mobile data, $100bn and sourceo2 ..

This week brought good news with Mobile data busts $100bn milestone

For all of us who have been championing Mobile Data, that’s great news. And I remember not long ago people doubted if Mobile data was ever an industry?

But more importantly, looking behind the figures, O2 took the crown in Europe with revenues of $570m

This is VERY significant because O2 (and specifically sourceo2) has long been one of the best and most approachable Mobile Data programs outside of Japan/South Korea. It is nice to see O2 gain the benefits of the open approach to Mobile data. Well done Source O2, well done Mobile data industry!

full article as below:

NTT DoCoMo leads the way

By Jo Best

Published: Thursday 27 July 2006

While it might not be the bloated cash cow that the operators were once hoping for, mobile data is still, it seems, raking in not insignificant amounts of cash.

Researcher Informa Telecoms & Media has found that during the course of 2005 global mobile data services were worth more than $100bn in revenue. It was the first time the milestone had been reached for a 12-month period.

2006 is already on track to beat the $100bn figure, with the first quarter of this year seeing $28bn generated.

Informa found that Japanese operator NTT DoCoMo is top of the mobile data pops, extracting $2.5bn from users’ pockets in the first quarter of this year. O2 took the crown in Europe with revenues of $570m.

According to Informa, the world’s new found appetite for mobile data is a result of improved handsets, smarter tech and more users signing up.

launch of mobile web 2.0 spotlight

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Welcome to the mobile web 2.0 spotlight!

Coinciding with the launch of my book mobile web 2.0,

I am happy to announce that, in addition to my blog, I will also be writing for sys-con This blog on sys-con will be called ‘Mobile web 2.0 spotlight’

The mobile web 2.0 spotlight is now live. You can see the first post at welcome

(Just an intro at this stage and also the second post today called What is mobile web 2.0

The Mobile web 2.0 spotlight is a collection of the best services/products in relation to Mobile web 2.0, as I see it. In addition, I am also especially keen to highlight products from start-ups/emerging companies in this space

I am happy to receive your recommendations for excellent products / services in the mobile web 2.0 space. As you can imagine, the analysis is completely independent. If I have any affiliation with a company/product – I shall state that in the blog.

It is indeed great to work with Sys-con. I have had the pleasure of meeting the sys-con team and management, at the New York Ajax seminar in June this year. I am also speaking at the AJAX event in Santa Clara in Oct and I look forward to meeting you there if you are attending

Please contact me at ajit.jaokar at futuretext.com if you have a product you want to feature

To read more about sys-con and Roger Strukhoff (sys-con group publisher), see this link

And here is the obligatory brief bio about me

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With a unique perspective spanning multiple aspects of Mobile Applications, Ajit is an innovator and a pioneer in the Mobile Data industry. In 1999, Ajit co-founded futuretext futuretext , an innovative publishing / consulting company focused around mobility and digital convergence. Ajit speaks at Mobile related conferences – on both strategy and technology.

Recent speaking/media appearances:

CNN Money : July 2006 Follow the web 2.0 money, Grace Wong: July 13

New York : June 5/ 6 2006 web2.0/mobile web 2.0/Ajax

Seoul (Korea) : June 30 Mobile web 2.0

Santa Clara : Oct 4/5 2006 web2.0/mobile web 2.0/Ajax

In Oct 2005, Ajit was appointed to chair Oxford University’s next generation mobile applications panel . Ajit was also a member of the web2.0 workgroup Currently, Ajit plays an advisory role to a number of Mobile start-ups in the UK and Scandinavia. He also works with the government and trade missions of a number of countries including South Korea, Ireland and Faroe islands . Ajit has an Electronics engineering degree from the University of Bombay and in 2006 will be commencing a PhD on the topic of Delay Tolerant Networks.

In 2006, Ajit was invited to join the RSA (The Royal Society for the encouragement of Arts, Manufactures and Commerce)(Founded in 1754, the RSA includes leading thinkers from the world of arts, manufacturing and commerce). Ajit is now an RSA member.

Ajit lives in London, UK, but has three nationalities (British, Indian and New Zealander) and is proud of all three.

Salt, Pepper and Social networking?

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Introduction

This article discusses my views on business models for social networks. The content is a part of my forthcoming book mobile web 2.0. This article was also posted internally in the web 20 workgroup, of which I am member.Thanks to the members of the web20workgroup for their feedback.

I believe that Social networking should be like ‘Salt and Pepper’, a condiment: free or very cheap (the salt and pepper reference was made originally to WiFi as we see below). The real ‘value add’ is the value created by people using the network (i.e. nodes) or ancillary services that can be sold on the network; rather than the network itself. The network’s financial viability is then based on one or more secondary revenue models.

Social networking is a relatively new phenomenon. I am using this term here to also describe the sites included under ‘Social business networking’ (which also use the principles of Social networking). There is no shortage of theories about social networking , but oddly enough none of them talk of money/revenue models for social networking sites. On first glance, that sounds very unusual: until you realise that social networking sites are a microscopic version (i.e. model) of the Internet itself and are simply mirroring the Internet. This is a strong theme in this article i.e. Social networking sites should conform to the ethos of the web; else it is akin to fighting gravity and it won’t fly!

WiFi as a condiment (salt and pepper)

Back in September 2003, when we were all still in the nuclear winter of the dot bomb, there was a short, insightful article in Wired magazine called: Would you like WiFi with that by Paul Boutin.

It asked the question:

If wireless Internet access is such a hot technology, why is it such a dud business? Wi-Fi hardware, which uses radio signals instead of cables to connect computers to the Net, is already in more than 10 million laptops. But try to make a buck selling connectivity.

Sounds familiar?

