Lee: Hey Martin, how are you doing today.
Martin: Hello Lee, very well, how are you?
Lee: Well, it's an interesting life. It's never a dull day in my life. Never has been. I sort of keep hoping I will get a dull day, but no it doesn't happen, and I don't know what I'd do if I did get a dull day. But I am amazed at how interesting it can be; let's put it that way in the speed of it.
You've written, shall I call it a report? We're going to ad lib this hopefully and we're just hopefully going to catch up as two friends here. You've written a report on cloud communications?
Martin: Yeah, a white paper.
Lee: It's "The Cloud and Communications" and it's "Rethinking the Business Model for Telephony, Unified Communications, and Social Media to meet the needs of Modern Commerce". Hey, sounded a little dry at the end there. Give me a quick synopsis.
Martin: This paper is a weigh mark on me drawing out the map of this territory of the new converged ITN telecoms industry, or whatever we want to call it. And the paper's core thesis is that the cloud is much more than just cheap plumbing for IT. Any discussion of the cloud that doesn't also include some consideration of what's happening in the communications space, particularly personal communications, the tools that we all use every day to talk to each other, is really incomplete. And the future of those communication tools is intimately tied up in the cloud in new business models enabled by the cloud.
Lee: Can I jump back a little bit because lots of people are using the term "cloud". In many senses, if you take the telecom network, the traditional telecom network then, its centralized components, telephones are sharing the memory and processing of centralized components. Surely, the telecom network is a cloud network.
Martin: It's very similar to one, and you could say Cloud v0.1 is the PSTN. The API let's you embed that cloud application into your other services and it's called SS7 and it's very useful. There's a problem with this cloud, which runs one, maybe two applications of telephony and SMS. That is a rather severe limitation, that it doesn't have the flexibility and indeed those two applications, we managed to bend and twist them and incorporate them into our different patterns of being. But they're fundamentally patterned on old analog technologies and old analog ways of thinking and being.
Lee: The cloud, are you seeing as sort of going back to mainframe days?
Martin: Actually in some ways something completely different, going off in a different angle about the cloud, which is not seeing the cloud as being a technological phenomenon at all, but being much more of a socioeconomic one. If you think of a pattern that's occurred four or five times over the last 200 years of getting coal up the ground and putting it into machines so you can start - mechanical energy to amplify our efforts and then you put on the wheels and you've got a steam train. You start producing oil and electricity and you get all these different revolutions.
Each time you've got a new, cheap source of amplification of human effort, well the cloud is a comparable revolution. It helps amplify ideas and information, and the result of that is a change in the patterns of how we live and how we live and how we conduct business. If you focus primarily on virtualization and centralization of IT into datacenters and mainframe like stuff you're missing the real story, which is not about the technology at all.
Lee: Just staying on technology just for a moment, when you're saying "cloud", often it's just being used to mean that you access application via the web browser. We had Yahoo mail in the '90s. You were accessing your email. It didn't seem that exciting. I'm wondering what's getting hyped here?
Martin: What's the thing that's new and different? As everyone points out, it's that we've been doing hosted applications for the best part of two decades, and what's changed? What's different here is the ability to extract and exploit the information that exists within these applications and string the applications together to create new kinds of value.
The way in which Google Maps can be embedded into some other application and the intelligence that Google has about you and your location from latitude can be used in other contexts. Each application provides some source of cheap information that other applications can then consume. It's really seeing the rise of something a little bit analogous to the Internet.
We think of the Internet as a thing but it's not really a thing. It's a sort of agreements to exchange packets between different networks. The comparable thing, let's call it the "sky" rather than the "cloud", is a set of agreements to be able to exchange information between different cloud based applications, just like Google let's me sign a terms of service to use Google Maps inside my application.
In some ways, the cloud is just like Ethernet or IP. It's just a way of delivering a thing, but the real interesting thing is not Ethernet or IP, but in the case of the Internet or in the case of the cloud, it's what we might call the sky, which is the connected thing that changes the world.
Lee: We're just meaning web call, like you just think of SOAP in the '90s.
