Mashery

Over the last 6 months we have been watching an amazing transition in the Web 2.0 world we live in. Both Wikipedia and Tim O’Reilly refer to Web 2.0 as business revolution on the Internet, mostly referring to communities and collaboration platforms. We see Web 2.0 moving to be an interconnection of web services where content and services are delivered at the point and time where users want to consume it.

In recent weeks we have been approached by several Telco’s, all looking to learn from Web 2.0.  We see the early signs of a movement here –a move to Telco 2.0 and the Telco API. Telco 2.0 is a world where web services are open to all 3rd party developers to create new applications and services for telecommunications consumers through a Telco API. Voice, data, and wireless capabilities are extended by the community, driving adoption to specific brands and platforms. Companies like Ribbit, Plazes and Loopt are showing the world how it can be done today.

What can Telco’s learn from Web 2.0?
What are the drivers for Telco 2.0?
Is Telco 2.0 something that can really happen?
All are valid questions worth exploring.

Let’s start with why some Telco’s struggle with what to do and how to do it when it comes to web services. For voice related services there is the concern around performance and availability that have long been the landmark of the Telco business.  You pick up the phone and there is a dial tone, always.  Reliability expectations are high for customers.  Taking these services to web based API’s and matching reliability expectations could be a risky proposition for Telco’s. The general web community has accepted the fact that a free service will have some glitches and down time. In Telco, Skype has experienced some of the growing pains of providing a free service and matching reliability expectations. In non-Telco web-based applications, Twitter is an example of another free service that has been managing that expectation as well (although both appear to have made great strides in recent months to tackle up-time specifically). The web consumer will accept some level of disruption for a free service, the Telco industry needs to wrap its arms around this notion and be comfortable with supporting a service that may not meet its traditional businesses service levels.

The second is privacy concerns around data.  There are very interesting applications that can be made from latent content ranging from billing to CDR data. Of course, making this information available for others to build applications requires that people opt into the use of their information for other services.  This type of problem is solved in the web world today by leveraging new industry standards such as Oauth (in layman terms OAuth is delegated authentication where users opt into sharing data from one application with another application). This is another opportunity for Telco’s to embrace, learn, and extend from Web 2.0.

Other concerns we are hearing from Telco’s have to do with commoditizing key assets of the Telco’s business.  Well, dear Telco’s, it’s happening anyway. In our view, Telco’s must find new ways to participate and leverage their services to help drive innovation and adoption of the platform. Our friends at Best Buy said it well in their presentation at our Business of APIs Conference – “we want to double the size our business in 5 years and it’s going to require innovation – inside and outside the company.”  On the media side of the world, you have companies like Netflix who have opened their customer data and core catalog for commercial and non-commercial use within their API.  Netflix motivations for doing this are key to their success – they don’t care if others make money off of them, as long as these third parties are keeping Netflix engaged in the ongoing use of their service!  We see this as an equally interesting approach for Telco’s.

So who is a good role model for Telco’s in this new Telco 2.0 world?  Orange.  They have done an impressive job of making almost every aspect of their services and their customer data available through APIs.  Everything from SMS and Voicemail access to Contact lists and Calendars.

The Mashery Business of APIs conference last year included Asha Vellaikal from Orange Labs; have a look at her presentation for more insight.

We are just now seeing the interest from major Telco’s across the board.  Why? Smaller niche vendors are creeping into the space and offering services that are valuable to consumers and innovative developers. These niche vendors are entering quickly and providing open, free web based services – and the web consumer has taken notice. This market movement is an opportunity for Telco’s, we believe it’s the basis for Telco 2.0, what do you think?

Are you a Telco and is this in your 2009 plan?  You can learn from other industries that struggle with ownership of content, services, and monetization.  Check out the presentations from the most recent Business of APIs Conference to learn more or contact us directly and we’ll help you out.