But then, it goes on to provide a solution

If you want to see the right way to serve wireless access, find a Schlotzsky’s Deli. The Austin, Texas-based sandwich chain figured out the secret of making money from Wi-Fi: Give it away. Schlotzsky’s lets anyone sign up and use its network free, even if they don’t come in for a sandwich. The chain advises its 600 franchise owners to beam Wi-Fi signals through the walls into nearby hotels, parks, and college dorms. Such complimentary access points are popping up everywhere, from Buck’s, a roadside restaurant in Woodside, California, to the Portland Harbor Hotel on the Maine coast. And why not? Giving away wireless broadband saves on billing costs, attracts customers, and creates an instant competitive advantage. Buck’s owner Jamis MacNiven, who serves buttermilk pancakes to some of Silicon Valley’s top venture capitalists, has the perfect rap on the topic: “Charging for online usage would be like charging for salt and pepper.”

Read that last sentence again : “Charging for online usage would be like charging for salt and pepper.”

(BTW: I never knew VCs ate buttermilk pancakes .. but there you go .. you learn something new each day! I had to google that term to find out more ; shall try it out when I am speaking in Santa Clara in Oct )

And the article ends with: Wi-Fi isn’t a luxury or even a commodity. It’s a condiment.

Social networking as a condiment and the Ethos of the web

Substitute WiFi by Social networking in the above discussion and you see why so many of the social networking sites have a business model problem. Many of these sites are contrary to the ethos of the Internet.

That’s not to say that they don’t have a business model, or even that they may not be making money. It’s just to say that they are retrofitting an offline business model into an online situation and that has limitations.

And what is the ethos of the Internet? Its something I have been advocating to Mobile network operators for years now .. You can summarise it by the phrase: ‘Dumb pipes and Smart nodes’

The network (Internet) itself is ‘dumb’. Its only job is to ‘connect people’. The value is provided by the nodes (the people / systems that are at the ends of the pipe). Jonathan Schwartz summarises these ideas in the Power of the end nodes (AKA: ‘the network is the computer’). I believe that the same phenomenon applies to social networks on the Internet. The moment you introduce tiered membership, complex pricing models and so on, you hamper connectivity. The effective size of the network decreases because all members can’t do all things.

‘Dumb pipes and Smart nodes’ is how the Internet has always worked. Hence witness the uproar of the net neutrality folk and comments from Tim Berners Lee . And rightly so!

The same applies to WiFi and the same principle is also applying to social networking. This is the social equivalent of the digital concept : ‘All packets are created equal’.

Observations and recommendations:

a) Subscription model or a tiered pricing model is a valid model : but it is more a remnant of offline business models than online business models. The point simply is this: you can’t build a ‘web business’ by restricting people. We can build ‘a business on the web’ but that business model is limited because it is retrofitted from the offline world into an online environment; where it does not have a natural home. The same logic extends to other web models like Social production . We can’t selectively apply one aspect of the web such as ‘social production’ and ignore others i.e. ‘it’s inclusiveness’. Such a hybrid model is not valued by the investment community(and rightly so: because it won’t scale)

b) Could we perhaps argue that we have a smaller number of members but each of our members is somehow more valuable than those in other networks? . Interesting, but again not a model that mirrors the ethos of the web. It’s like saying ‘packets in my network are more valuable than packets in your network’. The online equivalent of ‘Mine is bigger than yours’

c) As I have mentioned before, the advertising model works assuming you have a large, flat/ unrestricted network. Advertising is more than Google ads. Its more driven by richer media and broadband in addition to text based ads. That’s why VCs favour the MySpace model. Note that this model (for instance Myspace) conforms to the basic Internet ethos.

d) A network should be like Nokia – connecting people! If it does more(i.e. tries to act smart), then it starts to disconnect people!

e) Nodes may not be people, they could be clubs. i.e. a group of people creating a ‘network within a network’. The club could be built around a specific purpose. It is not the network, rather it is an endpoint in the network with a synergistic relationship (and potentially a revenue share relationship) with the core network.

f) One service to watch is Marc Canter’s Peopleaggregator, and by extension the whole idea of open social networks because they follow the principles of the Internet. In case of People Aggregator, each node (which is a separate network in itself) could act as a node within a much larger network.

As per the people aggregator site:

At the centre of all great Live Web software will be one’s digital identity. Each end-user will control who has access to their personal data, who can use it and how. Each end-user needs to be able to move their data to other systems – whether it be their personal profile record, list of friends, groups, their photos, MP3s, links, bookmarks or events.

Oddly enough, open social networks have a business model , exactly for the reasons I mention above i.e. conformity with the ethos of the web. For instance, for People Aggregator,

a) For people aggregator itself, it’s a ‘software sales’ model

b) For each participating network, it’s the possibility of attracting more members and by extension each participating node is likely to be specialised.

c) For the users, it is freedom from one specific closed network and the chance to meet more people globally.

Conclusions:

If you have followed the arguments so far, it leads to the conclusion that the ‘Internet itself is ‘salt and pepper’’! And that’s exactly spot on!. The Internet connects people. Complexity and offline models disconnect people!

I am not necessarily advocating a free social business network, but definitely a flat, inclusive, open, ‘web like’ social business network whose primary job is to connect. Such a network follows the basic ethos of the web and is likely to be based on a secondary business model. This business model could be advertising but need not be. Whatever that model, it should not cripple the primary purpose of the network

Image source: www.bigfoto.com

The carnival of the mobilists

The carnival this week is at Michael Mace ‘s mobile opportunity Its great as usual. It includes a bit of glamour and nudity befitting a carnival due to my post on Naked SIP :)

web 2.0 revenue models: Show me the money!

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Synopsis

This article discusses revenue models for web 2.0. It shows how PageRank is an indicator of web 2.0.