Martin: Yes, but that's the raw technology, but that's not the interesting phenomenon. The interesting phenomenon is when you start to create new flows of information and new flows of value in our economy and what's missing today, a critical component, is rethinking the role of what we might call that "Cloud 0.1", the PSTN and similar technologies in the "Cloud 1.0", which is what we're building at the moment.
We have a set of pre-cloud communication technologies, post and telephony, a whole bunch of communication technologies that are kind of cloud-ish, Skype and Facebook, and I think there's a whole new set of behaviors that are required which one might call "true cloud" communication systems that have a new suite of properties that let them be embedded and interact with applications, and particularly applications of ordinary, everyday business. I'll give you a few examples if you like.
A simple example is voicemail. Today, voicemail is incapable of interacting in a meaningful way with a CRM application in a call center. There is no way of them leaving me a voicemail with a security certificate attached to it, and me hearing "This is a voicemail from HSBC Bank," and knowing it really is from HSBC Bank, and then me pressing hash to return the call, and the call being sent back with the appropriate security credentials and carrying on the session from the right place. It's about rethinking communication tools to support the patterns of interaction and commerce that the cloud encourages.
Lee: I find it very hard not to say when I'm not following something. It's clear you want to say "Hey, look it's not the technological change which is significant," but I actually don't understand the clear demarcation of the technological change. If I could get my head where it's something technologically changed which is causing other effects, like socioeconomic, but we had Yahoo Mail in the 1990's. We had SOAP ways of exchanging data. Where is this new cloud thing?
Martin: Let's take an example from a previous revolution, which was oil, an oil-based economy. The first order effects were around up until the motorway system was built. It was taking marginally existing ways of doing business and replacing horse drawn carriages and maybe some trains with cars and trucks. Then there was a second phase which was the growth of suburbia, malls, and motels, and people going off on motorized vacations and the like which transformed the economy at large and transformed peoples' patterns of living and working. That's what we're seeing at the moment.
What you were doing with Yahoo Mail in the 1990's, it had hardly any impact at all on how you did business with companies. You effectively replaced a phone call or a fax or a letter in the post with an email, and it was more efficient, but it didn't really particularly change how you did business. It just became another channel to the customer. Whereas, once you start to modify or enrich those communication channels, whole new forms of commerce and whole new patterns of doing business with customers suddenly become possible.
Lee: So it's just continuing the evolution of the Internet.
Martin: It's kind of the difference between first order effects of a technology arriving, and the sort of second order consequences that follow on from that, and it takes time for those to unfold. That is where we are with the cloud. We've had 30-40 years of rapid innovation in the transmission, storage, and processing of bits. Now the cloud effectively is consolidation of that into a platform on which a new wave of stuff can happen, and where cheap information can be embedded into every device, every business process, everything we touch. It becomes invisible.
Another example from the past of this phenomenon was electricity. When electricity first became a mass phenomenon in the early 20th Century, people on the farm would go out and buy one motor, and buy a bunch of adapters, and apply that motor to a bunch of different uses. Today you buy an electric toothbrush which has a motor in it. You don't think about the motor. It's just there.
In this room at the moment, the past is like a PC. The PC in front of me is different from having a smart TV. One thing is a discreet information processing device. The other one connects to all the different services I use, but I don't think of it as a computer.
Lee: I've been getting hung up with this term cloud. It sounds more like ubiquitous computing is what you're meaning, which is giving storage, processing, and bandwidth everywhere.
Martin: That's focusing again on the technology, delivery things, rather than the services and capabilities it makes available.
Lee: Is the cloud promising services? The cloud is a technical thing, just like ubiquitous computing.
Martin: I said earlier that the cloud in some ways is a bit like IP. It's when you join the network together and you get the inter-IP or the Internet, it's when you join the clouds together to get the sky or whatever you want to call it. That's the new phenomenon thing that's actually interesting, which is this cloud over here from Google exposes these capabilities. This cloud over here from Walmart exposes those capabilities and this one from Amazon has these capabilities. When we start storing these things together, we can start to do new and interesting things which we couldn't do before.
