Highlights of TiECon2012 Mobile Sessions-Part 1: mobile operators, emerging trends, applications and opportunities

Introduction

One of the highlights of TiECon2012 (The Indus Entrepreneurs annual conference- May 18-19th in Santa Clara, CA) was the Mobile Track.  All important aspects of the mobile ecosystem, its present status and future directions were explored in depth during three TiECon mobile track panel sessions:

  • What are the emerging trends, applications and opportunities in mobile?
  • Considerations for deploying mobile in the enterprise and vertical industry apps.
  • How to distribute and monetize your mobile app?

There was also a TiECon panel session on social gaming that was very much mobile related. For example, who will be the Zynga of mobile? What’s the intersection of mobile and social? Who will control the mobile platform?

We’ve previously provided a preview of the first mobile panel session on market status, trends and opportunities.

In this article, we report the highlights of that first mobile panel session. The other three related mobile sessions will be described in the second part (II) of this article.

Mobile Panel #1: What are emerging trends, apps and opportunities in mobile?

Session Organizer & Moderator:

  • Raj Singh, CEO, Tempo AI

Speakers:

  • Matthew Howard, General Partner, Norwest Venture Partners
  • Erik Ekudden, Vice President, Head of Technology Strategies, Ericsson
  • Anil K Doradla, Research Analyst, William Blair & Company, L.L.C.
  • Lars Kamp, Strategy & Corporate Development, Accenture Mobility Services
  • Ben Riga, Senior Technical Evangelist for Windows Phone 7, Microsoft

Panel participants first debated the role of the mobile network operator, who this author believes is between a rock and a hard place. Operators have to subsidize smart phones and upgrade the capacity of their networks to accommodate the spectacular increases in mobile data traffic. But they are not generating any revenues from premium services or value added offerings that make use of the increased bandwidth they must provide to their data plan subscribers. Here are a few take-aways:

  • Matt Howard: Mobile operator opportunities are in enterprise apps and managed services. They’ve lost the consumer app and app store business.
  • Anil Doradla: Operators are only getting increased revenues from data plans with higher priced tiers.  Currently the mobile operator has been reduced to a dumb bit pipe provider, but the jury is still out as to whether operators will  continue as such (or provide value added services, share in mobile ecosystem monetization).
  • Ben Riga:  Mobile has become a global platform, but operators don’t have the necessary information (location, customer preferences, etc) to do target marketing.
  • Lars Kamp:  Mobile Operator business depends on the country and their business objectives.  Over-the-top  (OTTP) content is a severe problem for operators, because they have to carry that high bandwidth data/video content but don’t get any revenue from doing so.
  • Erik Ekudden:  To ensure a good user experience, operators need to upgrade mobile network capacity; else the network will be a bottleneck (in many cases, it already is, e.g. AT&T’s 3G network).

The next area of discussion was Mobile Apps, App Discovery and App Stores. Here were the key panelist comments:

  • New challenges and opportunities are emerging, especially with bigger screen sizes on mobile devices.
  • There are different ways to monetize apps. What role will each of these play: analytics? CRM? Tracking user preferences? Location Based advertising? Virtual goods? On line gaming?  Lots of questions, but few answers.
  • The use of embedded performance analytics to get insights into the user was considered essential to success of properly monetizing apps.
  • Securing ongoing subscription fees to replace one-off download sales was seen as a challenge, even for mobile gaming leaders like Zynga.
  • Anil was bearish on the app store business model. The low barrier to entry encourages many app developers, but only a small minority succeed. The key players are Apple and Samsung who have 55% market share of mobile devices. So a developer needs to get the app on those app store platforms.
  • Anil said that enterprise centric apps have more potential than consumer apps (we definitely agree).
  • Erik opined that apps which require QoS support are critical to creating a great user experience. That implies premium real time apps that operators haven’t figured out how to charge for.
  • Mobile app discovery was seen as a critical issue, as apps are not indexed in app stores and can’t be easily found by potential users.
  • Ben said that getting visibility for the “right set of apps” is important. He suggested integration of app discovery into mobile search.
  • A directory to navigate apps will be a complex piece of software. It might have to take into account data sharing between apps.
  • The challenge of ‘app discovery’ across many platforms seems to be a throwback to the early days of the Internet – before website discovery was solved by Google (and other) search engines.
  • Anil pointed out the “duopoly” of Apple and Samsung causes most apps to be developed for their platforms (iOS and Android, respectively). So it is the apps for those two platforms that most need to be discovered.
  • Many customers are writing their own apps which are more personalized and are inherently discovered.
  • Consumers have an inalienable right to privacy, but there are “trust issues” with app stores that maintain user profiles. Might personal information be used for app discovery, as it is now for “personal web searches?”