It also discusses how conventional communities are not Web 2.0. The content is a part of my forthcoming book

mobile web 2.0. This article was also posted internally in the web 20 workgroup, of which I am member.Thanks to the members of the web20workgroup for their feedback. Also, Robert Scoble commented on this article and blogged about it on his blog. You will find more links from Robert’s blog as well for web 2.0 business models. Thanks for your comments on this blog and you can also contact me at ajit.jaokar at futuretext.com

Subsequently, the article also made it to techmeme also ZD Net (athough they spelled my name wrong!) also, I have recieved emails of thanks for VCs indicating how useful the article is to seperate the hype from the facts with web 2.0 – and that was its goal!

Introduction

Last week, I was featured on CNN in an article by Grace Wong entitled Follow the web 2.0 money.

The whole subject of making money with web 2.0 is quite critical. Ironically, a couple of weeks before, when I spoke at Seoul on Mobile web 2.0, I remarked that: If I ever got a dollar every time I was asked the question: ‘Is there money in web 2.0’? I would not need a revenue model myselves! But sadly, I don’t get a dollar each time .. :(

However, that still leaves the question .. Where is the money in web 2.0’?

The next time anyone asks you that question, remind them(and yourselves) that the greatest money making idea on the web is based on web 2.0 .. We all use it. We are all addicted to it. We can’t do without it! And it’s not even patented as far as I know. And that idea is .. Page Rank . PageRank is perhaps the best example of building and monetising a hard to create data source. Let us consider why Page Rank is ‘web 2.0’.

PageRank as web 2.0

I said previously that you can view web 2.0 as the Intelligent web. In fact, if you switch the order of the seven principles and consider that the second principle(harnessing collective intelligence) is the core principle and that the other principles feed into it, then web 2.0 becomes a lot clearer. Now, consider page rank in context of harnessing collective intelligence and the seven principles of web 2.0

a) Page rank uses the web from first principles(web as a platform)

b) It uses data as its core element(data is the next Intel inside). Data in this case, is the millions of

links that it tracks

c) There is no software release cycle. Its all updated continuously and dynamically

But most importantly .. PageRank ‘harnesses’ intelligence based on user input driven by the long tail (millions of small contributions from users as opposed to a few significant contributions from ‘important’ users) and creates a ‘hard to acquire’ body of knowledge plus a means of monetising it. So, to me, PageRank is an excellent example of a web 2.0 service. So, why is there so much doubt about monetization of web 2.0? Firstly, there is a lot of hype. There is not much we can do about that except to know that web 2.0 is more mature than web 1.0(and we are all wiser as well!)

We discussed PageRank as an example of how to create a unique digital asset. In revenue terms, perhaps it is easier to tell ‘what not to do’ to reinforce the concepts of web 2.0 revenue models.. To explain these ideas in terms of familiar concepts, I have used the example of a Digital community. Most of us have, at some point, joined such a community. By ‘community’ here I mean, members have a profile, they can chat, they can rate profiles/content etc

Communities != web 2.0

So, is such a community ‘web 2.0’? My view is : No. Here’s why

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a) No tail:

Web 2.0 is all about monetising the long tail. Often, sites do not monetise the ‘long tail’ : To recap, long tail needs lots of small contributions from many users(often contributed implicitly). To do so, the site must

1) Firstly, attract the long tail(many members)

2) Secondly, capture content from the long tail in a form that can be aggregated

A membership of thousands can’t lead to a valuation of millions! You need the numbers make money from to be web 2.0(i.e. the long tail)

b) No harnessing of collective intelligence

Merely having the numbers is not enough. A site may have the numbers but may not be harnessing collective intelligence. Comments on blogs/articles don’t count unless they can be aggregated into something valuable. After all, let’s not forget that an ‘Amazon review’ is a comment. But there is a huge difference between ‘a comment on a blog entry’ and a ‘review on Amazon’. For starters, reviews on Amazon can be aggregated into ratings (Nine good reviews out of 10). Further, reviews on Amazon can be ‘discovered’ easily(for example against a specific book). Finally, and most importantly, the customer values those reviews; either in their raw form(text) or in their aggregated form for example: ‘Four stars’. The customer may not always value simple comments on a blog/site.

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c) Going for the ‘head’ at the expense of the ‘tail’, but still headless ..

When sites do not monetise the ‘long tail’ they attempt to monetise the ‘head’ i.e. the ‘few’ rather than the ‘many’. This is often at the expense of the long tail and is an attempt to apply offline model to an online world On first impressions, focussing on a few paying customers sounds like a good idea. After all, the few who are the ‘target customers’ are ‘high net worth’. They have money. So, surely they should pay a ‘premium’? The problem here is two fold :

• Firstly, the few(head) do not necessarily want to go ‘online’ ; not at prices to support the site’s

business anyway and

• Secondly, from the site’s perspective, focussing on the head is often at the expense of the long tail

This reminds me of web 1.0 days when I knew someone who was attempting to create a trading site for merchants trading in diamonds. The business plan had some ‘key features’, which included extensive security systems and some inbuilt trust mechanisms(a kind of rating/recommendation system). I don’t know much about the diamond industry : but one of my close childhood friends belonged to the Palanpuri Jain community . Their extended family have been diamond merchants for generations. From what I know based on actual discussions with my friend over the years, diamond merchants have a different mindset.

Take trust: Diamond merchants have an excellent system of trust. The best ever. They call it ‘family’!.

Security? same solution. Try convincing them that ‘web cams’ are a better way than ‘face to face’ interaction. And finally, and most importantly, try telling them how much it all costs when you have outlined the above ‘benefits’ .. This is not to say that they are technology averse, it is merely to point out that there is no value add in this situation. Years later, I mentioned the incident to a Jewish friend in London and he said that the exact same reaction would be expected from diamond traders from the Jewish community; and for the same reasons.

While I have not seen another such ‘Diamond merchant’ proposal, I have however seen many instances when people go for the ‘head’ and not the ‘tail’. I think it’s a hangover from the dot com days .. in the later half of the dot com years, people insisted that sites were B2B, whereas B2C was considered a pariah. In the same way, people have a (false) sense of security when they think that they have identified a group with ‘money’. Whether that group is interested in paying you any or not is another matter!