Lee: Okay so to me it just sounds like mashups and in one sense it sounds like the Semantic Web. It's something further up the stack of moving the data.
Martin: If you think of mashups in a sense, in one sense it's a way of putting together a bunch of different capabilities, incorporating a bunch of APIs. In another sense it's a whole bunch of different people have made available some capabilities and you have some kind of relationship with them which lets you consume those capabilities. They could be open source, they could be paid, they could be a number of different bases. If we focus on those relationships that are out there, the mashup thing doesn't quite capture it.
The whole economy is based on forming relationships and trading things so mashup in this sense is just a way of trading value with each other. That's what applications are going to be increasingly built up from. It's not one monolithic lump of software, but it's lots and lots of different pieces of flows of information brought together to solve some problem.
Lee: When it comes to cloud, the way you spoke about it, and you gave analogy to IP and when you join one network to another but it's high in the news profile, technology news, that there isn't standards for moving applications and data between cloud providers. It's not portable. You can't take your EC2 app and redeploy in a competing datacenter easily. What do you mean by joining up?
Martin: This occurs at the technical level, which is to be able to take your virtualized stuff and your data storage and move them about. That problem will increasingly be solved. That's not really what I'm referring to.
The level I'm referring to again is above relationships. If I want to build an application that's funded with advertising, it's very easy to go to Google and take their AdWords, AdSense, I forget which one is the one you embed the adverts.
Lee: It's AdSense. If you're a third-party site it will automatically embed in your web page.
Martin: So Google AdSense lets me embed the ability to import adverts into my web page. What I can't do today is have a gadget on that webpage to interact with my mobile voicemail. I'll give you an example today.
I went to my bank's website and they have sent me a message on their website about a transaction I set up. They need to be able to pre-authenticate me before they tell me I've got a secure message. That's why they only send it to that website. There is no way of them federating that messaging system with my other messaging systems.
Ideally, I'd like to be able to have that message turn up in my Google inbox, but before I can open the message I have to enter my banking password. It just can't be done. That same way of exchanging value between different capabilities and services in the cloud, that pattern of how Google does it isn't yet replicated across the rest of the economy. And telcos in particular are selling very outdated products, particular with voice, that needs substantial rethinking if it's going to have a viable business model going forwards, I think.
Lee: So this is where you begin to get me excited because when it comes to that term cloud, I must admit it's not working for me. I'm just thinking it's a programmable web. When it comes to this isolated PSTN, and then you've got this whole ecology, which you seem to be calling the cloud, building all the time, and being able to have AdSense and people providing a service and can embed with others, and companies can create new services built on aggregating many services of others together; it's just this whole wonderful ecology which is unbelievably going to transform human society over the next 50 years. You see it exponentially increasing value probably as it builds. You see the telecom network will be left in the dark ages because it's isolated. It just cannot move and increase at the same value.
The question is we all wonder what's going to happen because if calls or what we call calls move to the public Internet, what about emergency calling? What about call quality? I use Skype all the time. We are using Skype for this call, but then there's always these big questions like what happens when you're on bad Wi-Fi in a hotel and you really need to make a call. It seems that we need both networks at the moment. It seems a bit of a dilemma.
Martin: Yes, I think there's a role that the fixed and mobile voice networks take on which is the physical transport of constant bitrate voice or whatever, which is still a useful thing.
Lee: The big question is not only is it useful, and critical, but when will the public Internet be able to support constant bitrate, real-time voice?
Martin: In some ways, it really doesn't matter. The value is really in new ways of signaling between various bits of software application about "The subject line in this call is..., please call us about your unpaid bill." The priority of this call is 7 and it should override your silent ringing setting or whatever it is, if it's an emergency call or something. If it isn't answered, then the following should happen to it, or if a customer is roaming, please send this straight to voicemail and do not call them.
That is the customer relationship kind of signaling that goes on. It's not an application; it's a bunch of capabilities. That could be implemented in SS7 probably, but in some ways focusing on how you manage the bit stream of the media is not very important. You can even combine and wrapper the existing circuit switch infrastructure with an IP signaling infrastructure that maybe has more flexibility.