Moderator Raj Singh next asked, “Is HTML5 becoming a parallel mobile web?” He explained that HTML5 and the hybrid web/native model is what is being most adopted by app developers. For example, the use of HTML5 for the front-end of the app, but wrapping it as a native app (like the LinkedIn Mobile app).  Ben said that HTML5 is the direction we’re all headed, but neither he nor any of the panelists were specific on its forthcoming role in mobile apps or mobile platform development.  An audience member and panelist were debating if future mobile web apps would be based on HTML5.  While no one denied that, there were no predictions on how long it might take.

Raj continued:  To what extent is the Apple-Samsung duopoly driving the mobile ecosystem and user choice? What platforms and device makers will be viable in the future?

  • Matt strongly believes it’s all about software, which determines gross margins.
  • Ben stated that “Android market fragmentation (multiple types of smart phones from different makers) is driving app developers to the Windows Phone platform.
  • Anil was bullish on Windows Phone. “The new Windows Mobile is a great product. I’m optimistic it will succeed as a 3rd platform (mobile OS).”
  • Lars noted that mobile phones are still the world’s biggest distribution platform with an average one year replacement cycle for smart phones. Apple will ship 100M iPhones this year alone!
  • Anil divided the mobile device makers into 3 groups:  Iconic leaders – 1) Apple (especially with consumers) ; 2) Fast Followers-  Samsung, LG, HTC; and 3) Strategically handicapped- HP (Palm), Nokia, RIM.
  • Erik opined that there would be new types of mobile/ wireless devices for M2M communications, such as for use in home automation, security, and energy management systems.

Raj questioned the commercial success of mobile payments, especially using highly touted NFC technology. 

  • Matt said it all depends on Apple’s support (of embedded NFC and mobile payments) in its iPhones. 
  • Anil took a bearish view, citing too many different players involved in the mobile payments ecosystem (operators, handset makers, Visa & other credit/ debit card companies, banks, and app developers). All would have to use an integrated mobile payments system which doesn’t exist yet. 
  • Summing up, Raj told this author, “Once the mobile wallet system is figured out things may change, but the mobile billing  may continue to be problematic.”   Security was also seen as a critical issue for mobile payments

Raj asked if Amazon would be relevant in the “App Store universe?

  • Lars said he was bearish on 3rd party app stores (as Amazon’s would be). But he was bullish on enterprise app stores, presumably from 3rd parties.

Looking to the future of mobile markets………..

  • Matt said that Norwest had invested in mobile health related start-ups. 2% of global GDP is coming from mobile health and that number is growing.
  • Lars opined, “tons of innovation will come from VC backed mobile start-ups.”
  • Ben was very optimistic on personal wireless sensors, but time for this session ran out before he could elaborate.

Editors Note:  Part II of this article will cover Mobile Enterprise deployment issues as well as Mobile App Monetization and Social/mobile Gaming.

Cloud Computing Issues: State of the Net West Conference – August 6, 2008, Santa Clara, CA

Abstract

This conference, sponsored by the Congressional Internet Caucus Advisory Committee, has become the "go-to" event for Internet policy makers and observers. To meet the needs of our readers, we are restricting coverage to a single session dealing with Cloud Computing. In particular, we focus on legal and privacy issues associated with "The Movement of Information from the Crowd to the Cloud."

While Cloud Computing has recently gotten a lot of publicity from big name players like IBM, ATT, Amazon and Google, little attention has been devoted to security and privacy concerns, especially protection of client data and meta-data (information about the data) from unauthorized entities. This panel zero’d in on exactly that topic. The three panel participants were:

  • David Schellhase, Senior VP/General Counsel, salesforce.com Inc
  • James X. Dempsey, Vice President for Public Policy, Center for Democracy and Technology
  • Matthew Parrella, Assistant District Attorney, U.S. Department of Justice

Background

There is a lot of confusion as to what Cloud Computing really is. One panelist thought that the Wikipedia definition was a bit too all encompasing. But he quoted the first three paragraphs anyway:

"Cloud computing means Internet (‘Cloud’) based development and use of computer technology (‘Computing’). It is a style of computing where IT-related capabilities are provided "as a service"[1], allowing users to access technology-enabled services "in the cloud"[2] without knowledge of, expertise with, or control over the technology infrastructure that supports them[3]. It is a general concept that incorporates software as a service, Web 2.0 and other recent, well-known technology trends, where the common theme is reliance on the Internet for satisfying the computing needs of the users. For example, Google Apps provides common business applications online that are accessed from a web browser, while the software and data is stored on the servers.

Cloud computing is often confused with grid computing (a form of distributed computing whereby a "super and virtual computer" is composed of a cluster of networked, loosely-coupled computers, acting in concert to perform very large tasks), utility computing (the packaging of computing resources, such as computation and storage, as a metered service similar to a traditional public utility such as electricity) and autonomic computing (computer systems capable of self-management)[4]. Indeed many cloud computing deployments are today powered by grids, have autonomic characteristics and are billed like utilities, but cloud computing is rather a natural next step from the grid-utility model[5]. Some successful cloud architectures have little or no centralised infrastructure or billing systems whatsoever including Peer to peer networks like BitTorrent and Skype and Volunteer computing like SETI.