So, a model of targeting the ‘head’ does not quite work and it is actually contrary to web 2.0. Not only is the ‘head’ not interested in paying and may sometimes not see the value,(think diamond merchants) but more importantly; if you orient the site towards the head; you cut off the tail. For instance: if you wanted to work with a few, large customers; you would create agreements and contracts and have a high joining fee for the site. All this will alienate the vast bulk of members(the long tail).

d) Closed systems: restrictive memberships

For the same reasons as above(it targets the head and not the tail)

e) No mechanism for quantifiable implicit contributions See (b)

f) No aggregation of user feedback See (b)

g) Proprietary technology : Restricts the membership growth and restricts interaction between members.

h) A hidden agenda(slapping a fee): This is a valid web 1.0 model, but not a valid web 2.0 model. The script goes something like this: Start a ‘free’ site, invite many people. Create buzz. Build up the numbers. Insist that you are ‘free’ but plan on slapping a membership fee for premium services. This is a valid model but it is not web 2.0 in itself if there is no harnessing collective intelligence, catering for the long tail members etc

i) Too narrow: Targeting a small subset of the population(a specific country, group etc) rather than ideally, the whole world!

j) Social contributions without a goal: User generated content/social contributions are huge – but without a goal – they are just ‘noise’. For instance, everyone understands what ‘Linux’ development is. Not so common perhaps is antbase.org (‘A site that does for ants what bird watching has done for birds), which is also excellent. In both cases, there is a clear goal. Without that goal, you have noise. Lots of contribution, but no real direction.

So, what works?

Show me the money!!

Show me the money – As Jerry Maguire would say!

Here are some ideas that do

I have used information from some excellent work done by Dion Hinchcliffe and specifically one of his blogs ‘Creating real business value with Web 2.0’

a) The resurgent adverting model driven by rich media and broadband. Once dismissed, the ad

sponsored model is back with a bang! The software industry is about a $40 billion a year industry.

Advertising is worth about ten times as much and its all moving online(hence witness newspapers in

financial quagmire).

b) To re-emphasise, the monetization of the long tail is critical in a web 2.0 business model

c) Gaining control of a hard to create data source and then being able to successfully monetise it(for example: www.craigslist.com)

d) Web services including mashups: amazon.com is the best example. Currently estimated to be earning Amazon $211 million a year. The Amazon web services model ‘decentralises’ the store by converting the store itself into an open, easy to use platform.

e) Serving the large number of small customers through using the web. Examples include SugarCRM and salesforce.com

f) Give something valuable for free . This idea comes from Nat Torkington from the O Reilly web site(seven principles of web 2.0). Another way to look at it is that the successful companies all give up something expensive but considered critical to get something valuable for free that was once expensive. For example, Wikipedia gives up central editorial control in return for speed and breadth. Napster gave up on the idea of “the catalog” (all the songs the vendor was selling) and got breadth. Amazon gave up on the idea of having a physical storefront but got to serve the entire world. Google gave up on the big customers (initially) and got the 80% whose needs weren’t being met.

Finally, there is the question: Should web 2.0 have a revenue model as the VCs see it? (which is not to say that web 2.0 does not have a revenue model)

The web is a great leveller. This means, many more people will become financially richer but a it will be difficult to be very rich. With web 1.0, inspite of the boom and bust, many countless people actually made money and created a viable business(My company Futuretext itself, is one – because the web enabled digital printing (with optimal batch sizes of 500). Prior to that, you had to print litho. Litho implies a huge upfront investment and a minimum batch size of around 2000)

Indeed, PageRank is so unique that, although very common, it is almost impossible to emulate. Web 2.0, in general, is oriented to creating big winners – hence VCs will always be attracted to it because web 2.0 companies have a clear barrier to entry if they become dominant players in their sector.

Seek comments:

Image soure: The doberman http://www.fordogtrainer.com/pics/dog-harness/nylon-dog-harness/doberman-nylon-police-harness-big.jpg

Headless chicken: http://www.roadsideamerica.com/attract/images/co/COFRUIchicken2_carter.jpg

‘Show me the money’

- from the movie Jerry Mcguire (1996)

Telecom operator 2.0: Can we set up an alternative mobile network using Wi-Fi and/or Wimax?

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Introduction

Many of us work with Mobile network operators and find that a frustrating experience (and that includes many people who work for Operators!). Secretly, we think that we could do a better job! Could we perhaps set up an alternative wireless network? The two most likely technologies that can achieve this goal are Wi-Fi and WiMAX.

Is this a pipe (no pun intended) dream? Can it be done?

We are considering two questions here:

a) Can alternative technologies like Wi-Fi and WiMAX be used to set up a functionally analogous mobile network operator? And

b) How disruptive can such an operation be? Who would it benefit?

Before we start: many of us, including me in this article, are guilty of combining ‘Wi-Fi’ and ‘WiMAX’ in the same argument. Other than similar sounding names, they are really quite different. Indeed, as we shall see below, WiMAX has more in common with 3G (i.e. cellular) and broadband than it does with Wi-Fi.

So, our roadmap for this article will be:

a) The evolution of Wi-Fi to Wi-Fi grid networks and the possibility of using Wi-Fi grid networks as an operator

b) The potential of WiMAX technology to provide an alternate wireless network

But, to really understand this issue, we have to consider the question:

1) ‘What is ‘mobile’? and a secondary question:

2) ‘What do we mean by a ‘functionally analogous’ mobile network operator?’

When we refer to mobility, we referring to ‘anywhere/anytime’ access to the service.