That's kind of what I expect to happen. Look at what happened to LTE. It's trying to shoehorn in all the old ways of delivering the media traffic into LTE. Give up, just use the existing 2G, 3G for transporting the voice, and signal the rest of it somehow differently.
Lee: Let's see if you follow where I'm jumping here. You kind of wonder if the whole social behavior would change anyway, Martin; the whole idea of blind phone calls, you kind of wonder if that will sort of erode away. It seems that we're trying to keep past paradigms and past ways of using a technology, i.e. being able to transfer real-time voice with the protocols we call telephony. It just seems that may erode anyway, a paradigm shift.
Martin: It's really quite hard to judge where telephony will be positioned 10-20 years from now, how much value people will see in it. It's an interruptive medium. It requires quite a lot of effort on both parties to be present to the medium and the conversation simultaneously. You can't do other things whilst doing it very easily. Yet, it is extraordinarily powerful and intimate having a voice whispering in your ear. It also can be very efficient and effective as a way of engaging with an enterprise to solve a problem you've got. That's why we're defaulting back to a human, because the automated systems don't let you get the answer you want. It does work.
I'm less concerned about the standalone social usage and whether people will be able to ring a bell in your house from anywhere in the world when they've never friended you in the past, but really; how will voice evolve as a software application, and will there be as many voice networks as there are websites in the world, or will there actually need to be effectively a few voice networks? There will be a few ways of terminating a call, through Skype, through Facebook, through Google as well as through traditional telco ways of doing it.
Lee: If I'm allowed to jump here, you said something pretty much like Nic Carr said in the The Big Switch, that once you have what I'll call cloud computing, once you have access to storage, bandwidth, and processing available everywhere and fairly cheaply, it has a huge fundamental change.
One change I was excited about was what we might call augmented reality. It's part of a bigger picture, that you can have everything as a potential interface to interact with others. I think I gave an example once that you may see an augmented reality picture frame and when somebody calls you that picture frame changes to be that person. It's a subtle detail in your environment.
Martin: I think the problem we have at the moment is sort of the counterpart to augmented reality, which is deficient reality. If I call up someone in a call center, and I am filling in a form, I can't do the equivalent of just passing the form across the table, pointing at the field I'm having trouble with, and saying "What does this mean?" It's not as good as just being there in ordinary life, let alone being better than ordinary life by being able to overlay ordinary life with all kinds of clever metadata.
There's a catch up required in our conversational tools to be closer to just reality, forget the augmented bit. That's the gap. It's like if the enterprises talked to me, saying "Martin, would you like to buy this product of ours," or "engage in this business process" and then when I talk back to them it's as if they'd never spoken to me. "Please authenticate yourself, who are you? Why are you talking to us?" "I'm responding to your message." It's substandard compared to actual, normal reality of a conversation with a person, so that's the target really; is just ordinary conversation, but more automated.
Lee: And removing friction.
Martin: Yes, it's removing the valueless parts of the conversation.
Lee: So it seems that there is this lack of connectedness if we call it that. For example if I call a certain bank of mine, the lady who answers the phone tends to do bank transfers without really even authenticating me. It gives me concern that way. Another bank I bank with over-authenticates me, even though the lady there knows me, but she has to go through some huge procedure. There isn't this security certificate or something I can pass so she knows it is me. When you've got this scamming going on at the moment, when people pretending to be for example British Telecom and typically calling elderly people, at least according to the newspaper saying they're due X amount of money, what's your credit card number; we seem to be in a huge dilemma still.
Martin: The problem here is one of distributed information. It's like there is a bunch of capabilities in my mobile handset with the SIM card that can authenticate this device at least, if not me. Yet, that authentication capability can't be consumed at the other end of the conversation.
If you think of every device that's connected over the net as being part of the cloud just because it's in my hand rather than a datacenter doesn't mean that it isn't part of a resource that can be drawn on. Then what the cloud does is it makes it possible to expose that capability and it to be used by the bank to say "Actually, for this transaction, for that value, that's good enough authentication." If you want to transfer 25,000 Euros to another person we need another layer of authentication. If all you want to know is what's the mailing address to send in the check, then maybe you don't need any authentication at all.
