to make an impact. The market is changing faster than the RCS specs can be updated. And based on a video demo of the planned RCS functionality that I saw, it doesn’t look much different than what I can do with the Android handset that I have today.
The Cloud is now mainstream… and it won’t be free
A few years ago at MWC, NewBay talked about the “content cloud” and most people had to go back to their rooms to look it up on Wikipedia. Since then, “cloud” has evolved to include many things – content in the cloud, cloud services, cloud computing, etc.
I’d say we’ve now reached the apex of the cloud “hype cycle,” as Gartner so eloquently put it years ago. There are an unsustainable number of companies moving forward with cloud initiatives and just a few of them will be successful. We’ve seen several consumer content cloud services/companies launched in the last few years and then disappear shortly afterwards. But now there seems to be a growing realization that the ad-supported model doesn’t always work for these services, and they need to get paid in order to survive.
In that context, Mozy’s announcement that it is dropping its unlimited back-up service in favor of a paid, tiered model should come as no surprise. As we all learned from the Internet boom of the 1990s, the era of “free” can only last for so long. Eventually start-ups either burn though all their funding or established companies burn through so much cash that it starts to impact their financial results. In much the same way, a new era of higher value, cloud-based content services is here.
The road ahead for operators
Operators have to realize that they are no longer the center of the universe, but that doesn’t mean they have to settle for being a ‘pipe’ provider. Though Nokia-Microsoft have anointed themselves the “third ecosystem,” I believe the third ecosystem could actually be operators and their partners. Operators can position themselves at the center of an ecosystem of different types of companies including social networks, premium content providers, advertising firms, etc. Operators own the network, and most importantly, have a billing relationship with the subscriber. Instead of trying to “own” the subscriber, they should be looking for ways to get a piece of the action that they’ve thus far ceded to the platform players like Amazon, Apple, Google and other new entrants. For example, they could:
• Store all user content in an online digital vault and charge a subscription fee for this service
• Make it easy for users to upload, download, stream and share user content with social networks, friends & family – driving bandwidth usage and moving subscribers up a tier on their data plans
• Finally start to leverage metadata for analytics and business intelligences to serve up targeted ads (like Google), sell relevant premium content (like Apple) and to cross promote additional services (like Amazon)
Based on internal calculations, I show that operators could be missing out on an average of at least $15-$20 a month in incremental revenue per subscriber. That represents a 20-30 percent increase in revenues for most tier-1 operators, and more so for others.
We are in an era of phenomenal innovation in the communications space. If I took anything from MWC it’s that the windows of opportunity for success open and close quickly. In this market big companies can be broken by missing just a single trend or technology cycle and new stars are made riding these new trends. This is not the place for the weak nor those who want to get by on cruise control. This is the place that the best come to test their skills.