The caveats to this definition are:

a) A reasonable quality of service is expected.

b) The lack of quality of service could lead to a ‘good enough’ solution.

c) A good enough solution, if it is cheap, could actually be a preferred solution in comparison to a complex, expensive, non interoperable solution

d) In some cases, ‘anywhere / anytime’ could equal ‘sometimes’. Specifically, ‘sometimes’ equates to proximity to a hotspot.

Thus, the requirement is really a trade-off between quality, coverage, cost etc.

Another way to put this is: 3G and Wi-Fi don’t compete at one level because 3G is a cellular technology (in theory, available any time) and Wi-Fi works only around a hotspot. But, a ‘Wi-Fi Blackberry’ is already here!. The customer will spend their dollars at only one place. So, at a dollar level, they compete. This comparison will be played out on a much larger scale soon with the introduction of WiMAX. In the end, the customer will decide the scenario that will succeed.

With this background, let us consider the two scenarios: namely Wi-Fi mesh networks and WiMAX

Wi-Fi mesh networks

Wi-Fi or Wireless LANs is a term which refers to a set of products that are based on the IEEE 802.11 specifications. The most popular and widely used Wireless LAN standard at the moment is 802.11b, which operates in the 2.4GHz spectrum along with cordless phones, microwave ovens and Bluetooth. Wi-Fi enabled computers or PDA (personal digital assistants) can connect to the Internet when in the proximity of an access point popularly called a ‘hotspot’. The Wi-Fi alliance is responsible for governing and standardising Wi-Fi technology.

Due to the (runaway) success of Wi-Fi, the industry has always looked for ways to extend the role of Wi-Fi beyond simple localised access. Most people are familiar with the ‘Basic’ configuration of a Wi-Fi network. In this case, the Wi-Fi access point is directly connected to a network and provides wireless access around a 100m radius around the access point. The basic configuration is not scaleable. An alternative configuration is called a ‘Wi-Fi mesh’ configuration. In a Wi-Fi mesh configuration, only one access point needs to be connected to a physical network. Each access point in a mesh network supports two connection modes: A client connection, through which it communicates with a client which wants to connect to the network and a backbone connection, which it uses to connect to the client in the network which is connected to the physical network

Thus, Wi-Fi mesh technology offers a way to achieve, in principle, coverage around the whole metropolitan area.

WiMAX

WiMAX stands for wireless interoperability for Microwave access and is defined by IEEE 802.16 standards. It is promoted and standardised by the WiMAX forum . The confusion around WiMAX arises because there are two versions of WiMAX: fixed location WiMAX and Mobile WiMAX

The original specification of WiMAX was for the fixed location WiMAX (IEEE 802.16-2004). Fixed location WiMAX is mainly used to provide wireless broadband connectivity. It may be ideally suited in many rural areas but also in some urban areas where installation of physical connections is expensive.

Mobile WiMAX (specified in 802.16e-2005), on the other hand, evolved much later (and in fact, is still evolving). In contrast, fixed location WiMAX is relatively mature with the first products hitting the marketplace already. Unlike fixed location WiMAX, Mobile WiMAX competes with cellular services. Mobile WiMAX relates to ‘handoff’ i.e. a customer can move from one base station to another and yet maintain their network connection. As you can gather, Mobile WiMAX competes with both 3G cellular services and also with the Wi-Fi mesh networks.

Currently, much of the WiMAX activity is around fixed location WiMAX (for instance clearwire recently got a close to a billion dollars of funding! ). And much of the hype is around Mobile WiMAX. In between these two modes, there is the nomadic WiMAX mode. Nomadic WiMAX means you have coverage within the area but not handoff (so the connection drops when you go outside the coverage area). Considering the relatively wide coverage area, this may not be so bad.

Spectrum issues

Spectrum issues will affect the actual possibilities and rollout timeframes of these technologies. They differ from country to country. Wi-Fi operates in the unlicensed spectrum with 802.11b in the 2.4 GHz and 802.11a in the 5Ghz. WiMAX on the other hand can operate in either licensed or unlicensed frequencies from 2 GHz to 66 GHz. The original versions of WiMAX operated in the 10-66Ghz range but needed ‘line of sight’ access between the base station and the client. Obviously, this was very restrictive. Subsequent WiMAX standards are designed to operate in the lower frequencies (2 GHz to 6 GHz). At these frequencies, line of sight is not required.

Observations

a) Many people consider Wi-Fi, as it stands today, to be disruptive. Certainly, it is. However, the future appears far more disruptive especially when we consider WiMAX and Wi-Fi mesh technologies.

b) Simple always wins; every time

c) The industry uses popular technologies in ways that were not originally envisaged (PLSQL instead of SQL, Ajax frameworks and Wi-Fi mesh networks are all examples of this trend.)

d) A good enough solution may be the winner rather than a complex, difficult and expensive solution

Conclusions

We started off with the two questions:

a) Can alternative technologies like Wi-Fi and WiMAX be used to set up a functionally analogous mobile network operator? And

b) How disruptive can such an operation be? Who would it benefit?

The answer is: It depends. Depends on what you call a ‘mobile network’. More specifically, depending on what customers call a mobile network. Where will customers see value?

As we have seen above, will customers accept tradeoffs between handoff, QOS, Cost and coverage?

Commercially, it also comes down to spectrum issues. Who develops the spectrum and what services do they provide? One thing is for sure: setting up a Wi-Fi mesh network or a WiMAX network is a non trivial exercise. The companies who are likely to succeed in this task are the ones which are very well funded. They are also likely to be non-incumbents.

In my view, the winner will be the customer and the customer will define and decide what exactly they mean by a mobile network and whether it will succeed.

References

a) WiMAX and the Metro wireless market: WiMAX vs. Wi-Fi and 3G

Michael F. Finneran dBrn Associates, Inc. 189 Curtis Road Woodmere, NY 11598

Tel. (516) 569-4557 Mobile (516) 410-5217 [email protected]

b) WiMAX: Opportunity or Hype?