It's choosing the right tools for the job but at the moment the communication tools are so inflexible that they don't offer any options other than caller ID, anonymous or identified. But if you imagine calling a call center through Skype, Facebook, or LinkedIn, they may start to offer richer options for passing on authentication of the customer.
Lee: That may come. You would think that globalization would demand that we eradicate the inefficiencies which we've spoken about and allude to in a greater scale. But, there seems to be competing forces against the automation that you, me, and hopefully much of humanity wishes for. Can you say anything about the forces which are holding this back? When I say forces, I mean political, economic, cultural, anything that you see that is holding this back. For example, the financial structure of termination fees; voicemail is good for a telecom operator.
Martin: Absolutely, I'm reflecting for a moment on my experience inside BT, trying to take some of these ideas of if we had better communication tools, they could be used to take costs out of these business processes and make customer experience better. As a communication service provider, you're actually on both sides of this. You're both just any old enterprise and you're also the communication channel for the customer. You can experiment in interesting ways.
It's also the barriers. There is a hideous tangle of legacy systems which do not lend themselves well to being opened up and exposed, and that's for security reasons, scalability issues, just plain interoperability, and licensing issues. It's like a big do not disturb sign written across all these IT systems built with a pre-cloud philosophy. It's the idea that the volume in the system might spike 100-fold tomorrow because of some great success just isn't thought about, whereas the cloud philosophy is plan for success.
There's also an organizational aspect to it, which is that just like Google is a company that has a different philosophy about how you do business, I think there is a cloud way of thinking about doing business and it's quite similar in a way to the difference between mainstream batch-based manufacturing and lean manufacturing. It's quite hard to get your head around lean manufacturing at first. It can actually be quite counterintuitive. Many companies who think they're doing lean manufacturing aren't really doing lean manufacturing, and are wrecking themselves in the process.
The cloud is kind of similar. It's a different way of thinking about doing business. There will be potentially a whole crop of companies that comes along and upend a lot of existing industry structures, just look at the previous revolution around the automobile. Companies like Walmart come along and they fundamentally transform how retailing happens.
Yet, in the context of telecoms in particular, I would point out the one you picked up of termination fees, which we talked about in the past is both a wonderful model to follow and a potentially dangerous impediment. It's a wonderful model in that once me Mr. Telco has captured this customer, anyone who wants to talk to this customer has to come through me, so I have a form of monopoly. But at the same time, it's a very dangerous thing because it effectively puts a price floor on communications and makes telco communication services completely uncompetitive in price.
This Skype call is in high definition, and it's free. There isn't a telco product at any price available to substitute for it. If they want to remain relevant, then they need to rethink their business model.
Lee: Maybe I'm jumping around a bit, but connected to that, the infrastructure which is obviously underlying this call itself, I want to say is ironically paid for mostly via telephony charges, and SMS. Infrastructure is a huge cost. It costs a lot of money to deploy infrastructure, so the trillion dollar question is you had said before that telephony and messaging revenue is beginning to decline in certain countries. I think you had a particular new phrase for it, if I remember.
Martin: Indeed, Peak Telephony is here.
Lee: Like Peak Oil we've hit Peak Telephony. Surely, this industry is set up for multiple shakeouts because the infrastructure possibly should be paid for via different funding mechanisms. I won't mention my point of view, but from your point of view how does paying for the infrastructure relate to how you envision what you were calling cloud communications?
Martin: It's probably three or four different parts to it, one of which is a continuation of the existing way but done differently, which I think rather than metered messages ad minutes it's more of a flat access fee. You join, for a membership fee, and it gives you a set of places in which you can consume the services being collected. So telcos just say your connected lifestyle, and do you really care whether it's via Wi-Fi hotspots or 3G or femtocell? No, just make me connected. It costs $50 a month or whatever.
