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To discuss Dean Bubley's appearance at a specific event, contact information AT disruptive-analysis DOT com

Wednesday, October 08, 2014

Mobile IMS/VoLTE is just for cost-saving. WebRTC & Telco-OTT are for new revenue

A question to readers: what is the overall penetration of carrier VoIP lines into the installed base of broadband connections, both fixed and mobile?

The answer may surprise you. It's currently just 8% overall.

It's that low partly because of the huge volumes of 3G devices and connections that now exist, which all use circuit telephony and SMS. It's also because carrier VoIP use is still only creeping up slowly in consumer broadband, to around 30-35%,12 years after the first such service launched. Finally, although LTE is now cracking through the 250m user barrier, only a tiny fraction currently have VoLTE.

Another question: how do you think that number will change over the next 5 years?

The answer - it will grow pretty fast. In fact, it will double, to a huge 16% penetration of carrier VoIP into the global broadband base. That will be pretty variable by country - some markets like South Korea, Japan, France and the US will be disproportionately high.

Well actually, that's not huge. Only about sixth of the world's broadband lines will have undergone "IP transition" by the end of the decade.

Why so low? Well, again 3G is largely to blame. While advanced users will upgrade to 4G, even more previous 2G users will move up to 3G in their place. But also, many LTE users will not use VoLTE, but will stick with circuit fallback. Only operators with great coverage, high ARPU and predominantly post-paid, contract user bases will tend to invest in all the complexity of IMS in the medium term, given the lack of any obvious new revenues. We see this today - even established operators in markets in Europe are dragging their heels on VoLTE, or perhaps only talking about using it in rural areas.

Why is this all so slow?

The reason is that it's ultimately all about cost-savings, maybe with a tiny veneer of new services. 

Fixed-line carrier VoIP is about reducing OpEx on clunky old switches, and in some case releasing assets tied up in big, old, phone exchanges. Property refarming, if you like. There's a small amount of enterprise hosted UC and a handful of other products/features, but they don't move the needle enough to enhance telcos' overall fixed-line revenues.

In mobile, IMS is being driven by VoLTE - either because operators are being forced into it (end-of-life CDMA moving to LTE) or in order to chase cost-savings again, from OpEx with older core networks, or with the ultimate hope of refarming spectrum assets. There is very little obvious additional benefit - VoLTE will not increase revenues and there are no obvious major new revenue-earning IMS applications.

(Some are arguing that RCS might save money compared to old SMS infrastructure, but I'm unconvinced, especially as it brings the value-negativity of joyn and the pain of getting people to use RCS applications. I'm increasingly hearing of telcos finally coming to their senses about RCS, fed up with 7 years of wasting money, resources & opportunity to vendor wishful-thinking and GSMA cluelessness).

Will WebRTC help IMS thrive? My regular line is that "IMS needs WebRTC much more than WebRTC needs IMS". It can help extend IMS-based VoIP onto a greater number of endpoints, more cheaply and quickly - for example, onto PCs and tablets that don't have native IMS capabilities and likely never will. This is indeed valuable, as it amortises the costs over a wider base, and helps accelerate beyond normal upgrade cycles. 

I am less convinced that long-tail developers will be interested in IMS capabilities exposed via WebRTC APIs - I have not seen (m)any use-cases that make sense and can't be replicated more quickly and easily via other platforms, especially given low device-side penetration and fragmentation of operators. More interesting is the potential for the reverse - accessing IMS-based services using a 3rd-party login rather than being a "subscriber" to a given operator. This allows (for instance) log-on with Facebook to an IMS-based conferencing system.

Some other innovations will also help tip the balance slightly - Metaswitch's open-source cloud IMS Clearwater is a cheaper, more flexible way for operators or developers to experiment with IMS as a platform, or create niche or prototype services and mashups. But I would argue that reducing the costs and vendor-led rigidity of IMS is necessary but not sufficient here - it may enable some new telco-cloud offers, but it still confines developers to some rigid raw ingredients like "calls" and E164 numbering. A lot of growth and value in IP communications will come from fragmentation and "de-lamination" (a theme I'll pick up on in another post).

