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SDP 2.0 and Web 2.0
SDP in the Web 2.0 Era
Web 2.0 An Architecture of Participation
Web 2.0 is a term first used at an O’Reilly Media conference in 2004. The term was deliberately designed to herald a new, emergent era on the Web after the recession and crash of the dotcom period. True to its roots as a media invention, ‘Web 2.0’ has been a widely hyped term. It has had no technical or standardized definition – it was rather a new vision of the way developers and end-users might interact with and use the World Wide Web.
Essentially, Web 2.0 highlights two key features of the Internet and the Web. First, the massive expansion of connectivity enabled by the Internet and second, the exponential increase in modes of communication and social interactions and activities allowed by the Web.
According to Eric Schmidt, CEO of Google, Web 2.0 can be viewed as an approach to building applications and services around the unique features of the Internet. This is summed up in Google’s motto: Don’t fight the Internet, i.e. don’t try to build applications and business models and force them to fit the Internet. Rather find applications and services which leverage the power of the Internet. This approach can be defined as the essence of Web 2.0.
Three key Internet and Web 2.0 features are 1) the phenomenon of the ‘long tail’, i.e. the ability to find, harness and meaningfully use even the smallest units of data and 2) the opportunity for large numbers of widely dispersed individuals to communicate online and contribute content and data to Websites, 3) the capability to harness network effects, to geometrically increase the value of Web-based human networks as a function of the number of users.
For example, the first two unique Internet phenomena, combined with network effects, have given rise to the exponential expansion of social networking sites. Social networking is the quintessential Web 2.0 activity. It leverages unique Web features and has driven a new set of applications and services that reflect an underlying human need to communicate, socialize with, learn from and influence other humans.
Web 2.0 sites – technologies and applications
Web 1.0 websites can be defined as read-only, brochure-like websites enabling mostly one-way communication. In contrast, the key focus of Web 2.0 websites is on interactivity between users and providers. Web 2.0 sites allow users to generate, freely distribute and share content. And the owners of the sites can derive an economic benefit, as users engage in a wide range of activities from e-commerce to networking to socializing to game playing - all online. To achieve this, Web 2.0 sites employ a whole range of technologies such as blogs, wikis, podcasts, RSS feeds, social software, and open APIs.
Web 2.0 Key players and on-line resources
Pure Web 2.0 companies only exist on the Internet and leverage the unique features of Web 2.0 network effects combined with large-scale, human interaction. Leveraging network effects, the power and effectiveness of these businesses grows in geometric proportion to the number of people using their services and applications. eBay, Wikipedia, del.icio.us, and Skype are good examples. Other examples such as Flickr and YouTube grow in power and effectiveness as more people share videos and photos. Note, that in both these cases, the community-generated tag database is the key asset that adds unique value that cannot be easily duplicated online or offline.
Web 2.0 developers, Open Source and Perpetual Beta
The ability of the Web to harness the combined power of thousands of distributed and dispersed developers has lead to a set of Web 2.0 technologies with set of characteristics that are quite different from those associated with traditional software development. The nature of distributed collaboration necessarily promotes ‘open source’, ‘agile’ development processes, where the traditional software adoption cycle is replaced with the concept of ‘perpetual beta’.
Rich-Internet application techniques such as AJAX, Adobe Flash, Flex, Java, Silverlight and Curl have evolved to improve the user-experience in browser-based applications. Web 2.0 applications rely extensively on back-end software. These new Web services need more powerful databases and workflow support, and have evolved to match the intranet functionality of an application server.
Web 2.0 ‘killer app’ – Social and Professional Networking
Social networking can be defined as a software-driven, online, web-based activity where users have profiles and interact with one another in various ways via links, messages, invitations, discussions, and sharing videos, photos, and music etc. Some social networking sites have additional features, such as the ability to create groups that share common interests or affiliations, and hold discussions in forums. Many have directories of categories (such as former classmates), and introduction systems linked to trust and personal recommendation.
Web 2.0 has also seen the rise of professional ‘social networks’ that are more industry focused and vertically segmented. These specialized professional networks are an online automation of existing, real life professional networking behaviour. The top three professional networking sites LinkedIn, Xing, Spoke reach more than 70 million professionals between them across multiple industries.
These sites have the potential to deliver multiple levels of value including: sharing ideas and information, making recommendations, building reputation and relationships, creating circles of trust and managing multiple long distance and long term relationships.