The second part of it is the infrastructure will increasingly be paid for like sewers because the nearest piece of equipment infrastructure is sewers. It's just a part of the physical infrastructure of where you're at, and it's an extension of your building or whatever, or your town municipal sewer ring. That path of infrastructure ought to be funded that way increasingly.
The third part is cloud applications will increasingly come with postage and packing included so you might have a basic being connected thing with your devices online, but there will be some very clever quality of service stuff put into networks that will still be useful. It will still be useful even if you've got lots of fiber and lots of very high capacity wireless, and the cloud applications will buy the right to quality of access at wholesale and embed that into the applications. Like the home worker who is doing remote call center operations will not suddenly find their video link to the customer goes crazy just because their kid upstairs has turned on the Xbox 10 and started playing a game.
Lee: Okay Martin, so tell me more what's in this white paper. I know we've been on this call a little while, but I would like to explore a bit more if that's okay. Tell me some highlights from this white paper.
Martin: I started writing this white paper about six months ago to try to get out the essential insight I feel I've had of nearly a decade of studying the collision of IT and telecoms. The heart of the message is that communication systems for human conversation, that's voice, SMS, email, post, Facebook, Skype etc., need to rethink themselves in order to meet the needs of modern commerce. To do that, they need to look at three things.
Firstly, what are the needs of the customer and the enterprise to connect with each other, and who carries the cost of that connection? How to make that being connected available in all the places where it might need to be? An example of that from the past is free phone [tollfree], a product that telcos have offered to build up connections.
The second thing is interaction. How to offer a rich set of capabilities to interact between enterprises and their customers? A simple example of that might be that SMS I sent that is no longer relevant. Please delete it if it's unread and replace it with this SMS. Or I wish to call these customers but I do not wish to call them if they are roaming and they're in an inappropriate time zone. Please send the call to voicemail for me. That's a way of interacting with the customers more richly in order to deliver more efficient and effective business processes.
Lee: If I can just jump in there; you seem to be hoping these capabilities will become exposed by the telecom network but if you look at the speed of innovation from telecom operators, which is actually hindered by the way they're financially governed and structured, I must admit since we began the Emerging Communications Conference in 2008, even what would be classed as an innovative operator like BT has gotten rid of 25% of its staff. You seem fairly optimistic that they're going to expose this, but they don't even expose location today.
Martin: That's why I labeled the paper "Rethinking the Business Model for the Telco" but also for unified comms and social media. When you think of services like Google Voice, which gets you to the third part of that tri-co which is to transact, which is that case is adverts but it could be payments or authentication and all kind of other things; you can see Google buying up the basic delivery capability from the telcos at wholesale and building the application innovation around their dumb pipeness and building Google Voice as a kind of unified commons app. When you start to embed that capability to receive rich messaging into a social environment, then social media, unified commons, and the telco thing of voice messaging are basically all just facets of the same way - say application, way of reaching people.
Lee: To me it would seem much more likely that the likes of Facebook will offer communication means which knows that you're roaming far ahead in advance of any telecom operator.
Martin: Yes, and no; I think it's easy to get very enthusiastic about these players but the reality is that they are narrowly focused on advertising. That makes them miss out both the willingness of the end user to pay as evidenced by SMS and telephony, and the huge revenues it gives in powerful telcos, and wider opportunities to create efficiency in communication.
The reality is that the people who've got the money are the telcos and they have had successes like short codes and premium SMS that serve the needs of enterprises to connect, interact, and transact with customers. There is a basis on which to build.
But, the ways in which the telcos are going, things like the RCS Initiative from the GSM Association, are stuck in the old revenue model of how do we charge the end user for richer messaging. That's the wrong question. The messaging is basically free for normal consumers. It's how do I satisfy the needs of enterprises to connect, interact, and transact with their customers? They're asking themselves the wrong question.
Lee: They're looking downstream instead of upstream.
Martin: Exactly, so they have the great opportunity to build something that Google and Facebook can't touch. They've also got the history of doing it. The question is will anybody seize the initiative and maybe it will take one of their network equipment vendors or one of the emerging market telcos to take these steps.
