Fortune iMeme: “Who Moves The Bits” Telecom Panel I’m at the Fortune iMeme conference in San Francisco, where now on stage is a panel on communications called “Who Moves The Bits?” Panelists include Louis D’Ambrosio, CEO of Avaya; Lisa Hook, CEO of SunRocket; Paul Jacobs, CEO of Qualcomm (QCOM), and Solomon Trujillo, CEO of Telstra, the Australian phone company. They are talking about [...]
I’m at the Fortune iMeme conference in San Francisco, where now on stage is a panel on communications called “Who Moves The Bits?” Panelists include Louis D’Ambrosio, CEO of Avaya; Lisa Hook, CEO of SunRocket; Paul Jacobs, CEO of Qualcomm (QCOM), and Solomon Trujillo, CEO of Telstra, the Australian phone company. They are talking about who will control the communications experience going forward: the legacy networks, applications providers, or someone else. Moderating is Fortune’s Stephanie Mehta.
Jacobs says we are in a transitory period; who will end up providing search on mobile phone, for instance - carriers, handset operators, Google…everyone is trying to drain value out of other people’s part of the value chain. Big opportunity to me - really inexpensive, functional devices, with high speed networks, combined with Web 2.0 platforms - that will fundamentally change the way a lot of computing is done in this world.
Trujillo says people are looking for people to simplifying the experience. Those who figure it out will win. not about roles, it is about who figure it out.
Hook says everyone is feeling their way; at one point it looked like the wireless companies were going to control the Intenet; we all climb into each others value chain over time and then come to their senses after spending a few billion dollars. Her point: despite overlapping roles, people try to move into adjacent businesses, then move back to their core competencies.
Trujillo seems not convinced by that assertion - you have to find things people are willing to buy and pay for, and create value for shareholders, and allow customers to stay with you. Telstra says people value being able to do things instantaneously - the question is how to extend capability. Telstra is launching site inside Second Life called Big Pond. Looking at ways to offer applications and services to market, some we develop, some we partner. No different than 10-20 years ago. Mostly moving with the market.
D’Ambrosio says 75% of Avaya’s R&D is now spent on software, but tied to communications. Embedding communications into applets; automating communications within a business process; do customers want one stop shopping? Fine line between simplicity of one-stop shopping and being held hostage. Customers are looking to buy the best solution; companies need to interact with broad ecosystem. You can’t own every level of the stack.
Hook says same is true with consumers - some people want one-stop shopping - but it is convenience driven, not price driven. (She runs a stand-alone VOIP company, so she better think that, dontcha think?)
Trujillo says he disagrees with Hook. Some segments want it packaged together, some segments don’t. He sees that from enterprise customers to consumer customers. You need to know the difference.
Trujillo is talking about iPhone, and the fact that it is on a 2G network; I don’t call that a real-time experience, he says. Now you can click on a site, can in Australis watch SkyNews Australia on a device in 3-5 seconds. If you want to download attachment, or watch TV program, it is now real time.
Jacobs says there are not a lot of layers slowing things down; put Web browser directly on the hardware and things run pretty darn fast.
Hook wonders: if there are three pipes into the home, doesn’t edge go to the application developer?
Jacobs says operator has lot of information on presence, location and other information.
Trujillo says PipeCo becomes PipeCo plus ServicesCo, and some applications. He says Hook asks an important question - real challenge is simplicity or complexity of experience. We don’t juts advertise network at 14.4 MB a second; we took on what has been my mantra…I’m a believer in a one-button, one-click kind of world. No log-ons, and multiple screen. To do search - in our case Yellow Search, our yellow pages business - with location based services - you can get maps and instructions on how to get to places in real time…It is about changing quickly, old dinosaur can move faster than most small companies; we have resources once they are commandeered to do the right thing.
During the Q&A, one of the attendees is noting the contrast in the notion of a platform between the previous panel, on Internet platforms, and the way the telcom companies look at this.
Trujillo says the days are over where you can tell customers what they can or can not have; but you can make it simpler for people. He says we think know what they want, but we are adaptive; if we need to partner with someone else who had something hot, I want to do that; he users the concept of supermarket end-caps for highlighting some kinds of services and applications.
D’Ambrosio says notion of platform is fuzzy; things move downward over time; platform continues to evolve unless rules of gravity change.
Jacobs says people are feeling these things out; there is caution on the part of some of the operators; AOL went to low flat-rate pricing and overwhelmed their networks; little bit more caution, but look around, they are doing deals with Internet players; Hutchison in Europe selling Skype and Slingboxes. T-Mobile is doing WiFi at home, inter-operability. Integration is where industry is really headed.
Trujillo says game changer is ubiquitous broadband - will be 40MB in Australia by 2009, and after that 1GB…even today, try making video call from wired to wireless call; today you can’t terminate that call. But he sees that changing - where anything you can do wired, you can do wirelessly.
Jacobs is ragging on WiMax - in Korea, only few thousand users. We will have broadband networks come out; in same way; ubiquity, mobility; people will use them on handset that is mobile; in the end, can business model work is the question.
Hook gets back to idea that the power is with the applications provider when you have more than one choice of service providers.
Microsoft’s Gary Flake is talking from the audience; he says Benioff said something interesting - that ownership of the meta data is important - difference between pipe and platform is data lock in - aspiring to open platform, but with some level of data lock in.
Jacobs responds: Cell phone contact list as precursor to social network; operator has private information about you; say position of your kids; they help you manage who has access to that information; go beyond that to health care information; who gets access to that kind of information; where they manage other information that is part of the network or devices, that is where you get that notion of platform.
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