dw2

27 August 2008

Sympathy for the operators

Filed under: openness, operators — David Wood @ 2:51 pm

It’s not just Apple and the iPhone that are the subject of some extreme views (particularly in North America). Network operators also provoke some red-hot far-out responses. But whereas the iPhone tends to provoke unduly strong admiration, the operators tend to provoke unduly strong opprobrium.

For example, here’s some verbatim comments that came up in a private piece of research conducted in and around Silicon Valley earlier this year:

“Everyone in tech has rope burns around their necks from doing business with the carriers. They hung themselves trying to do carrier deals.”

“The operator is an adversary, not a partner.”

“The basic problem with mobile is that the operators are in the way”.

In London, the sentiment is less blatant, but it’s still present. During almost every Mobile Monday London event that I’ve attended, sooner or later some question from the audience takes a semi-joking, semi-serious pot shot at network operators, blaming them for one or other aspect of lack of openness. I find these comments uncomfortable – first, because I count many friends among employees of network operators, and second, because it seems to me that the issue is considerably more nuanced than this kind of easy scape-goating suggests.

It was for this reason that I deeply enjoyed discovering and reading the recent article “Open=Beta?” by former Qualcomm SVP Jeffrey Belk. The article started by recounting some of the the usual criticisms:

“The application community, and the Venture Community that finances them, are rightly tired of what can be perceived as a small global cadre of folks in the carrier community, as well as egregious application qualification processes, putting a chokehold on the deployment of innovation in the applications space. And the chokehold is stifling innovation and growth of the wireless data applications business”.

However, as Jeffrey goes on to say,

“But as usual, the truth is not so simple…”

“One REALLY cool company got a trial with a few operators. A small problem: Their application bricked (i.e. killed dead, dead, dead) the phones of some of the trial users. Other applications, usually written by folks that are accustomed to the massive memory and hard drives of PCs or Mac, are WAAAY too resource intensive (memory, processing power) for anything but the top tier of smart phones, and even with that tiny market, performance of the apps is often suspect. Another application (fixed now), kept a persistent data connection up between the phone and carrier network. This is a huge issue, as a lot of users still don’t have unlimited data, and if an app is sucking data without them knowing it, it could be costing them a fortune, let along putting an anchor on the data performance of the operator’s network…”

“For the operators, the simplistic reality is that the bottom line is the bottom line, and they CANNOT allow applications to either 1) raise their costs structures or 2) damage their brand/customer base, because when things go wrong with an application or phone, people blame the operator. Every piece of research I have seen (or conducted) over the past decade makes that point clear. And just why do operators need to protect their network? A few months ago, I saw a CEO of a major operator speak. In the Q&A, he mentioned as an answer to a question that it costs him a minimum of $8 per phone call to answer a support call. That’s not counting the pissed off customer factor and dilution of the brand that he’s spent billions of dollars or euros building…”

“At a recent developers conference, an operator was telling a story of a section of a city where service parameters all went to hell, cells shrinking, customers losing service. They tracked it back to an enterprise customer that had gotten permission to test a new piece of hardware, and that hardware was causing nasty network effects. Bad. Another example, not as brutal, is when several applications that, when I asked about some trial metrics, with persistence (or even no persistence but frequent network access) were impeding customers’ ability to make or receive voice calls. Very bad, again — something operators just ain’t gonna allow because when these things start to happen, customers are going to look down at their phone, look at the logo on the phone, and get pissed at their operator. And pissed off customers churn. And churn makes operators’ metrics look bad. And bad metrics make financial markets unhappy. And unhappy financial markets make operator executives lose their jobs. So it just won’t happen.”

In between the paragraphs I’ve quoted, there’s lots more interesting analysis. There’s no easy answer, Jeffrey suggests, except for some first-class development work by applications providers, who need to take the time to understand the special complications of mobile. Applications won’t be tolerated on the network, even with the label “Open”, if they are in reality only beta quality (or “pre-beta”), and risk significant network and support costs.