Lee: Okay, so you're hoping that there will be one operator who takes a real step instead of nonsense you see at the GSMA every year in Barcelona, which is not really that exciting.
Martin: Right, and the way they need to do it, what they have to do is make their own customer service the flagship for using smart communications and given that telcos are about 30-40% of all customer care, customer service calls that go on are actually the telecoms industry itself with the public. Then their internal consumption needs are enough to bootstrap a whole new generation of CRM and social CRM applications.
Lee: Okay, maybe it's going off topic and your domain of expertise, but I'm not sure how much insight you gained at BT but there is a lot of constraint within telcos to keep the status quo. What you're suggesting doesn't sound like it gives a return in the next quarter or two quarters, or possibly the next five years.
Martin: I disagree actually. I think the opportunity for previous generations like the free phone number, put a very hearty return quite quickly, and were enormously successful. There is a grand history of doing a good job of serving the needs of enterprises and their needs to communicate with customers.
The opportunity to save costs internally by not leaving customers voice messages that are no longer relevant and not calling them at stupid times of the day and stupid locations or whilst already in the middle of a phone call or whatever are compelling enough to be done internally.
Lee: As you know, the Emerging Communications Conference and Awards is about looking at threats and opportunities so to begin to head towards the latter part of this call, I wonder if you could sort of summarize the opportunities and threats?
Martin: For each of the different ecosystem parts?
Lee: Take it as an open question; you can take any angle you want. You can take it from cloud communications as a whole, or any sub part that you've covered. Where do you see the opportunity in summary, where do you see threats?
Martin: The first opportunity is for communication service providers of all kinds, that's telcos, postal services, unified comms, and social media to engage in a much richer dialog with enterprises to understand their real needs to connect, interact, and transact with their customers. That's the starting point. It starts to understand the problem. The opportunities will fall out of that.
There's certainly the opportunity for many network equipment providers to start thinking about how to reinvent themselves. If you've been selling TDM switches and then IMS IP stuff, finding much more compelling use cases and business models to drive usage is an opportunity.
For threats, there is the threat of being Googled to the telcos, of Google Voice and Google Messaging, and Google Broadband being also competed against by Facebook Voice, Facebook Broadband, and the decimation of the telco revenue model against a price of zero is something to be taken seriously.
I suppose the real opportunity is for every member of the public and every enterprise to have much better experience in their everyday living. I think the future is actually quite bright. There is a lot of opportunity and I certainly wouldn't write the telecoms industry off in any way or form. It just may not be in quite the format that it's currently configured.
Lee: Okay, there will always be money in communications, and as you know it's a trillion dollar market. I'm just not as optimistic as I used to be that the infrastructure they have today, be it radio access, be it SIM cards, be it location will be exposed. I think the fact that location isn't being exposed and being able to be consumed into web applications today certainly tells me that any other steps are unlikely until that is done, and it's a fairly easy one to get the location from the VLR and so on, or access operator's billing infrastructure, or personal data, etc. It seems far off
Personally, I'm not optimistic and in terms of that there is big money kicking about and I have a gut feel that it's really the software industry which will drive the future of communications in a fairly democratized bedroom hacker type way of evolution.
Martin: Then it might just get slowly absorbed into good old fashioned telcos because you want to scale it up. You want to be able to plug it into the regulatory system. You want to do all this messy stuff of running it to the scale of hundreds of millions of customers. Then there are organizations called telcos that will take care of it for you.
Lee: Okay, like I said we haven't spoken for a while. I must admit since we need to catch up in person sometime but I must admit with what I've been seeing the last year I'm not feeling the most optimistic. But heading onwards with this, if I jump in and say "Martin, you kindly sent me this white paper. Is it free of charge?"
Lee: Martin, you asked me to keep the call no longer than half an hour and I notice we've been on for well over 50 minutes. I appreciate you taking the time out to discuss around that and I hope I wasn't too hard on you in any way.
Martin: It's always a pleasure Lee.
Lee: Thank you very much Martin, have a great day.
Martin: And you, thanks.