Disruptive Thoughts, December 23rd 2013
2013 Review, 2014 Outlook, Speaking & WebRTC Report
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And so we reach the end of 2013. My sense is that it's been an interesting year for the telecoms industry, but actually not that momentous. More of a year of preparing for change.
We've seen a number of new technologies enter the telecom industry's consciousness and which will likely have a major impact over the next three years - but which are still mostly at lab/prototype/pre-commercial stages. We've see a number of earlier services and technologies start to wither, or backers lose confidence - but they haven't actually capitulated and died yet. We've seen various important regulatory moves lined up - but mostly not yet finalised and put into force. There haven't really been any momentous newcomers to the Internet and app stage, that weren't already obvious in 2012. Apple and Google have mostly done "more of the same", for example. A range of major acquisitions were discussed - but mostly didn't happen.
It was perhaps appropriate that my end-of-2012 blog post was about "Anti-Forecasts". I predicted what wouldn't happen, such as adoption of RCS, NFC, VoLTE, sender-pays data plans and assorted other mobile-industry failures. (And, yes OK OK, I know I got the Nokia/MS acquisition 100% wrong. Still, 9 out of 10 ain't too shabby)
That's not to say that it's been a boring or entirely uneventful year. We've seen shocking revelations about privacy and network-based data interception courtesy of Mr Snowden, and the fallout is likely to continue. 4G/LTE mobile data access has become mainstream in many places. As has widespread "utility WiFi", which is usually venue-controlled and completely outside of the reach of telecom operators and the misguided "hetnet" visions of standards bodies. Nokia offloaded its handset business to Microsoft, allowing it to concentrate on more important and interesting parts of the industry, like mapping patents. Facebook has worked out how to monetise mobile adverts - and even Twitter has started to earn cash (including from Disruptive Analysis, although the results are as-yet equivocal).
My expectation is that 2014 will turn out to be more decisive - and perhaps more brutal - for the industry, in a number of areas:
And purely in the interests of giving a few laughs/palpitations/outrage (and being able to say "I told you so!", if I actually get one of these right), I'm going to make some complete guesses about possible 2014 M&A in the industry:
- Real-world mainstream adoption of WebRTC - with one or more blockbuster consumer use-cases, as well as innumerable smaller ones in enterprise & web niches. (If you aren't familiar with WebRTC, see below. It's the most interesting telecom tech I've come across in years, & a major focus)
- More markets clearly passing the point of "peak telephony", as standalone phone calls take a back seat to other forms of communication, or get embedded "in context". This will have numerous knock-on effects, including defensive attempts to "hide the numbers" as operators try to stop reporting voice revenues / traffic.
- Significant problems with VoLTE deployments, with numbers of launches creeping up only slowly - often where an operator has been forced into it. It's still very hard, needs IMS, needs devices - and adds no measurable real-world benefits, but with considerable costs.
- Some major moves around Telco-OTT (own-brand open Internet services) from operators: perhaps not a virally popular consumer service, but an acquisition or a major developer-platform success. Another research focus for Disruptive Analysis, which was the first to call the trend, back in 2012.
- Consolidation in European telecoms, as competition authorities recognise the inevitable
- Continued acquisitions among vendors, across the telecom/IT boundary, as exemplified by Oracle's purchases of Acme & Tekelec. NFV & SDN are major drivers.
- No discernable growth of either RCS/joyn or NFC mobile payments, both perennial turkeys - I feel a bit guilty still mocking the dead. RCS has now missed its small potential window of opportunity as an APIs platform too.
- A growing pushback & momentum against IMS, coming from within the telecoms industry, as it finally recognises the costs of 10 wasted years of zero innovation.
- Acceleration of the move away from handset subsidies in developed markets. Partly driven by cost/profit concerns, and partly by accounting-rule pragmatism, expect to see a lot more "handset finance" schemes through retail offered separately from the "plan". This may have some interesting impacts on reported mobile operator ARPU, which has often implicitly included phone-loan repayments.
- Lots of vendor noise about 5G - probably with attempts to accelerate its development, to shore up future holes in revenues. Likely to be used complictly by operators as a hammer to drag more spectrum into the mobile domain and away from broadcast and governments. Disruptive Analysis feels that NGMN did a good job on defining needs for 4G/LTE a few years ago, and is probably the right place for 5G definition as well.