The wisdom of crowds – harnessing collective intelligence
A central thesis of the Cluetrain Manifesto; Locke, Searls, Weinberger (1999) is the insight is that ‘markets are conversations’ and that the internet has enabled radically new conversations among human beings that were not possible in previous eras. These networked conversations drive new forms of social organization and knowledge exchange. This theme is reinforced in The Wisdom of Crowds; Surowiecki (2004), where the idea that aggregation of information in groups, results in decisions that are better than could have been made by any single member of the group.
The Web 2.0 phenomenon draws extensively on theses ideas. Today the tools, concepts and ideas for quickly and easily building networked conversations and opinion forming aggregation mechanisms are proliferating. Social bookmarking sites such as Delicious, Reddit and Digg provide content recommendation through aggregating private tagging behaviour and employing rating algorithms based on user recommendations.
As a consequence, they also help create and build personal networks and communities of interest, where users can discover experts or people with similar interests. For example, user A connects with user B simply by searching for other site users who have tagged similar words, interests, topics, and technologies. Both users can easily review the others tags and so automatically learn and benefit in a serendipitous fashion from each others tagged content selections. Furthermore, if they have rated those content selections, each user can test and review the content and then make a personal judgment about the quality of the rating.
As in real life, people who continually produce high quality ratings, grow in respect and trust. In this way (as in evolutionary natural selection) the best raters of content will be positively selected by the environment of users. This becomes a very powerful network effect when replicated over many users. As a result, the collective intelligence of the ‘wisdom of the crowd’ drives the best and most popular content to the top, while at the same time, dropping poor or unpopular content out of sight.
Web 2.0, why should operators care?
So what relevance does Web 2.0 has for operators in general, and specifically what lessons can operators learn in the deployment of SDP. In short, why should operators care about SDP 2.0?
For years the telecom industry has focused on creating new services. On the whole, most have failed to be a commercial success. Voice and messaging remains, in essence, the mainstay of the mobile operators, and fixed line carriers rely on a set of IN services based around voice.
Today, service innovation in the telecom domain has reached an impasse. With the exception of the work being done in mobile terminal space, most of the exciting new developments are happening on the Internet and Web. And most of the innovation and talent is on that side of the street.
One of the reasons is that most young developers are simply not interested in developing services on call control. Furthermore, messaging is seen as a “tired, old” interface. Young developers prefer to develop new apps on Skype, Facebook or Twitter or a host of other Web 2.0 services. This is far more rewarding than developing on top of an operator’s platform.
Is Web 2.0 a threat to Telecom?
According to the recent Moriana market research most operators today, while interested in Web 2.0, do not view it as a threat to their business. Less than 20% of respondents admit that Web 2.0 poses an important threat and only 32% think it will become a threat in the 5-year perspective. Google and Skype are most often seen as the main “dangers”. Other services such as Facebook or MSN are not seen as a problem.
Over 75% respondents still see leading carriers, global mobile operators and new dynamic service providers as the main worry in the coming 3 to 5 years. Not surprisingly only less than 10% of service providers have developed any sort of Web 2.0 strategy.
It should be noted, that to date the Internet-based communication services such as e-mail, Instant Messaging, Skype, Google-Talk, etc. have had only a marginal effect on carriers’ and mobile operators’ revenues. On the other hand, the cable operators have lost billions of dollars in advertising revenue to the on-line businesses including Web 2.0 players. Google is of course the classic example.
How operators can benefit from Web 2.0
What operators can learn from Web 2.0
The operators surveyed by Moriana say that Web 2.0 can teach them how to:
• create efficient service delivery environments
• encourage users to be service developers
• use viral marketing for new services
• use advertising to offer free services
• monetize user-generated content
Over 60% of the respondents believe that operators could benefit by adopting Web 2.0 concepts such as Open APIs for 3rd party application development, user generated content and social networking. About half see content sharing and service mash-ups as important, and one fourth believe in contextual advertising and P2P services.
SDP 2.0 – Converging Telecom with Web 2.0
It is now clear that one of the central goals of SDP 2.0 should be to bridge telecom with Web 2.0. Both worlds have a lot to offer end users. The value propositions are different, but it is the success of on-line world that today has captured user attention and generates billons of dollars in revenue from premium services, retail and advertising.
Operators can learn from on-line players such as Google, YouTube, Facebook, Skype, MSN, and others. They stand to gain substantial advantages by adopting on-line business models and emulating Web 2.0 ideas. In particular, they should learn how to convert their users into content and application developers and how to drive new revenues from user-generated content and social applications. This domain is as yet a largely untapped opportunity for operators and service providers.
