First post - First draft of an article for CircleID - feedback welcome

[David Farber <dave () farber net>]

Begin forwarded message:

From: "Lee Dryburgh" <dryburghl () gmail com>
Date: February 12, 2008 7:36:58 AM EST
To: dfarber () cs cmu edu
Subject: First post - First draft of an article for CircleID -  
feedback welcome

David, would it be OK to post this to list? (my first post)


----
This morning I write a draft piece for CircleID. It is a first draft
so may change considerably. Feedback most appreciated:


Why eComm? Part 1: Telecom Frustration
A lot of people have asked me what the motivation for giving up 5
months of my time (at seven days per week) towards the creation of the
new Emerging Communications (eComm) conference taking place next month
(see www.eCommMedia.com). It certainly was not money. Being the
leading authority on the telecom signaling system #7 (SS7) and the
fact that SS7 empowers 99% of telecom services out there including
telephony, SMS and mobility, I do quite nicely! Furthermore the
conference hope is to break even on raw costs excluding my time.

So why would I drop full-time telecom consulting fees around SS7 and
spend the next five months working much harder and for free? One word
– "frustration". A frustration so large I had to find a channel for
it. And I know I am not the only one, so we are building this thing
together.

Let me just get in right about it and explain the situation in a
in-your-face type of way. The telecom industry has been full of
bullshit in respect to services for far too long. In fact "telecom
services" is now an oxymoron. They don't exist and probably never will
exist. The only service is telephony and by a large stroke of luck for
operators, short messaging service (SMS). I'm a technology expert (at
the bits n bytes level) of both these services and it is clear to me,
they will not be my cash cow longer term.

Operators have offered "naked" voice transport for over 100 years. By
naked I mean it stands alone; is not wrapped up with anything else.
Such a service is dead longer term because the consumer cost of such a
service will become zero or near-zero. In fact long term this service
will cease to exist. Voice will become embedded, wrapped, and an
adjunct to other modes of communication, content sharing and
"commerce". I'd start looking to erase the word "telephony" from
common vocabulary. The other service operator's offer which brings in
serious revenue is SMS which far from being constructed by marketing
departments was a case of user's leading. The service was appended to
the GSM specs by engineers and there was no charge for it because
operators did not foresee people using their thumbs to construct short
messages as opposed to calling. But SMS long term will be swallowed by
instant messaging and therefore effectively free.

There is some degree of realization within the industry of the
approaching tsunami so operators for nearly a decade have responded to
shareholders with the mantra that they will replace lost revenue with
new services. Such sounds are wonderful taken at face value but the
fact is that for the past ten years they have not been able to name a
single credible new service! In fact if you speak to top telecom
executives you are often left wondering if you are in Alice in
Wonderland because the disconnect between them and in particular their
younger customers is so stark. I will confide and say yes there is a
chance that another unexpected "SMS" is born, but I'll not be hedging
by career bets on it.
For at least the past five years the telecom conference
Death-by-PowerPoint slides have focused on these new service areas as
their new cash cows:

•       IMS
•       NGN
•       Triple-Play
•       mobile TV
•       FMC
•       ENUM
•       VoIP

And you know what? They all suck. Yeah there may be some limited value
points in each, but it does not even begin to tackle the loss of
revenue from the disappearance of telephony (or if you don't accept
that, the trend towards free) and SMS.

There are people out there who get passionately heated when I tell
them one or more of these services suck. But let's get real for a
change. Get off the engineer for the sake of engineering train that
the standard's bodies booked you on. Ask yourself this – where do you
see consumer attention going? Attention is the scarcity we are
battling for going forwards. It is NOT and WILL NOT drift to the above
services. Rather consumer attention is drifting increasingly towards
Internet based applications. The most contentious service above is
'VoIP'. VoIP never has had a business model. The VoIP we have
witnessed over the past ten years has only been plain old telephony
service replacement (aside from the introduction of Skype which was
mult-modal). Building a 130 year old paradigm over IP is NOT where
mass profit and opportunity is (witness Vonage).

My message to the telecoms industry is this – you have two services
today which are going to be taken away and the supply chain is
unlikely to feed you enough new sufficient ammunition to fight as
successfully into the new era. The question is now where to turn? For
the fast movers there is a fair chance to draft new business models.
For the rest, expect job losses and expect operator consolidation on
the horizon.

As for me, I see one heck of a lot of opportunity. I see fantastic
opportunity space and yet so completely ignored by operators. The
opportunity space may have more value in it than the present trillion
plus dollar market.

If you also realize also that your sat on the Titanic whilst others
around you are talking about re-arranging the deck chairs or your
interested in the opportunity space then come to eComm.

Note: I'll write a short piece giving some idea of the opportunity  
space, next.


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