
Legacy system architecture constraints?
InnovationModel

CustomerAccess
Is Telco buying or selling ?
Which way does the money flow?
Who is bringing the customer?
Who has the sales force able to sell?
Who is able to bill?
Branding
Importance of community value to proposition
Value in existing app brand to customers
Fit with telco marketing proposition / brand?
Feasible for Telco to do customer support?

Telco ability to create the whole solution / value chain / ecosystem
Shared customer support model?
Willingness for multi-year investments
Ability for
Org toEmbrace
Complexity

17
Business Model - Demand Curve Mapping
OperatorBusinessModel
Revenue Share
Broker / Bill on Behalf Of (%)
Subscription/traffic
Co-brand
App Provider
Operator
Branding
High touch support
Lo touch support
Operator RFP
Developer
Support
ExternalIndependent Partner
Operator
Internal
Managed
Service Vendor
Operations
Control
Feature
Roadmap
Control
Shared
App Provider
Operator
core
services
extended
features
from
external
services
4a. Enabled e.g. 1-800 (no brand association)
4b. Endorsed – the new “on deck” e.g. T-mobile channel on Android Market
4c. Open apps – e.g. GetJar
fully
fledged
service
better
probability
of a “hit”
possible “hits” within target segment
1
2
3
4
1a. Build internally
1b. Feature via managed service provider
1c. Feature via external mashup

Examples
1 - Core carrier owned & branded service
Sprint Voice SMS
Extension of both voicemail and SMS
Managed Network Service plus handset clients, both provided by Core Mobility (now Smith Micro)
API to existing voicemail system
Included in certain plans / handsets
2 - New carrier branded complete service proposition
Verizon VZ Navigator
Managed Network Service plus handset clients, provided by Networks in Motion (now TCS)
API for A-GPS, messaging. Sold as an app with $10/month or $3/day usage fee or free with certain plans.

Examples
3 - Co-branded partnership services model – shared customer ownership
Verizon Ringback Buddies powered by envIO
Facebook app to assign and share ringback tones with friends
Revenue share
3 - Co-branded partnership services model – shared customer ownership
T-Mobile/RIM - Wi-Fi Calling with MobileOffice
Blackberry Mobile Voice System
PBX number & functionality on Blackberry
Co-sales to enterprises

Telco Golden Assets – Use Them or Lose Them
Eroding - telcos did not act fast enough
Location outdoors
Google Maps using cell tower info & GPS
Network address book
ISVs can sync from the smartphones too
Call control integration with voicemail
Google Voice, Youmail, Talk2Us etc.
Still Golden for now
Subscriber intelligence and profile
Billing and rating
Call control - inbound triggers
Outbound identity management –
Making a call or sending a message that comes from subscriber phone number
Video optimization for device, and dynamic network conditions
Access to QoS
Carrier class voice
Three screen usage - ability to get on the TV vis STB

Who could use network call control APIs?
Blackberry Mobile Voice System

sanjay.jhawar@ideasandplans.com

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APIs 2.0 presentation at the Telco 2.0 conference in Orlando 11 December 2009

by Sanjay Jhawar

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APIs 2.0 presentation at the Telco 2.0 conference in Orlando 11 December 2009 Presentation Transcript