Overall, IMS is slowly increasing its presence in mobile. But the keyword is slow. Despite the few recent launches of VoLTE, it is important to remember that devices running mobile IMS services are still incredibly rare. Apart from Korea & the US, few countries will quickly migrate 3G user bases to very high % of LTE anyway. 

Like fixed IMS, we will see mobile IMS used either for cost-savings, or to replace obsolete end-of-life core networks. There are still no clear additional sources of revenue or differentiation. WebRTC will help extend it and implicitly reduce per-user costs, and enable a few enhanced use-cases, but it is not a magic bullet.

IMS will not disappear - it will likely still exist as legacy even in the future post-IMS cloud/web telco world. But it will certainly not dominate the mobile landscape - despite its creeping growth, it will never account for more than a small fraction of total mobile-user communication events, whether measured in messages/minutes, or more modern metrics of perceived value, engagement and relevance.

Telcos need to maintain a strong and growing emphasis on non-IMS forms of communication if they are going to find new revenues from voice, video or messaging, rather than merely slowing the decline. These can be sales of major vendors' UC systems to businesses, Telco-OTT applications like Telenor appear.in, WebRTC platform plays like Telefonica Tokbox & NTT Skyway, or numerous other forms of innovative "embedded communications". While WebRTC will be a critical component here, it is not the only approach. 

Organisationally, this all remains a challenge. It is very hard for telcos to reconcile the conservative, traditional IMS mentality with the more software-centric world of modern communications capabilities. Yet that is the challenge which needs to be managed by telco CEOs and CFOs. If they allow future "communications services strategy & architecture" to be dominated by IMS, they will stifle true innovation and potential sources of value and competitiveness. 

It is right that most mobile operators continue to work on IMS, but that must be seen as just one of the paths to future services and capability exposure. Protected fiefdoms and entrenched groups must not be allowed to delay or distract other units working on non-IMS options. I hear too many examples of the "white blood cells" mistaking a beneficial (but fragile) initiative as a pathogen and trying to kill it. 




Mobile IMS is not a "special flower". C-level operator execs must make sure that it is matched by investment in other forms of communication platform & capability as well. 

IMS is for cost-saving. WebRTC and Telco-OTT is for new revenue. By the end of 2019, only 11% of global mobile broadband users will be reached by IMS/VoLTE.

If you are interested in the future role of IMS and its links to WebRTC and service innovation, it is covered in depth in the new 2014 WebRTC Strategy Report & Forecasts from Disruptive Analysis. Details are here



Sunday, October 05, 2014

Net Neutrality solution: Force telco execs & network engineers to swear an "IPocratic Oath"

I've been having one of my periodic Twitter debates about Net Neutrality with colleague & co-disruptioneer Martin Geddes. [Rough timeline is here although it blends a couple of threads & I've edited a bit to make more sense]

As per normal, it's involved bit of back-and-forth about the nature of the Internet, broadband - and how to manage networks operationally and how this relates to policy and the law. Given the current FCC and EU debates around neutrality, so-called "specialised services", fast lanes and related topics like zero-rate charging and app-based business models, it is a timely discussion.

Martin often takes the view that laws should be based "bottom up" starting with how networks actually work, taking into account the realities of TCP/IP, queuing and scheduling in routers and their integral buffers and so forth. He (and others) argue that the Internet isn't really "neutral" anyway, because at a microscopic level there are always algorithms that decide how and when packets are forwarded and in which order. 

In other words, all our cute analogies with pipes or aircraft seat-classes are wrong. All those cartoons of multi-coloured packets flowing through networks? Nonsense. That's not the way it works. And at that level I agree, absolutely.

Where I disagree is how laws and regulations should be framed, and from what starting point.

My view is that policymakers should think about "big pictures". And when the word "outcome" is used, it should be at a macroscopic level of "What do we want our citizens, businesses & society to get from the Internet and/or broadband?" and working down from there. Obviously there is a point where this political "policy" has to map onto network "policy" and operational realities. 