The majority of cloud computing infrastructure currently consists of reliable services delivered through next-generation data centers that are built on compute and storage virtualization technologies. The services are accessible anywhere in the world, with The Cloud appearing as a single point of access for all the computing needs of consumers. Commercial offerings need to meet the quality of service requirements of customers and typically offer service level agreements[6]. Open standards and open source software are also critical to the growth of cloud computing[7]."

http://en.wikipedia.org/wiki/Cloud_computing

IBM refers to cloud computing as an emerging approach to shared computing infrastructure. Results are computed in a data center (seen as "being in the cloud" by users) and returned over one or more Internet connections. Users are not generally aware of the underlying technologies or rules governing the flow of data within the cloud. Others believe that cloud computing is a broader concept- any 3rd party computing or storage service, with the Internet as the backbone. All panelists agreed that cloud computing employs a shared services model.

Cloud computing was seen as being an integral part of the inexorable redirection of technology from local use to the net. Storage and services occur in the network, rather then at desktops or laptop PCs. Cloud computing dramatically lowers the cost of storage to the user (by taking advantage of cheap and voluminous network storage).

We were surprised to hear that Dell has applied for a trademark on the term Cloud Computing.

http://www.dell.com/content/topics/global.aspx/sitelets/solutions/cluster_grid/cloud_optimization?c=us&cs=OWR08&l=en&s=bsd

Key User Concerns with Cloud Computing

One panelist suggested there were three drawbacks to cloud computing (with my questions in paranthesis):

1. Users pay a fee (isn’t it normal to charge for a service?)

2. Users lose control over services (isn’t this always the case with outsourcing?)

3. Loss of privacy of data and meta-data (isn’t a privacy statement and contract necessary?)

Many questions arise regarding regulation, security and privacy:

  • Should this new industry be regulated? If so, in what way?
  • Who (besides the client company) should have access to the data/ meta-data/ results of computations?
  • When and under what circumstances should notice be given to the client that law enforcement (or any government agency) seeks or is given access to the data? In particular, can the U.S. Patriot Act be invoked to commandeer data from a company suspected of aiding and abetting a terrorist organization?
  • What privacy protection will be offered cloud computing client companies? How will the integrity of their data be preserved? Can it be adequately covered in a contract or service level agreement?

One panelist stated that privacy protection falls off when data is stored in the network. If it is exposed to public view, the data will not be protected at all. What about data in transit- is it protected? User concerns here include terrorism, identity threats and on-line fraud/ scams. A big concern of one audience member was that Cloud Computing service providers would hand over customer stored data/ usage patterns to govt agencies who had not obtained proper authority. Justified under "Patriot Act" but compromising privacy and integrity of data.

According to the DA panelist, "there is a crazy quilt of laws governing privacy of network stored data and that has become a major issue effecting individual (and company) rights." He stated there was a movement away from hacking and copyright infringement and into industrial espionage- the theft of trade secrets. The concern was that cloud computing service providers might not have robust security practices in place to prevent that. In other words, they might not be able to honor the customer contract that protects Intellectual Property/ trade secrets from others. (See last paragraph for a different opinion).

A crucial concern is who can have access to (proprietary) company data stored in the network? Not just third parties (including government agencies and police forces), but any and all Data Base and System Administrators who hold "the keys to the kingdom." Those insiders could pose a threat if they are recruited by an entity practicing industrial espionage (including foreign governments). But that seems to be an internal security matter, under the jurisdiction of the client company, rather then the cloud computing service provider. Key question is what procedures does the provider have in place for authentication, authorization, and administration of user requests? Are these being standardized?

One panelist took an optimistic view, stating that the cloud computing service provider would do a better job of security then the client company. Since it was responsible for security management and privacy protection of many client companies, the provider must have a very robust and comprehensive security system in place to be a viable entity. If it didn’t, it would go out of business very quickly, independent of its price or performance. Hence, the provider would be able to adequately protect client IP as per the service contract, according to this panelist.

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Addendum: IBM invests Nearly $400 Million on Cloud Computing Centers in U.S. and Japan

"We consider cloud computing to be the model that can fundamentally change the current IT market structure and create paradigm shifts," said Yutaka Miyabe, director of system research and development center, NS Solutions Corporation.

http://www-03.ibm.com/press/us/en/pressrelease/24788.wss

"Cloud computing is fundamentally about re-engineering the world’s computing infrastructure, to enable game-changing — even life-changing — applications. To IBM, cloud computing is much more than the normal evolution of a data center," said Willy Chiu, Vice President, IBM High Performance On Demand Solutions.