Michael Richardson

Patrick Ryan

University of Colorado at Boulder

Interdisciplinary Telecommunications Program

PeopleRank: the new directory inquiries

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Introduction

In this article, we discuss a new form of search engine: a search engine of (verified) tags. Here, tags have the same meaning as they do on flickr etc except that they are verified and they could connote either businesses or people. This search engine is driven by an (as yet) hypothetical internal algorithm which I call for the lack of a better word, ‘PeopleRank’ (analogous to Google ‘page rank’). Much as I hate the word ‘PeopleRank’, it portrays the meaning I want to convey due to it’s similarity to the Google page rank .

The basic idea is ‘tags’ could be used to make calls from the web to any number. A directory based on an algorithm(which I have called ‘PeopleRank’) would act as a user interface(and in effect a virtual operator) and place the calls.

Its more about convenience. When Amazon was first launched, many people thought Amazon was about cheaper books. Today, we don’t necessarily expect cheap books from Amazon – but we get ‘something more’ i.e. the choice. Similarly, with this concept – you get all the numbers in one place, you get presence information and you can call the numbers from the web.

In a nutshell, PeopleRank indicates a complex algorithm for classifying people/businesses(a directory) but it also incorporates their profile/presence information. Thus, the PeopleRank directory/algorithm knows who you are, the context(for instance; where you are ) and how you wish to be contacted. Such a mechanism is driven from the web and works at the application level of the stack(in other words, it is not ‘fixed to mobile convergence’). It takes away the locus of power from the Mobile network operators and back to the user through a profile.

Central to the discussion below is the concept : I am not a number, I am a tag

The idea of ‘I am not a number, I am a tag’ is highly disruptive to the telecoms industry as we shall see below. It was first put forward by my co-author Tony Fish . This article expands on the original ideas and discusses potential mechanisms that would make this vision possible

The idea of ‘I am not a number – I am a tag’ was first discussed HERE

I am not a number – implementation

The idea of ‘I am not a number – I am a tag’ sounds enticing enough. But how would it be implemented?

Let us break down the functions

a) Profile: We need a mechanism which stores user information including context(location, presence etc) i.e. a profile

b) Identity: We need a trusted identity i.e. the ability to reliably identify the person and their information we want to call

c) Addressing: Finally, we need the ability to discover and address the mobile device independently of a telecoms operator(else it defeats the purpose and the idea no longer becomes disruptive). I call this ‘bridging the wireless gap’ i.e. the last wireless mile

Profile

The profile requirement is the simplest. Already, many social business networks maintain a profile. That profile can be used to store a range of contact information which may be made public or released to a selected audience. Presence information could be manually updated or could be set via rules.

Identity

Identity is a more difficult concept and needs a lot of thought. Recently, I flew across to the USA to speak at the Ajax seminar in New York. At the US immigration, homeland security has the new fingerprint system. At our end(UK), we have a new voluntary scheme called IRIS (pdf) which scans the retina of the eye. I joined that as well.

Thus, in essence, two entities(the UK govt and the US govt) can identify me from biometric information. This kind of identification arises from primary sources(biometric) and is validated by organizations which are accepted and recognised globally (the US and UK governments). Hence, my primary identity is defined by these primary facts(biometric information, birth certificate etc). This leads to conferred identity(secondary identity) such as driving license or passport. Providing the issuing authority of these documents such as a driving licence or a passport is recognised and accepted, the secondary identity is also as good as my primary(biometric) identity. Ofcourse, there is a risk that the secondary identity may be forged(such as fake passports). That risk, coupled with increased global threats, have caused many governments to revert back to primary identity(retina scanning/finger prints). These of course, cannot be forged.

Identity in the digital world

On the web, identity is still relatively primitive. Identity is what a system knows about me at the time of registration. This may not be true. Every time I register with a new system/site, I create a new identity. Each of these identities are not tied to any biometric information(currently). They are silos because each site has its own membership system. The obvious way to solve this was the ‘single signon’ method. Microsoft attempted this through their passport mechanism. But that did not receive much response. Initiatives like the liberty alliance are a consortia of companies. But .. Consortia often have an important member missing, in this case, it’s Microsoft.

Ideally, users should control their own identity. The current thinking around identity is to work towards ‘Open Identity’: with users controlling their own profiles and storing their data at an independent place on the web. Open identity is still at an early stage. However, from the perspective of mobile web 2.0, a simpler approach could suffice. Let us not forget that we are making a phone call here! A simpler interpretation of identity may suffice for our purposes. That identity could be ‘reputation’ and this leads us to the idea of ‘verified tags’.

Verified tags

As we have seen before, conferred identity (for example driving licence), can be used instead of the primary identity. For example, conferred identity can be used to buy a range of services in the physical world(for instance you can show your driving license to buy services). In the digital world, tags / avatars etc are all a form of identity. However, they are not verified.

To achieve the concept of ‘I am not a number ..’ you need a verified tag.

How can we verify the tag? You could use something like the Liberty alliance or similar mechanism. But that’s too ‘top down’, complex and expensive. But let us put this in perspective first .. A phone call is not a transaction!. The stakes are a lot less lower. In this case, rather than a full fledged approach(such as liberty alliance), which is expensive, a simpler more organic approach could suffice. This approach is based on the concept of ‘Identity = reputation’.

Reputation is what others say about me on the web. That’s an organic way to ‘verify’ me i.e. my tag. A verified tag allows me to be identified and verified, but not because who I say I am, but because others can validate what I say. This makes the mechanism a ‘closed loop’ system. In contrast, the Internet allows me to set up an ID called ‘John Smith’, without proof. I can then take someone’s verified ID can communicate to another channel. As this is open; it can be abused.

The next logical question is: how to capture that ‘reputation’? And here, lets introduce another word ‘Pingerati (or technorati 2.0) as I explained in a previous blog.