But stating upfront what objectives you would like to achieve - and perhaps more importantly, what you want to tell voters in elections - is a critical starting point. And obviously, there's a host of other things here around promoting innovation, enabling productivity, encouraging investment in networks & Internet infrastructure, promoting freedom of speech, reducing red-tape on businesses, encouraging healthy telecoms competition & companies, fostering employment, social inclusion and so on. Some of these will mutually conflict, as will the technical or economic realities of running the networks. That's life. Compromises, grey areas and legal terms like "reasonable" are inevitable. We can't run the world based on mathematics, even if that's how we'd like to engineer it.

The standard response for that type of argument is "right, so what's the technical standard for neutrality and reasonableness, which engineers can read the specs for?"

And it's true, it's damned hard to codify "political" policies in the form of strict technical specs and metrics. I tend to use terms such as "not differentiating Internet packets based on stated or inferred application" although Twitter is hardly the platform for detailed nuance.

But then Tim Panton dropped in a great suggestion "Doctors have a 'do no harm' rule which then needs practical interpretation in specific circumstances".

In other words, medical practitioners have an over-riding statement of "ethical principle". As it happens, the precise phrase "do no harm" is a relatively modern interpretation of a much older promise called the Hippocratic Oath. It's an interesting read, and the parallels in terms of Internet are quite pertinent:
  • "I will take care that they suffer no hurt or damage"
  • "Whatsoever house I may enter, my visit shall be for the convenience and advantage of the patient"
  • "Whatever, in the course of my practice, I may see or hear (even when not invited), whatever I may happen to obtain knowledge of, if it be not proper to repeat it, I will keep sacred and secret"
In response - and, amazingly, according to Google I appear to be the first to use the term - I suggested that maybe ISPs' execs and network engineers should be forced to swear an "IPocratic Oath" if they want to practice offering Internet services.

Initially, I just thought that was an amusing snappy comeback. But actually, I'm wondering if maybe we're at a similar point to medical practice, where the Internet has become so complex that framing laws in a way that relates to the intricate operations involved is impossible. The impasse at the FCC, and the weird wording in the revise EU Draft legislation seems to suggest this.

Instead, perhaps having an affirmation of "good intentions" - with serious sanctions available if an individual or company is found guilty of transgressing them - is an interesting possible compromise. Truly believe your "specialised services" are really "special" and not merely an anti-competitive ruse? So swear a sincere IPocratic Oath first, and put your career or telco licence on the line...

It could be a neat way to allow genuine innovation and clever use of managed network services - say, realtime monitoring of heart pacemakers needing QoS - while outlawing negative practices like blocking/degrading services ISPs don't like, or trying to subvert existing Internet competition & meritocracy by allowing "fast lane" access in discriminatory fashion. In other words, it introduces the concept of "Ethical QoS" (or "Ethical Zero-Rating & App-based charging").

Yes, I realise this is completely fanciful, and probably impractical & unenforceable. But at the very least it's a useful thought experiment, and, I reckon, a really good pun. I'd love people to contribute possible drafts in the comments, though - who knows, maybe I've stumbled on something?

(And if you haven't already noticed, I have a much more hard-nosed analysis of net neutrality/non-neutrality in this report on mobile broadband business models. Please inquire for details on the forecasts & analysis, or if you're interested in any other form of engagement around this field).

