Tuesday, March 25, 2003

PC Forum: Untethered Data (Wireless) Esther is hosting a panel with industry leaders in the wireless industry: Larry Brilliant, acting-CEO of Cometa Networks Jeffrey Citron, president and CEO of Vonage (VoIP supplier) Bill McGlashan, president of Critical Path Larry says that consumers don't want another subscription, so they're building a wholesale network of WiFi hotspots that other service providers.  He's also just told us they've hired a new CEO (Gary Weis), who's get deep experience with IBM and ATT (two of the sponsors of Cometa). Esther:  how does the ATT relationship affect your relationships with other carriers? They're ensuring that customer data from resellers (e.g. RBOCs) will be protected from ATT eyes.  IBM is handling this security/identity issue. Tens of millions of dollars are being spent on new billing systems that can work with pretty much every other billing system used by carriers today. "If we're successful, you won't even know that you've signed up for Cometa service" "Access point and antenna technology are maturing rapidly, and our hotspots will be able to deliver 2-3 mile ranges for 802.11x" "VoIP over an 802.11b canopy".  Clearly they believe VoIP will be a killer app for WiFi. Shifting gears to Vonage. Leverage growth in broadband network, delivering good quality voice for a flat-rate price. "Virtual phone number" -- a number can be bound to multiple devices.  Esther wonders about the challenge of getting in through the telco morass to reach end consumers. He says that since they've decoupled from the service delivery layer provided by the telcos (what the CLECs dealt with) they bypass this issue.  (Whatever the case, they still have a customer acquisition challenge given consumer buying behavior). Esther:  can third-parites build apps into your network? Vonage:  our technology is standards based.  SIP.  IP.  but technology suppliers can't get in and build services into their network.  so they've not really open. Shifting gear to Critical Path. CP was pioneer of hosting mail/messaging.  Moved aggressively into providing licensed software to enterprises, but mostly carriers.  SMS/IM/Email/PIM, etc.  Provide the whole stack of messaging.  They also provide meta-directory identity management solutions to carriers. New offering offers a complete enterprise messaging platform.  Very attractive to carriers. Esther:  will corporations really rely on messaging platforms hosted by a carrier? CP believes that the network will ultimately provide the infrastructure for all messaging, with controls provided to the enterprise. Moving on to audience questions: Q: WiFi roaming seems immature.  Can Cometa help with this? A: It's very complicated.  Big issue is SLAs and QoS, enforcing roaming could be difficult especially with WiFi hotspots that are not highly secure or carrier class.  Currently, billing structures differ significantly by hotspot provider today, and until they are harmonized there can be no settlements.  Cometa plans to play a role in defining both SLA/QoS standards as well as billing/pricing structures and other networks could follow this and then be viable peers in a roaming agreement. Q: Bob Frankston believes there's no need for a new Internet connectivity platform, with new wires, new billing etc.  It's anti-Internet. I'll answer this one myself.  This misunderstands the economics of operating a large scale national network of access points that offer a high quality of service, security, and common billing and provisioning.  It costs money, and should be incremental cost (could be very small incremental cost) to existing carrier billing models that consumers and enterprises already have. "None of us can predict the hundreds or thousands of applications that will ride on top of this"     2:17:30 PM    comment []

PC Forum: Web Services Business We're getting into a discussion of the growth and role of web services on the Internet. Moderated by John Hagel, noted author, with a panel of notable CIOs for extremely large companies. Jerry Hale - CIO Eastman Chemical.  John McKinley -- ex-CIO of Merrill Lynch Tony Scott -- CIO General Motors Rather than detailed content on this session, I'm writing up small anecdotes.  Much of the content is too boring to cover in-depth. "Breathing life into vintage applications" -- web services free up old assets for use in more contemporary systems. "Abstracting developers away from legacy technology" -- web services are helping them shift skill sets away from legacy systems (CICS, Cobol) because they can now use these systems through standardized components on any platform. "It's the era of austerity" -- web services are helping meet the needs for converging enterprise applications without all the cost.  They're providing a very real cost savings in a tough economic climate. "business-to-business integration is stalled" --- but can be revitalized by web services networks like Grand Central Communications "industry is spending too much time on wireline protocols" --- until industry-defined schemas emerge, there won't be enough standardization in the web services data payload.  "payload standardization" is the next level of adoption that will foster inter-enterprise use of web services. "there's still a battle between customers and software suppliers over proprietary web services dev/deployment environments versus interoperable systems." "identity management can unlock the potential of web services networks" (again, enabling inter-enterprise uses). "We don't trust UDDI" "Tim-Berners Lee may be right, but it's a question of time" (the speaker then went on to note that he had no idea what TBL was talking about the other day here) "When will web services be in my car" -- GM says in 5 years we'll have fuel-cell cars with always-on wireless connections and rich software platforms providing the user experience. "We're just beginning to look seriously at open source" "As you move to the world of all Intel-based data centers, Linux will have a role" Overall, the panel was interesting but nothing that striking.  It's clear that in large corporations web services projects are viewed strategically, but that the larger vision of dynamic, network integrated inter-enterprise web services is very far away.  Customers remain concerned with interoperability in a time when vendors are rushing to layer proprietary technology into their web services stack.    1:30:12 PM    comment []

PC Forum: Content Biz Q&A Q:  one provider can't do it all.  as people discover the range of content and services out on the broader internet, will they stick with you.  these are Q&A with Jon Miller (AOL). A: basic answer = build better products. e.g. AOL Communicator (rich email) Q: but....it's anti-internet. A: progressively you get more open and broad.  as long as we can add value on the core people will pay. Q: will you try and be between the user and the Internet. A:  I sure hope so. Esther wants to know whether these guys will try and go after exclusive distribution of billed products. Dan (Yahoo) says that's the history of the world.  Unique products and services are how people compete. Esther thinks it's a real tension.  There is real choice, and it's a balance between autonomous Internet users and people who want integration and management. AOL thinks people want both --- managed, integrated as well as the ability to freely roam. CNet makes the point that in cable there was a key role in packaging and tiering of content, and enables a new kind of wholesale distribution.  This will be applied to the Internet.  This makes tons of sense to me. "The wonderful thing about the Internet is that someone wakes up each day excited and passionate about some topic" --- and that translates into great original, topical content. Q: AOL description about acquiring billing relationships with customers sounds good, but make sure you keep the relationships!  history of the internet has been one of the "immenent death of the small service providers", but the reality has been otherwise --- people continue to churn from large providers to small, vertical providers.  What do you think the role of small providers is? A: it's not a win or take all game.  always will be small or mid-sized.  there will contstantly be reinvention of verticals that challange the large players. A: Yahoo.  With broadband coming, it changes the competitive landscape as smaller players target this opportunity.  This will really hurt AOL because customers will have to justify another expense. A: AOL.  The answer is what is the value you're creating and what will people be willing to play. A: CNet.  If you build a better focused product than you can win.  (CNet has certainly proved this in the tech content sector).  Value focused, better service wins. Q: Biggest shareholder in AOL has said that AOL would be better on its own.  What do you think? A: You really want me to justify the merger?  :)  Does the worlds largest content company be associated with the largest digital distribution system? The answer is obviously yes.  Question is timing on when the environment is rich enough and original content delivers enough value.  (This is the right answer!). Q: Tim O'Riley.  Many AOL properties are tech properties -- mapquest, AIM  -- and these should be platforms that people can build on (e.g. web services APIs).  But AOL has done nothing to open these up as applications to build on. A:  AOL.  We're thinking about it quite a bit.  Stay tuned. 11:05:39 AM    comment []

PC Forum: Content and Context (AOL, Yahoo, CNet) This morning we're getting started with a panel and discussion about the business of content, with AOL's CEO Jon Miller, Yahoo COO Dan Rosensweig and CNET CEO Shelby Bonnie. All of these companies have been in a transition from the free/dial-up Internet to the fee/not-so-free broadband Internet.  It's very early in this phase and interesting to hear their perspective on the transition. Can they differentiate?  Will consumers pay more than one set of premium subscription fees? Yahoo says they use a funnel model --- free content, account-derived services, and paid services.  This allows them to serve many customers. They're focused on taking care of their existing user base rather than trying to get new customers.  