Figure 4: SDP 2.0 – Tag Cloud
Providing ubiquitous access to the Web 2.0 services
Over 50% of operators surveyed by Moriana believe that their businesses can benefit by providing ubiquitous access to Web 2.0 services using both wireless and wireline broadband access technologies. However, wireless access using 2,5G and 3G technologies, such as HSDPA, GPRS, EDGE and WiFi as well as emerging 4G access technologies, such as WiMAX and LTE seems to be the most important for enabling access to Web 2.0. This is especially valid in the emerging markets, where penetration of PCs and broadband Internet access is still very low.
In general, pipe traffic over a range of different wireless access technologies is likely to significantly increase if there is a greater demand for wireless applications that combine telecom and Web 2.0 services. It is therefore in operator’s interests to promote and encourage innovation around these types of services, even if they simply focus on the goal of increasing traffic revenue over a range of access technologies.
Enabling mashups of telecom and Web 2.0 services
The prime way to bridge telecom with Web 2.0 is by enabling mash-ups of telecom and Web services. In this context, 75% of operators surveyed, believe that their most important assets are mobile Internet access, and user profile information including location and presence (see next section).
Progress towards Web 2.0 types of services, requires a common platform for service innovation that allows developers to combine telecom service capabilities with a range of innovative Web 2.0 services (such as Google maps). The goal should be to encourage and enable Web 2.0 developer talent to identify and generate applications with most widespread appeal.
Operator Data – “Telecom’s best kept secret”
What to expose - data or service capabilities?
In recent years there have been several attempts to ‘open’ up the networks and expose telecom service capabilities, first through OSA/Parlay APIs and then through OMA, Parlay X and proprietary Telecom Web Services. However, 3rd party services, except for premium mobile messaging services and content, have not driven the new revenue streams that operators had hoped for. So is something else available, with more value than functional APIs that operators can monetize?
The answer is a resounding ‘yes’. What operators have that Web 2.0 companies don’t have, and would like to have, is valuable data. Operators have a treasure chest of user, service and network data that is difficult to replicate and almost impossible to find elsewhere.
A crucial point, overlooked by many in the discussion on SDP, is the importance of exposing data, rather than service capabilities. Not surprisingly only about one fourth of all SDPs expose any form of data. Moriana’s view is that in order to attract potentially lucrative partnerships with Web 2.0 companies and to encourage the growth of Web 2.0 developer communities, operators need to change focus on the exposure of data.
Using SDP 2.0 for data exposure – a powerful business opportunity
The principal of data as a competitive advantage, leveraging presence and location combined with identity, usage information and device information, (with the appropriate privacy considerations) is waiting to be exploited. This data can be made available to partners via interfaces and a library of re-mixable widgets for mashups.
Operators are not unaware of this point. Indeed, over half of the respondents to the Moriana survey believe that operators’ businesses can benefit from exposing data. The survey showed that 65% of operators think that the (anonymous) exposure of users’ spending statistics, service profile, demographic characteristics, location information and other user-profile data can be the most beneficial to their business and generate new revenue streams. This confirms and highlights the point that it is the data not service capabilities that have the most business potential.
In order to make the SDP a success it is of paramount importance to open up and expose data related APIs. The move away from simple service capability exposure towards data exposure is the right way forward for operators. Web 2.0 platforms offer APIs using REST modeling rather than using SOAP. Operators need to understand this and make move to REST and a more simplified view of their interfaces.
Today, the vast majority of SDPs still use native protocols such as MM7 or SMPP to expose service capabilities. About half of all deployed SDPs also use SOAP to expose selected service capabilities. These interfaces are either too complex to use or of no interest to Web 2.0 developers. Hence unless operators act, this could be a problem going forward.
Fast forward to the Semantic Web
But operators have an even greater opportunity on the horizon. The Semantic Web is the next big development and will, in all likelihood, eclipse Web 2.0 in importance within a few years. The ability to bind and aggregate data to create new, unforeseen information is an exciting opportunity.
Operators should focus on making their data available and allow this to be combined with publicly available data. Since data will be correlated, operators are in a strong position for three reasons:
• They can provide valuable data;
• They can correlate and relate that data with other data;
• They can correlate and relate the data to the user profiles...
It is up to Operators and their platforms to take advantage of the opportunities offered by the “data market”. Unfortunately, only a few operators are working on this and consequently SDPs lack the advanced functionalities necessary to exploit this field.”
In Moriana’s view, the future of SDP 2.0 should be about recognizing that opportunity and specifying and building the required SDP functionality to both lead the way, help to build and take advantage of the developing Semantic Web. By doing so operators will put themselves in a prime position to partner with Web 2.0 companies, attract the right developer talent and thereby leverage and monetize their valuable data assets.