Thursday, October 02, 2014

New WebRTC Analyst Report & Forecasts published: Towards 6bn devices & 2bn users


I've now completed & published the updated 2014 version of the Disruptive Analysis WebRTC Industry Status & Forecasts Report. I believe that it is the most detailed research-company study on WebRTC available, based on ongoing primary research, extensive quantitative market modelling and a thorough investigation of as many use-cases as possible.
  • WebRTC “Democratises” realtime comms from specialists to a broader developer base
  • Use cases in many sectors: telecoms, consumer web, enterprise comms, M2M etc
  • One of the most disruptive & important web/telecoms innovations for 10 years
  • 6+ billion capable devices, and c2 billion individual users of WebRTC by end-2019
  • Evolving from original browser-based standard to richer “comms philosophy”
  • Smartphone & tablet capability for WebRTC starting to ramp up strongly
  • Pivotal role for new tier of cloud platform / API players. Also open-source critical
  • Microsoft involvement in new ORTC standard a good sign. Apple still MIA
  • “Headline acts” like Amazon, Amex, Snapchat, Google catalysing wider interest
  • Early use-cases for customer care, web calling, conferencing & some verticals
  • Enterprise will see WebRTC in both unified and “dis-unified” comms contexts
  • Telcos/SPs getting more serious. 10+ service launches, but IMS integration slow
  • Magnifies the “OTT” threat for telcos, but also eases Telco-OTT innovation
  • Numerous “gateway” sub-types for vendors to target, but moving to XaaS models
  • Monetisation of WebRTC will be heavily use-case dependent
  • Still some impatience with pace of development – but a lot happening below surface
  • As in 2013, Disruptive Analysis believes the hype is still justified
To order, see base of this page

To give some background - I've been watching WebRTC since its inception in mid-2011. I've advised numerous market participants on WebRTC specifically, and the broader Future of Voice/Video for a long time prior to its arrival; I'm also a regular figure at industry conferences & webinars covering the technology in Europe, North America and Asia. I was recently annointed as a "WebRTC Pioneer" by the guys at TMC (thanks!)

The first edition of the report, published in February 2013, set the standard for forecasts, with data ("4bn devices by 2016") used almost ubiquitously across the industry. 

Since then, much has changed. 2013 and 2014 have seen huge evolution. In particular, it has evolved from a “purist” web- and browser-centric standard, to one that has broadened to integrate with established communications systems, as well as being embedded directly into mobile apps and M2M devices. While its deployment varies in pace by sector, it is now applicable to so many different areas and use-cases that delay in any one context cannot derail the overall proposition.
Looking towards 2015, Disruptive Analysis sees the picture evolving again. WebRTC-based capabilities will crop up in day-to-day websites, as well as dedicated platforms for businesses or telecom verticals. New formats will also emerge, including integration with cable set-top boxes for interactive TV-based usage, or various other M2M and data-connectivity variants.  
The all-new 190-page report extends it the original analysis considerably. It covers all the key WebRTC use-cases & companies within:
  • Enterprise communications
  • Telecom service providers & cable
  • Consumer web & mobile apps
  • M2M &IoT
  • Cloud platforms & APIs

The report contains the most detailed & comprehensive forecasts on WebRTC adoption available from any analyst firm:
  • WebRTC-capable device numbers, by PC/phone/tablet/M2M & geographic region
  • Consumer WebRTC users for standalone & embedded voice/video
  • Business WebRTC users for contact centres, UC and app-embedded communications
  • Telco WebRTC users for VoIP/VoLTE extension, Telco-OTT services & cable/IPTV
  • M2M/IoT estimates for WebRTC integration


The report has detailed qualitative analysis & many examples of use-cases, live deployed services and lists of vendors in all the key areas. It covers the critical strategic issues facing WebRTC (standards, browser support, business models, regulation etc) and provides actionable recommendations for the main stakeholder groups. It also has full background information on market drivers such as telcos vs. OTT, enterprise BYOx trends, and the emergence of WebRTC cloud and platform providers.


The report is 190 pages in length and contains over 100 charts, tables and graphics.



It is available either as a one-off report, or as a subscription with two interim updates of c25 pages length, scheduled for publication in Dec/Jan and Apr/May timeframes. 

Pricing of the report is as follows:
  • 1-3 user licence: US$1700 for main report, $2500 with 2x interim updates
  • Corporate licence: US$2500 for main report, $3700 with 2x interim updates
Payment can be made by credit card, Paypal or bank transfer - see the end of this page for online purchasing, or email information AT disruptive-analysis DOT com to order via PO/invoice, or request further information. 

