My pipes runneth over

My brain is certainly running over after the fascinating conferences of the past three weeks, and I increasingly feel like I'm ten steps behind where I should be. This post is an attempt to partially catch up, and the plan is to also write something more structured on takeaways from the conferences on the Telco 2.0 blog. So, without further ado, here are some thoughts around vaguely connected themes. 

Telco 2.0 event - I believe there is going to be an official Telco 2.0 post on highlights from the conference a couple of weeks back, so I won't attempt to reinvent the flywheel here. However, as I stated in one of my presentations at the conference, from a purely personal perspective as the one who delivered the very first presentation at a Telco 2.0 event, it's encouraging to see just how far the industry has come in its thinking since the first event, but I was also struck by the recognition that we have an awful long way to go yet. 

There is strong anecdotal evidence to suggest that a number of telcos now have teams dedicated to exploring and developing Telco 2.0 themes suited to their individual situations, which is great. On the other hand, while it seems that the industry has grasped and internalized the theory, it is in the process of looking at the practicalities of making this stuff work in real life where reality becomes significantly more complicated. Much of the discussion at the conference revolved around identifying, analysing and exploiting the valuable metadata around telecom services - i.e., the metaphorical wood shavings from the process of delivering connectivity, voice and data, which heretofore have fallen to the workshop floor and been swept away. The central problem, it seems to me, is that telcos have never regarded this data as important beyond the purely operational level, and probably haven't given much thought, until now, to the possibility that someone else might find it highly instructive, let alone to how to make it a usable resource. Which is why the analytics and behavioral targeting industries are the domains of very different companies. Nevertheless, the giants have awoken, but now have to grapple with all the technological and cultural aspects of making this come together, which is not a trivial undertaking. One innovative company in the data management space which I spoke to recently said, when asked about key competitors, that their biggest hurdle is typically not "competitors" but telco IT departments, because they are either distracted, threatened, or both, by the prospect of something which cuts across data silos (and presumably knocks down the gate which they get paid to keep). However, that's precisely what's needed, and fast, as Werner Vogels' presentation seemed to underline, to the dismay of the audience. 

Monaco Media Forum - Overall, I thought the MMF conference was pretty amazing, though I'm told by those who attended last year that things seem to be moving in a more obviously corporate direction (high impact sponsorship, a few fairly blatant company pitches, etc.), though I guess this is the inevitable product of the success of an event such as this one. In any event, the hosts and sponsors did a great job and were very generous with their hospitality, and the content was of a very high caliber. One thing which impressed me about this event was the high ratio of presenters/panelists/moderators to audience. In other words, an awful lot of people in the audience appear onstage at some point, which is refreshing and seems to get people really engaged in networking during the breaks, as the gulf between audience and messenger is narrowed. My only criticism would be that it seemed like the pent-up energy from the sessions was stifled somewhat by having lunch on both days as a structured event with presentations the delegates were obliged to listen to, when what they obviously wanted to do was get to know one another better. Apart from that, I think the content was top-notch on the whole, and I gave a few examples here. I would encourage you to trawl the YouTube archive for the MMF videos, as most are very much worth the effort. 

In terms of overall themes, it struck me that there were a number of parallels with our beloved telecom industry. One moderator of a break-out session (this is another criticism - I think the breakout is dead. Most parts of the technology value chain touch on many/all others these days, so it is likely that many/most delegates will be interested in everything, so why make them choose, particularly if the other sessions are all covered by Chatham House Rules? Otherwise, please stop using the word "convergence".) related his experience at a media conference the preceding week, in which, during the breaks, the traditional media people stood in one corner, while the internet hipsters stood in another, with a vast DMZ in between. This is ironic, as the clear message from this conference (and generally from Telco 2.0) is that both camps need each other, and can each benefit from the other's complementary assets/skills. Afterall, despite the premature predictions of demise for a range of "traditional" media, all still hang on and occasionally surprise (please see Jeff Cole's fascinating talk). What most have in common is a shrinking revenue base, commonly described at this event as "swapping analogue/print dollars for digital pennies," but most survive, at least for now. The challenge is in aligning structure, culture and costs with the reality of the situation, and also in defining what their real strengths are and finding ways to harness the internet to remain relevant and interesting (James Murdoch's interview has some interesting examples, as does Avinash Kaushik's presentation - I 

particularly like his statements on the need to move from the offline/online schism to a concept of "nonline."). Surely this is a highly relevant message for telcos. 