Is that the end of the story? Unfortunately, there is one more twist. Application developers often perceive that network operators have an additional motivation, lying behind their defensible motivation to preserve the quality of the network. That additional motivation is less defensible: it’s to block the kind of innovative services that could divert some of the network operator’s highly valued revenues to alternative services. Presumably that’s part of the reason why network operators appear to dislike open phones that support wireless VoIP.

That looks like another issue for which there’s no easy answer. It’s an issue that transcends mobile operating systems.

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12 Comments »

  1. There’s a little more to the ambivalence shown to operators. It isn’t just trying to do deals with them that upsets people, it’s the complete control they exercise over everything – killing Java APIs dead, for example, so apps can’t access the user’s phone book or (on some US operators) even access HTTP – even if the user gives permission.

    If their networks are really so poor and so incapable of prioritising different types of network traffic, then it is understandable that they might want to kill the mobile web and networked applications to preserve their voice cash cow. It does seem like bad design though, and that certainly isn’t something they tend to communicate when they suggest that data revenues will increase and there’s a bright ARPU future ahead as they rise whilst voice revenues fall.

    Certainly there are plenty of developers out there who don’t understand the medium they are working in, and it is again understandable that oeprators don’t want association with bad practices etc, but I still struggle to see why that justifies the revenue share cuts on premium SMS, say.

    There’s a reason why DoCoMo created the only really vibrant mobile ecosystem in the world, and it wasn’t through a closed network with low developer revenue shares.

    I am sure good people work at operators – I’ve met many. I am certain that operators do not get the credit they deserve for operating a technically challenging job. The vast porofits the well managed operators make should hopefully cushion that unfair blow somewhat. However they shouldn’t be excused for the numerous poor and self-destructive practices that they do indulge in.

    Comment by raddedas — 27 August 2008 @ 5:01 pm

  2. There’s a little more to the ambivalence shown to operators. It isn’t just trying to do deals with them that upsets people, it’s the complete control they exercise over everything – killing Java APIs dead, for example, so apps can’t access the user’s phone book or (on some US operators) even access HTTP – even if the user gives permission.

    If their networks are really so poor and so incapable of prioritising different types of network traffic, then it is understandable that they might want to kill the mobile web and networked applications to preserve their voice cash cow. It does seem like bad design though, and that certainly isn’t something they tend to communicate when they suggest that data revenues will increase and there’s a bright ARPU future ahead as they rise whilst voice revenues fall.

    Certainly there are plenty of developers out there who don’t understand the medium they are working in, and it is again understandable that oeprators don’t want association with bad practices etc, but I still struggle to see why that justifies the revenue share cuts on premium SMS, say.

    There’s a reason why DoCoMo created the only really vibrant mobile ecosystem in the world, and it wasn’t through a closed network with low developer revenue shares.

    I am sure good people work at operators – I’ve met many. I am certain that operators do not get the credit they deserve for operating a technically challenging job. The vast porofits the well managed operators make should hopefully cushion that unfair blow somewhat. However they shouldn’t be excused for the numerous poor and self-destructive practices that they do indulge in.

    Comment by raddedas — 27 August 2008 @ 5:01 pm

  3. Whatever the problem is, that prevents open innovation: solve it. Heck, you are multi-billion dollar companies. Don’t tell us weird stories that no one believes…

    Solve it or somebody else will do it, sooner or later…

    Comment by Alexander Marktl — 27 August 2008 @ 6:30 pm

  4. Whatever the problem is, that prevents open innovation: solve it. Heck, you are multi-billion dollar companies. Don’t tell us weird stories that no one believes…

    Solve it or somebody else will do it, sooner or later…

    Comment by Alexander Marktl — 27 August 2008 @ 6:30 pm

  5. Hi Alexander,

    >"Don't tell us weird stories that no one believes…"

    What do you mean? Are you saying no one should believe the examples I quoted from Jeffrey Belk, where mobile applications or new hardware caused problems to networks? That reminds me of an ostrich, hiding its head in the sand. I don’t have first-hand knowledge of the particular examples I passed on, but I have heard about plenty of similar examples (from sources I know and trust) over the years.