Please also get in touch if you are interested in internal workshops, custom advisory projects or speaking engagements about WebRTC.

CONTENTS


Executive Summary and Recommendations
  Strategic issues
  What has changed since 2013?
  Use cases & market segment
    Platforms & cloud APIs
    Enterprise
    Telecoms operators
    Consumer web & apps
    M2M & IoT
  Device support forecasts
  WebRTC adoption forecasts
     Enterprise/Telecom/Consumer

  WebRTC industry timeline 2014-2019
  Companies & vendors
  Recommendations
    For web & app developers
    For telecom operators
    For enterprise IT & telecom end-users & suppliers
    For network vendors & cloud platforms
    For VoIP, video & messaging providers
    For industry bodies & regulators
    For investors & consultants 

Strategic Issues for WebRTC in 2014/15

  What is WebRTC & why is it important?
  WebRTC standards evolution
    Roles of IETF, W3C & others
    ORTC
  Mainstream developer awareness & adoption
  The battle for the soul of WebRTC: Beyond the Browser
  Value-chain Richness & “The WebRTC Ecosystem”
  The Emergence of Mobile WebRTC
  Participation of key players
     Apple & WebRTC
     Microsoft, WebRTC and ORTC
     Where are the OTTs?
  Usability and interaction design
  The mix of WebRTC voice, video and data
  Regulatory considerations
  Evolving attitudes to interoperability
  Regional differences within WebRTC
  New monetisation and business models          


WebRTC Device Support Forecasts
  Introduction
  PC support of WebRTC
  Smartphone support of WebRTC
  Tablet support of WebRTC
  TV & M2M/IoT support of WebRTC
  Summary            


WebRTC Platforms, Gateways, Tools & APIs
  Introduction
  What is needed to develop and launch a WebRTC service?
  Market categorisation & vendor/PaaS fragmentation
  Platform use-cases & differentiating dimensions
  What to develop in-house, what to outsource?
  Platform/API providers: industry dynamics
  WebRTC Platforms/APIs conclusions & predictions
    Overview
    Solutions-oriented platforms
    Distribution channels for WebRTC platforms & APIs
    WebRTC platform interoperability?

 WebRTC & Enterprise Communications
  WebRTC for business: The Big Picture
    The strategic “Great Game”
    Introduction to WebRTC in enterprise
    Beyond UC: The emergence of enterprise WebRTC frameworks
    Background: General trends in enterprise communications
    CEBP revisited
  Contact centres & customer support / interaction
    Contact centres & customer interaction: Key background issues and trends
    Customer interaction: WebRTC use-cases, roles and adoption drivers
    Amazon Mayday as a Catalyst
    Growth of multi-channel & web live-chat
    Customer interaction: WebRTC deployment
    Contact centre outsourcing
    Customer interaction: WebRTC vendor strategies
  B2B Conferencing
    Conferencing: Key background issues and trends
    Conferencing: WebRTC use-cases, roles and adoption drivers
    Conferencing: WebRTC challenges and limitations
    Conferencing: WebRTC vendor strategies
  Unified communications, IP-PBXs & collaboration
    Overview 
    UC defined: Key background issues and trends
    UC: WebRTC use-cases, roles and adoption drivers
    UC: WebRTC challenges and limitations
    UC: WebRTC vendor strategies
  Application-embedded WebRTC
  Enterprise WebRTC adoption & forecasts
    Overview
    Business demographics
    Adoption of WebRTC in UC, collaboration & business apps
    Contact centre adoption of WebRTC
    Sensitivities