- Messaging further fragments. A rump of lowest-common denominator SMS starts to become a bit clearer, but otherwise the "market" is revealed as a sham - messaging belongs in context; whether that is "tribal" with certain apps popular among specific groups, or with messages embedded into other social apps or handset OS's.
- We start to see chinks in the armour of E164 numbering. It's not as important as we like to think - although it's got some life in it where numbers are decoupled from access subscriptions. I don't think this is actually going to happen quickly, but I wonder if at some point governments try to force companies to ask customers for "preferred communications method" rather than insisting on phone numbers, on grounds of competition law.
- We start having sensible discussions about federated identity. Forget about "single sign-on" as it's wishful thinking, but maybe "6-10 sign-ons" is manageable and allows for appropriate user choice for given applications.
- The handset market starts to slow down, as many people stick with their existing (quite decent) smartphone rather than upgrade it. Reducing subsidies will exacerbate this. Everyone is saying "mobile-primary is the future" without thinking that maybe if people treat phones like computers, maybe they'll buy them & replace them like computers too.
- NFV (network function virtualisation) will grow faster than SDN (software defined networking) - but only for certain specific niches and use-cases. The idea of a generic "NFV platform" that has been standardised is a nice vision, but unlikely. We'll see point-products before platforms. What's unclear is whether those point solutions (maybe security, transcoding, perhaps even cloud IMS) expand and absorb more functions, leading to de-facto NFV vendor lock-in. SDN is also interesting, but I think it will have a lot of "gotchas" in design and implementation, which push it back to 2015 or 2016 for serious deployment.
- The telecoms world continues to "look East" for innovation and growth. I've been spending much more time in Asia, and I expect that to continue in 2014. Also interesting stuff coming from Africa, MidEast and LatAm as well - although up to now I've been less involved.
- We get semi-hard Net Neutrality in Europe and North America, but with enough loopholes & exceptions to keep lawyers happy, lobbyists bitter, and vendors continuing to pitch wishful-thinking QoS and "monetisation" solutions.
- HP + Genband
- IBM + ALU (minus RAN business)
- Ericsson + Tropo
- SingTel + one of the WebRTC cloud players
- Oracle + Dialogic
- Google + selected RIM assets
- Facebook + Spotify
- Orange, Vodafone, Telenor & DT buying various European OpCo's from each other. And maybe some smaller players outright (KPN? Belgacom?) if regulators & national ministries permit.
- Microsoft + something illogical but quite large
Top blog posts & presentations from 2013
Looking back through my blog's records, it's interesting to see what has gained the most attention and engagement.
Top of the list was my announcement of the launch of my WebRTC report, back in February, with the posts on the updates in June and October also getting a lot of attention. The report and its subsequent additions remains the pre-eminent analyst study on the sector's growth, use-cases and strategic issues. (Details are here - but contact me for an end-of-year discount)
An ongoing theme this year has been that telecom operators need to hedge their bets with new technologies, by pursuing multiple options for deployment and monetisation wherever possible. While the "official" approach, perhaps involving integration with legacy networks and services, may make sense, often those are neither the fastest or most interesting story. This post suggested that both WebRTC and WiFi need to be "desirably fragmented" within operators, and I followed that up recently with another post about WebRTC - specifically that IMS integration should only form a minor part of telcos' efforts around the technology.
Fragmentation also featured heavily in my diatribe against the notion that there is a "messaging market" that is in any way cohesive. There isn't - it's like describing a market for italics.
Another popular post was my suggestion of a completely new business model for mobile broadband, emulating the insurance industry's approach. More intended as a straw-man, to show that disruption is possible in the telecom industry, it got a lot of interesting feedback.
Although only published in mid-December, my "End is nigh for IMS" has got a large number of reads, and an interesting set of feedback comments both online & offline. As mentioned above, I think that 2014 is the year the death-knell begins to ring for IMS.
I've also been using Slideshare for a lot of my presentations from conferences and other events. The most popular has been my original WebRTC Summary deck from April, although the much longer WebRTC tutorial session from ICIN in October (co-run with Tim Panton of Tropo) has been well-received as well.
Speaking engagements & workshops
On that topic of presentations - are you planning an event in 2014, and looking for a provocative & influential keynote speaker, an experienced moderator / chair, or an effective strategy workshop facilitator? I speak at over 30 public telecoms industry events & private corporate meetings per year, around the world.