    >Whatever the problem is, that prevents open innovation: solve it. Heck, you are multi-billion dollar companies. …Solve it or somebody else will do it, sooner or later…

    Heck, I can give a simple-sounding solution to the problem of open innovation. Soundbite ahead: The Symbian Foundation can become a vehicle for unprecedented collaboration between the different parts of the mobile value chain, building on the wide support we’re already receiving from handset manufacturers, network operators, silicon providers, application developers, and so on. This wave of good will, working in alignment with bodies like OMTP, the OMA, and W3C (and maybe even in partnership with, say, LiMo and the OHA), can ensure proper and deep solutions are found to the blockages to successful open innovation.

    That’s the big vision. But the actual solution to the individual problems will require, first, taking the time to understand the issues – moving beyond scape-goating. It’s my hope that my postings in this blog can contribute, step by step, to an improved shared understanding.

    // dw2-0

    Comment by David Wood — 27 August 2008 @ 8:20 pm

  6. Hi Alexander,

    >"Don't tell us weird stories that no one believes…"

    What do you mean? Are you saying no one should believe the examples I quoted from Jeffrey Belk, where mobile applications or new hardware caused problems to networks? That reminds me of an ostrich, hiding its head in the sand. I don’t have first-hand knowledge of the particular examples I passed on, but I have heard about plenty of similar examples (from sources I know and trust) over the years.

    >Whatever the problem is, that prevents open innovation: solve it. Heck, you are multi-billion dollar companies. …Solve it or somebody else will do it, sooner or later…

    Heck, I can give a simple-sounding solution to the problem of open innovation. Soundbite ahead: The Symbian Foundation can become a vehicle for unprecedented collaboration between the different parts of the mobile value chain, building on the wide support we’re already receiving from handset manufacturers, network operators, silicon providers, application developers, and so on. This wave of good will, working in alignment with bodies like OMTP, the OMA, and W3C (and maybe even in partnership with, say, LiMo and the OHA), can ensure proper and deep solutions are found to the blockages to successful open innovation.

    That’s the big vision. But the actual solution to the individual problems will require, first, taking the time to understand the issues – moving beyond scape-goating. It’s my hope that my postings in this blog can contribute, step by step, to an improved shared understanding.

    // dw2-0

    Comment by David Wood — 27 August 2008 @ 8:20 pm

  7. I do have some sympathy for the operators but a better balance needs to be found if the mobile apps market is ever going to take off.

    One key thing I think is wrong in the interesting article you’ve linked is that Open does equal Beta, not in the sense that all open platforms and open software are beta quality but that perpetual beta and early release of software are an essential part of the open development model.

    The thing that needs to be solved is a mechanism by which the end users that choose to access this early stage software and participate in the beta take responsibility for doing so. Of course they already do take such responsibility but it needs to be formalized to give the operators confidence that:
    a) The distribution of such software is limited to appropriately techno-savvy users (self-selection my be involved here).
    b) It is clear to anyone installing the software that it is a beta.
    c) The software has been tested to ensure it won’t negatively impact the network.
    The combination of the above allowing:
    d) The operators won’t get lots of additional support calls.

    Obviously Symbian Signed and Open Signed are the Symbian version of a solution to this for applications but I’ve argued elsewhere that they don’t provide a complete solution (being too stringent in some areas and no longer stringent enough in others). However, it’s more of a solution than any other platform has at this point.

    Comment by m_p_wilcox — 1 September 2008 @ 2:42 pm

  8. I do have some sympathy for the operators but a better balance needs to be found if the mobile apps market is ever going to take off.

    One key thing I think is wrong in the interesting article you’ve linked is that Open does equal Beta, not in the sense that all open platforms and open software are beta quality but that perpetual beta and early release of software are an essential part of the open development model.

    The thing that needs to be solved is a mechanism by which the end users that choose to access this early stage software and participate in the beta take responsibility for doing so. Of course they already do take such responsibility but it needs to be formalized to give the operators confidence that:
    a) The distribution of such software is limited to appropriately techno-savvy users (self-selection my be involved here).
    b) It is clear to anyone installing the software that it is a beta.
    c) The software has been tested to ensure it won’t negatively impact the network.
    The combination of the above allowing:
    d) The operators won’t get lots of additional support calls.