Can that be??? Jon Miller believes consumers will subscribe to many different premium services on subscription. Esther wants to know if they will really "unbundle" services, versus aggregation. Lots of hedging and uncertainty coming from the panel about how they'll package premium content and services.  Discussion is moving on to the role of advertising in online content, rather than services. CNet lamenting how a content and advertising business focused on the tech market for the past few years has really sucked.......but trends are good, he says.  Claiming a resurrgence in online advertising, it's not a dead market. Jon Miller is arguing that as the Internet environment gets richer (e.g. Flash), that it becomes a more mainstream media where advertising can be effective.  I buy this, and it reinforces the radical improvements in ad results coming from the use of rich media platforms.  As the ads and the environment are more integrated, this should accelerate. Shifting the discussion to the semantic web and the use of structured data.  Does this change things? CNet highly leverages structured data in search and analysis tools for consumers -- e.g. comparison shopping, etc.  And this is value for the consumer as well as something that can be syndicated.  This is a new, growth business -- e.g. the downstream channel for data. Yahoo says the Internet is pretty straightforward....it's a giant database....and vaule comes from targetted views/activities into this database.  "They don't need to see how the sausage is made".  Yum.  Boy, what an insight....databases make the web more useful.... These guys don't seem to be tapped into the role of Web APIs (web services) and distributing content and services.  This must stem from the fact that they are deeply focused on controlling the end-user experience.  Dan (Yahoo) is arguing for database apps = sticky web.  CNet seems much smarter about the topic.  We're talking taxonomies now, and how relationships between taxonomies can surface appropriate data to users.  Now we're talking. Jon Miller says that the experience is about to get a lot better.  Broadband is changing the game in user experience.  This will be a new Internet.  Esther says that this doesn't necessarily give any competitive advantage to these guys.  This reinvention of the Internet and online services based on broadband and rich clients is wide-open, and no-one has really fully embraced it.  My theory is that both horizontal and vertical portals will get shaken up as rich client apps roll out over broadband. Yahoo is arguing that their aggregation and personalization facilities provide a context that consumers will always turn to, rather than going to distributed services. Shelby (CNet) says there has been a real change.  Years ago services were very thin, then we moved to portals and things got thick, but now things are going back to thin, as core search continues to be a primary value for customers. We're having a discussion on the issue of opt-in in signing up for free services, and how portals then intrude on users by pushing other for-fee services.  It's turning into a semantic issue.... Esther wants to talk about the balance between subscription versus advertising revenue.  AOL says they're dominated by subscriptions, and their core business will be acquiring customers and driving them into billable relationships.  This is the heart of it.  Paid content all the way! Yahoo is the opposite.  It's pretty much dominated by advertising.  This is over 50% of revenue.  All of the ad arenas are growing for them.  But they'd like to see subscription revenue grow, and are counting on it.  They'll even have full paid services with no advertising.  Paid content metrics will continue grow in numbers of subscribers, but revenue from that will not grow nearly as fast. Spam discussion.  It's bad, it's costly, they wil crush it. What's new on the services horizon? Yahoo is pitching their Premium offering --- first attempt for packaged content for pay.  Says the next 1-2 years will see paid services for "bread and butter" stuff -- email, spam blocking, etc.  But at the same time video-based services are seeing a lot of adoption, but whether people will pay for it is still an open question. CNet is arguing that basic gated subscription content is not taking off.  He says that the winners are when the user value is much higher --- either through aggregation or a much richer interactive experience.  Quality product = propensity to pay.  Jon Miller says the only way forward is paid content for this part of the Internet economy to survive. We're still recovering from the boom years where the assignment of value to content and online tools was crushed by market-share grabs which drove people to give away everything for free.  We're now seeing companies really assess the cost and value of their online content and services and putting real revenue models behind it. AOL --- it has to move to paid services.  Period. It's great to see such resolve from these guys (AOL in particular) about the need for paid services, and the focus on quality product, original content, really building this out as a unique media platform. Moving on to audience questions.       10:45:29 AM    comment []