An algorithm (PeopleRank) could then process all that information to create a ranking/probability indicating who I am. In my case, the algorithm would process a number of tags such as ‘Mobile web 2.0’, ‘London’, ‘Futuretext’, ‘Ayn Rand’, ‘Tom and Jerry’(the last two because I follow Ayn Rand’s thinking and love ‘Tom and Jerry’ cartoons!’) and ‘identify’ me if you wished to call me. But then again, with a name like ‘Ajit Jaokar’ – I don’t need too much verification – there can’t be too many people by that name :)

Addressing

So, thus far we have seen how we could identify a tag based reputation. Our goal is to make a ‘phone call’ that tag now that we have reliably identified the tag. The question arises, how do ‘place’ this call from the web? If this is a mobile phone, how can we bridge the ‘fixed to mobile’ gap?

From a telecoms perspective, to place an IP call to someone on a mobile IP network, you need their IP address. That address may be mapped to any identified(tag, avatar etc), but an IP address is required. We also need to know presence information: Is the ‘tag’ available to accept phone calls. On first impressions, the requirement of knowing the IP address in advance sounds very daunting. In fact, it may not be so as we show below.

I can think of two ways you can ‘call’ a phone.

a) Skypeout and

b) Naked SIP

Skypeout

The first and the simplest is to use an enhanced version of a mechanism like Skype out http://www.skype.com/products/skypeout/ . Skype out has a profile and can already call any phone including a mobile phone. So, we need the Identity and presence features which are missing at the moment. Presence can also be provided by the user manually or through rules(Between 7 to 9 in the evening, call me on my home number).

Naked SIP“Naked SIP” is SIP without IMS. I have explained the concept and significance of Naked SIP before

Conclusions and Observations

From the above discussion, we see that :

a) I am not a number, I am a tag : can be implemented at multiple levels – either as a simple skypeout call or through naked SIP in future

b) Identity can be implemented organically through ‘Pingerati’

c) To some extent, we already use the web to check identity manually. How many times have to ‘googled’ someone to ‘check out’ who they are? That’s an ID check!

d) Its more about convenience. When Amazon was first launched, many people thought it was about cheaper books. Today, we don’t expect cheap books from Amazon – but we get ‘something more’ i.e. the choice. Similarly, with this concept – you get all the numbers in one place, you get presence information and you can call the numbers from the web.

Acknowledgents:

Dean Bubley:

Marc Canter : Breaking the web wide open

Naked SIP is more likely to succeed than IMS ..

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“Naked SIP” is SIP without IMS. Naked SIP is disruptive as we shall see below.

Wikipedia provides a comprehensive definition of IMS .

The IP Multimedia Subsystem (IMS) is a standardised Next Generation Networking (NGN) architecture for telecom operators that want to provide mobile and fixed multimedia services. It uses a Voice-over-IP (VoIP) implementation based on a 3GPP standardised implementation of SIP, and runs over the standard Internet Protocol (IP). Existing phone systems (both packet-switched and circuit-switched) are supported.

The aim of IMS is not only to provide new services but all the services, current and future, that the Internet provides. In this way, IMS will give network operators and service providers the ability to control and charge for each service. In addition, users have to be able to execute all their services when roaming as well as from their home networks. To achieve these goals, IMS uses open standard IP protocols, defined by the IETF. So, a multimedia session between two IMS users, between an IMS user and a user on the Internet, and between two users on the Internet is established using exactly the same protocol. Moreover, the interfaces for service developers are also based on IP protocols. This is why IMS truly merges the Internet with the cellular world; it uses cellular technologies to provide ubiquitous access and Internet technologies to provide appealing services.

From the above definition, we see that SIP is at the heart of IMS.

The following definition of SIP is adapted wikipedia

Session Initiation Protocol (SIP) is a protocol for initiating, modifying, and terminating an interactive user session that involves multimedia elements such as video, voice, instant messaging, online games, and virtual reality. It is one of the leading signalling protocols for Voice over IP, along with H.323.

SIP clients traditionally use TCP and UDP port 5060 to connect to SIP servers and other SIP endpoints. SIP is primarily used in setting up and tearing down voice or video calls. However, it can be used in any application where session initiation is a requirement. A motivating goal for SIP was to provide a signalling and call setup protocol for IP-based communications that can support a superset of the call processing functions and features present in the public switched telephone network (PSTN). The SIP Protocol by itself does not define these features, rather, its focus is call-setup and signalling. Some basic functions being implemented by SIP are currently being done by the SS7 network(signalling system 7 network) within the telecoms industry. SIP can do what SS7 does currently but it can do a lot more especially when it comes to multimedia sessions.

From the above, we see that

a) SIP is primarily involved in setting up and tearing down IP sessions.

b) On the web, SIP is used for peer to peer sessions

SIP and IMS go together because peer to peer does not work well with mobile. In a true peer to peer session, there would be no intervening server component. The devices would communicate directly with each other. This could lead to problems in some situations. For example, if the device is out of coverage, in the absence of a server component; no message could be left. Thus, a network component is required. That network component is IMS. Hence, in a traditional telecoms situation, IMS and SIP go together because SIP sets up and tears down the IP session and IMS provides the back end function including quality of service, support services to call management etc.

However, SIP and IMS need not necessarily go together!

There is a great report on this topic by Dean Bubley who blogs at disruptive analysis blog.

In a nutshell, from the report hightlights page:

• SIP – an essential basic subcomponent of IMS – is much easier to implement than a full IMS software framework. SIP-capable phones are already shipping.

• There are many interesting non-IMS applications of SIP on mobile phones, such as VoIP, Internet IM, enterprise IP-PBX access, or interactive games.

• In total, 787m SIP-enabled mobile handsets will ship in 2011, of which 40% will be smartphones. Europe will account for 50%+ of SIP handset volume shipments until 2010, although Japan and Korea lead, in penetration terms.