    Obviously Symbian Signed and Open Signed are the Symbian version of a solution to this for applications but I’ve argued elsewhere that they don’t provide a complete solution (being too stringent in some areas and no longer stringent enough in others). However, it’s more of a solution than any other platform has at this point.

    Comment by m_p_wilcox — 1 September 2008 @ 2:42 pm

  9. Hi Mark,

    >The thing that needs to be solved is a mechanism by which the end users that choose to access this early stage software and participate in the beta take responsibility for doing so. Of course they already do take such responsibility but it needs to be formalized to give the operators confidence that:
    a) The distribution of such software is limited to appropriately techno-savvy users (self-selection my be involved here).
    b) It is clear to anyone installing the software that it is a beta.
    c) The software has been tested to ensure it won't negatively impact the network.
    The combination of the above allowing:
    d) The operators won't get lots of additional support calls.

    Yes, this sounds convincing.

    >Obviously Symbian Signed and Open Signed are the Symbian version of a solution to this for applications but I've argued elsewhere that they don't provide a complete solution (being too stringent in some areas and no longer stringent enough in others).

    When you say “elsewhere” do you mean here?

    I can see there’s been some good discussion following that posting. Do you have any more thoughts you’d like to add?

    // dw2-0

    Comment by David Wood — 1 September 2008 @ 4:06 pm

  10. Hi Mark,

    >The thing that needs to be solved is a mechanism by which the end users that choose to access this early stage software and participate in the beta take responsibility for doing so. Of course they already do take such responsibility but it needs to be formalized to give the operators confidence that:
    a) The distribution of such software is limited to appropriately techno-savvy users (self-selection my be involved here).
    b) It is clear to anyone installing the software that it is a beta.
    c) The software has been tested to ensure it won't negatively impact the network.
    The combination of the above allowing:
    d) The operators won't get lots of additional support calls.

    Yes, this sounds convincing.

    >Obviously Symbian Signed and Open Signed are the Symbian version of a solution to this for applications but I've argued elsewhere that they don't provide a complete solution (being too stringent in some areas and no longer stringent enough in others).

    When you say “elsewhere” do you mean here?

    I can see there’s been some good discussion following that posting. Do you have any more thoughts you’d like to add?

    // dw2-0

    Comment by David Wood — 1 September 2008 @ 4:06 pm

  11. Hi David,

    Yes, that’s me ranting about it! 🙂

    Generally I believe the operator’s concerns are a little over the top. Not that very poorly designed software isn’t out there but that it’s level of use is extremely low. They see the support calls multiplying with explosive growth of add-on software use but I think that until the industry matures a little and learns to deliver stuff that “just works” then this growth isn’t going to happen anyway.

    I’m not sure exactly how we acheive a better balance at the moment. Currently the strategy seems to be gradually relaxing the barriers and downgrading the sensitivity of capabilities until someone notices a problem.

    I guess I’d like to see things sorted out faster but perhaps I’m just impatient! Also in some cases I think the baby is being thrown out with the bath water. Capabilities like ProtServ and PowerMgmt should never have been made available for OpenSigned Online and Express Signing, it opens the door for malware a little too wide.

    Comment by m_p_wilcox — 1 September 2008 @ 4:54 pm

  12. Hi David,

    Yes, that’s me ranting about it! 🙂

    Generally I believe the operator’s concerns are a little over the top. Not that very poorly designed software isn’t out there but that it’s level of use is extremely low. They see the support calls multiplying with explosive growth of add-on software use but I think that until the industry matures a little and learns to deliver stuff that “just works” then this growth isn’t going to happen anyway.

    I’m not sure exactly how we acheive a better balance at the moment. Currently the strategy seems to be gradually relaxing the barriers and downgrading the sensitivity of capabilities until someone notices a problem.

    I guess I’d like to see things sorted out faster but perhaps I’m just impatient! Also in some cases I think the baby is being thrown out with the bath water. Capabilities like ProtServ and PowerMgmt should never have been made available for OpenSigned Online and Express Signing, it opens the door for malware a little too wide.

    Comment by m_p_wilcox — 1 September 2008 @ 4:54 pm


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