- Telco management roundtables/offsite strategy days
- Vendor customer events
- Industry association summits
- Public conferences
- Departmental / product-team brainstorms
- Press events
- Future of Voice, Digital Innovation & WebRTC workshops
Speaking engagements & workshops range broadly in terms of format, preparation time / customisation, interactivity level and fees charged. All, however, are guaranteed to benefit from encylopaedic knowledge of the industry, contrarian and provocative opinions, thought-leading analysis and clear independence.
Typical topics for presentations or workshops include WebRTC strategy & market development, Telecoms service innovation, Telcos vs. OTTs, 3G & 4G & WiFi & policy for mobile broadband, Billing & OSS issues, Regulation & spectrum policy, Net Neutrality & impact of politics, Emerging market communications & Internet evolution, or Enterprise mobility.
In terms of time/location/availability, please contact me for full details. However, as well as planning specific travel, please note I will likely have to time in SF/Silicon Valley around 27 Feb - 5 March as I am planning to be there anyway.
I also work with partners on joint events where appropriate - Martin Geddes & I have done numerous "Future of Voice" workshops, while I also have working partnerships with Alan Quayle, STL/Telco 2.0, Benoit Felten and others.
I'm not going to give a full section here about WebRTC, except to say that it's been one of my main focus areas in 2013 for research, consulting, events and my blog. It will continue to be so in 2014 as it matures and starts properly disrupting some mainstream sectors. I'm looking forward to participating in some events in HK & Singapore in January as the trend moves eastwards.
Things to watch for in 2014:
- Telcos following in Telefonica/Tokbox steps & launching or buying developer-centric cloud platforms. NTT has already done so recently
- A bunch of surprising DataChannel applications emerging that are totally orthogonal to the mass of videoconferencing and normal-ish VoIP use-cases
- Lots of vertical-specific applications, especially in healthcare, education, finance and general retail.
- The first full-scale WebRTC enterprise platfoms for UC and contact centres
- More big web players piling into WebRTC (Facebook? Twitter? LinkedIn?). My money is on LinkedIn - how about recruitment video interviews directly on the website?
- WebRTC and advertising being blended somehow
- More non-browser WebRTC, especially in mobile. I'm expecting to see Android support aspects of WebRTC APIs natively in the OS.
- Tentative but unenthusiastic moves by Microsoft & Apple towards WebRTC as it gets standardised & a key HTML5 feature in browsers
- VP8/H264 getting resolved as either "both", "neither" or "who cares, anyway?" as everyone realises that transcoding is inevitable sometimes anyway
- Fragmentation occurs - but is manageable despite the complaints.
For more on WebRTC, check out my landmark strategy report & ongoing updates. If you want to purchase the report or updates, I am offering a 20% discount on the listed prices before Dec 31 - please inquire via email to (Information AT disruptive-analysis DOT com). As it's the holiday season, there may be some delays in response, however.
Happy New Year!
I hope you've found this newsletter useful - feedback is most welcome. Please also follow me on Twitter at @disruptivedean
I'm currently considering relaunching / redesigning my private analysis channel @DApremium - probably in conjunction with a private LinkedIn forum for interaction and discussions. Watch this space for more details. Also, expect more published research on both WebRTC and Telco-OTT.
I look forward to working with you all in 2014. Have a good holiday & Happy New Year.
Founder, Disruptive Analysis
Upcoming events/travel for Dean Bubley & Disruptive Analysis
(Note: some of these clash - exact attendance schedule is tentative & TBC. Please see section above if you have an event & you would like Dean Bubley / Disruptive Analysis to speak, moderate or attend)
- Jan 9 - IMA Conference, Tel Aviv
- Jan 21 - WebRTC Asia, Hong Kong
- Jan 23 - WebRTC Asia, Singapore
- Feb 27-March 6: Free for workshops in SF / Silicon Valley
- May 20 - STL Partners OnFuture, Mountain View CA
- June 6 - TADS Hackathon, Madrid
- June 10 - Next Generation Services Platforms & APIs, Munich
- June 11 - STL Partners OnFuture, London
- June 17 - Communicasia, Singapore
- June 17 - WebRTC Conference & Expo, Atlanta
- December - ITU Telecom World, Doha