OFCOM conference - I only attended day one, which unfortunately ended with an evacuation of the Bloomberg building (as happened on my last visit), but it was also a very impressive event from the standpoint of content and quality of presenters - though again the breakout bias in the afternoon worked against the audience, I felt. I was particularly impressed by Vittorio Colao (both of whose names were misspelled on the delegate list - what the hell, he's only the CEO of Vodafone...), whose message about the historical "misunderestimation" of mobile uptake rates and its implications for current conservative views of the potential of mobile data resonates strongly with someone who just got his hands on an HTC Touch HD handset. There was a lot of discussion throughout the event of the broadband incentive issue, with some (in my view) rather loose statements apparently endorsing the Olivennes graduated response approach - every time I hear this view spouted by executives from the content world, I think, "Be careful what you wish for." 

Other interesting discussions revolved around the increasingly localized nature of regulation, which leads me to speculate that incumbents in Europe may over time opt to divest certain local access businesses - potentially putting them in the hands of players who can deliver something very different from the status quo. Perhaps the most interesting part of the conference for me occurred during the NGA breakout, when a delegate from Singapore stood up to discuss the open network project there. He volunteered that monthly wholesale pricing at layer one is $9, and that retail pricing for 1Gbps symmetrical service should be in the neighborhood of $25 per month - needless to say, this is intensely inspiring, but also depressing, for the average European resident. I heard some rather optimistic views during a coffee break about how the proceeds from spectrum auctions in the UK might serve as a "digital dividend" to counter my pessimism over NGA funding prospects, but frankly, I'll believe it when I see it, given all the other pressures on national finances. 

Moving on from the conferences, a Platinum Club mega-uber value reader takes me to task a bit over my piece for OFCOM, suggesting that I could have been a bit more positive and discussed "safe harbor" funding structures such as the one employed by Amsterdam in its metro fiber project. I agree wholeheartedly, but I was trying to be controversial, and in any event, my sense is that the debate in the UK hasn't even reached this level yet, sadly. Even if it had, there are structural and timing issues which make this a very different kettle of pickled herring: the absence in the UK of entrepreneurial capital (with the possible exception of Redstone) focused on NGA (the Netherlands has been fortunate to have Dik Wessels - and let's remember that he has owned and understands construction/civil engineering businesses), and the state of the capital markets (appalling now, versus bouyant at the time of the Amsterdam project investment) make the prospects fairly depressing for the UK. The Singaporean delegate to the OFCOM conference referred to above made a haunting statement, to the effect that any incumbent which remains wedded to its copper network over the next five years faces a very nasty surprise. I strongly suspect this will be true, probably sooner than five years, but I have to admit that, having seen the UK response to infrastructure issues in transport, for example, I am not encouraged. 

Elsewhere, in the miscellany department:

Akamai layoffs - I guess telcos should be somewhat concerned about their nascent content distribution aspirations when a relatively lean and mean player in the space, with 70% global market share, starts to shed staff despite ostensibly being the key beneficiary of the content explosion. This seems to underline just how brutal the CDN space has become - tread carefully.

A friend pinged me on Friday to call my attention to Todd Underwood's final post for Renesys, and it's a fairly downbeat one, though I can't find any reason to disagree with his points.

Finally, on a positive note, I understand my friends over at VoiceSage are getting some pretty serious customer traction, well done guys!