WebRTC & Telecom Service Providers
  Introduction & overview
  Key background trends for telcos & SPs
    Ubiquitous broadband driving all-IP communications: 4G, 5G, fibre, cable
    Service innovation, strategic direction & telco organisation
    Network-based services innovation vs. Non-network
    The “OTT model”: Decoupling access from service
    Network & OSS evolution: NFV & SDN
    “Peak Telephony” and the importance of “intent” for communications
    Fragmentation of communications – is “disunified comms” the real trend?
  Telcos’ current involvement with WebRTC
    Overview of WebRTC service segments & business models
    Telco network & IMS/VoLTE/RCS extension
    The extension strategy
    WebRTC & VoIP/VoLTE extension
    Developer IMS/WebRTC APIs
    WebRTC standards evolution for telcos
    WebRTC to extend RCS / joyn
    TV & cable integration of WebRTC
    Non-mainstream communications service providers
  Non-integrated Telco WebRTC
    Build vs. buy vs. resell vs. acquire etc.
    Massmarket telco-OTT VoIP & video-call services
    WebRTC + telco developer / API initiatives
    Enterprise & cloud
    Digital Home services
    Internal uses for WebRTC at telcos
    Investment, incubation etc
 Carrier-focused vendor landscape
    Telecom WebRTC adoption & forecasts
    VoIP/VoLTE+WebRTC forecasts
    Telco-OTT VoIP/video WebRTC forecasts
    Cable/IPTV WebRTC forecasts
 Summary

 WebRTC & Consumer Web & Apps
  General drivers and inhibitors for consumer WebRTC
  Mobile WebRTC Apps
  Video Chat & General Communications
  Social Networking & Messaging
  Games, Entertainment, Music & Media
  Personal Productivity, Tuition & Online Life
  Dating & Adult
  Advertising
  Consumer WebRTC adoption & forecasts 
    Standalone consumer WebRTC VoIP/video forecasts
    Embedded consumer WebRTC forecasts

 WebRTC, Data, IoT & Emerging Use-Cases
  DataChannel evolution
  M2M / IoT
  Emergency Communications & Public Safety
  Forecasts for M2M/IOT & WebRTC 

About Disruptive Analysis            


ORDERING

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  • VAT details / payment for UK/EU purchases
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WebRTC Report, 1-3 users



WebRTC Report, Corporate Licence

Friday, September 26, 2014

Next Monday: WebRTC Webinars + WebRTC Report Published


Next Monday, 29th September, I'm participating in two webinars organised by Upperside Conferences, who also run the annual European WebRTC event in Paris in December. One is timed for Europe & Asia, the other for Europe (late) and the Americas.

Sign up HERE.

They're free, and they focus on the business implications of WebRTC for telcos and other service providers. I'll also be giving some background thoughts on trends in voice & video comms, as well as taking Q&A alongside Amir Zmora, my co-host and convener.

I'll review service provider innovation strategy, operational challenges and monetization opportunities. The two sessions will cover topics such as:
  • What WebRTC services have already been launched by telcos? What lessons can be learned?
  • Which group(s) within a carrier should be involved with WebRTC?
  • Should services be consumer-, enterprise- or developer-focused?
  • What are the benefits & downsides of WebRTC services integrated with existing offers/platforms, vs. new and standalone?
  • How should regulatory or competitive issues be considered?
  • Does WebRTC risk cannibalisation of existing revenue streams?
NEW 2014 REPORT NOW PUBLISHED - DETAILS HERE

I'm also going to be (finally!) publishing my 2014 WebRTC report on Monday, as trailed in this blog post and this pre-launch description & contents page. As well as an update of the widely-used "devices supporting WebRTC" forecast, I'm also including estimates of the active user-base for telco, consumer web & enterprise WebRTC use-cases. It will, once again, be the most broad and comprehensive analysis of the WebRTC market, covering the whole industry from platform players to IoT/M2M. Watch this space for details, or contact information AT disruptive-analysis DOT com to pre-order.

Lastly, I'll be at a few other events in coming weeks if you want to talk about WebRTC, mobile broadband or other topics:

IIR Telecom APIs - London 7-9th October
The Hague Telecom - The Hague 15th October (covering mobile & smart cities)
Great Telco Debate - London 7th November 
TADSummit, Istanbul November 12-13
WebRTC Expo, Santa Clara, November 18-20 

I'm also doing a variety of in-house workshops & advisory projects for telcos & vendors on WebRTC at the moment. Please get in touch if you need external input for your planning or events / off-site strategy sessions.