• “Naked SIP” phones, on which 3rd-party applications can exploit the SIP stack, will grow rapidly in importance, with 48m shipping in 2006, more than 220m in 2008 and 500m+ in 2011. This is a huge threat to mobile operators.

• Naked SIP will be enabled by smartphones OS’s, virtual machines like Java, and the inclusion of “exposed” SIP in many featurephone platforms.

• Although some devices will support both naked SIP and operator-oriented IMS applications, there will be 1 billion more naked SIP handsets shipped, than operator-only “closed IMS” phones, between 2006-2011.

• Internet brands, enterprises, 3rd-party developers and competing service providers will exploit the opportunities from the 1.6 billion “naked SIP” phones that will ship between now and 2011, using on-handset software clients.

• Some operators will attempt to block “parasitic” 3rd-party SIP applications, by “locking” handsets or intercepting network traffic. These attempts will seem clumsy and vindictive, and will likely drive churn and customer disloyalty.

So, what does this tell us?

‘SIP only’ phones could be numerous. They could run useful applications from third parties. They don’t need IMS. They could be true ‘peer to peer’. You could place a VOIP call to such phones from the web because they contain the VOIP stack and the SIP stack.

This makes (naked) SIP + third party applications and not IMS the more disruptive technology!

Image source: (I am sure people would be interested in this one!) ..

Google images + http://burntelectrons.org/media/moznews/mozillanews-naked.jpg

I am on the CNN money web site today ..

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I am on CNN money today! Full article as below and link following the article.

Follow the Web 2.0 money

Too much money chasing too few deals? Who cares? VCs still upbeat about the next wave of Web services.

Grace Wong, CNNMoney.com staff writer

July 13 2006: 2:47 PM EDT

NEW YORK (CNNMoney.com) — Web 2.0 may be a buzz word, but it’s still attracting big bucks.

Some of the novelty surrounding Web 2.0 has worn away since the term first gained traction in 2004, but venture capitalists in search of the next big thing are still pouring money into the industry.

Venture capitalists invested $3 billion in Web 2.0 firms last year, up nearly 9 percent from 2004, according to the MoneyTree report by PricewaterhouseCoopers and the National Venture Capital Association.

As the growing penetration of broadband makes the Internet a routine part of life, these so-called Web 2.0 sites – which revolve around user-oriented and user-driven content – are revolutionizing the way people interact with the Web.

Ajit Jaokar, a Web 2.0 evangelist who also chairs Oxford University’s next generation mobile applications forum, refers to Web 2.0 as the “intelligent Web.”

“It’s about harnessing the collective intelligence. The users are the ones who add value to these sites,” he said.

With online advertising booming, some of these start-ups can become viable businesses, venture capitalists said.

“These firms represent the new wave of consumer online services. They’re able to leverage lower infrastructure costs to generate real businesses,” said Neil Sequeira, a principal with Cambridge, Mass.-based VC firm General Catalyst Partners.

There’s some concern that venture capitalists are creating a Web 2.0 investment bubble, and while industry insiders say there’s more capital flowing than there are opportunities, it’s not all hype.

“There’s a lot of enthusiasm about all that is afoot. With the growth in broadband and wireless connectivity, there’s a fundamental shift in how people experience the Internet,” said Gary Morgenthaler, general partner at Morgenthaler Ventures.

Web users can be fickle though, and rival sites can spring up virtually overnight and overtake established market leaders.

The canonical example: Kleiner Perkins-backed Friendster, one of the first sites to connect friends on the Web, doesn’t even rank among the top 10 social networking sites today.

According to Web traffic tracker Nielsen//NetRatings, Friendster now attracts only a fraction of the audience of MySpace – the site Rupert Murdoch bought for $580 million last year.

Winners circle widens

There’s a lot of money chasing the same opportunities, and competition can be stiff, VCs said. But the consumer market is also large enough for there to be more than one winner in any given sector, they said.

The market can be segmented – for instance online communities can be formed around age, according to David Shapiro, a director at 3i, one of the largest private equity and venture capital firms in the world.

“You can make multiple winners that way. There is the ability to leverage online communities in a more specialized way,” Shapiro said.

The smart money flows to innovative firms with solid business plans, VCs said.

David Sze of Greylock Partners says he’s wary of copycats that don’t offer anything new to the user experience. “The biggest thing that scares me is the me-too companies. I look for those that are leaders, first-movers or innovators.”

Not every start-up is going to make it, but those that do – through a public listing or corporate acquisition – generate plenty of interest in the market.

“It’s a tough stock environment and it’s hard to find growth,” Rob Lutts, president and CIO with Cabot Money Management said.

“The common theme of these Web 2.0 firms is that they’re using the Internet to improve productivity in older industries, which can have a startling effect on the economy,” he said.

link : THIS link!

Mobile web advertising: a contradiction in terms?

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Russell Buckley and I have worked together before and we swap ideas on many things mobile. Here is a discussion we have been having – considering Russell’s new venture admob.

Seek thoughts on this

It pertains to advertisements placed on mobile web sites

My impression of mobile browsing is: people browse on mobile devices with a specific purpose in mind (unlike on the web).

This means, sites like Google will return specific results in a search query and the user will want to click that specific element of information.

For example: If you entered ‘Italian restaurants’ : then a Google mobile search will return specific addresses of nearby Italian restaurants(including perhaps means to directly SMS these restaurants from the mobile site).

In contrast, if you entered ‘Italian restaurants’ on the web, then we could get a whole host of results including perhaps the history of Italian restaurants in the UK etc etc.

So, in this context, my question is: Is not a mobile advertisement a contradiction in terms?

In other words, I go to the mobile site to get a specific piece of information. In that situation, why would I want to click on an advertisement on that page(since I am in a ‘hurry’ and ‘on the move’ already so to speak)?

Note, I am not referring to ALL mobile advertising – just advertising on mobile browsing sites.

Thoughts?