It is a time for the carriers to take stock of their assets and the world around them to re-position themselves for the next growth spurt in digital technology.
One consequence of a massive-networked world is that devices need no longer be self-contained. They can physically reside in one location, their associated data can reside in another, and their controls can reside in a third. We at Accenture have termed this phenomenon Trivergence .
The Apple iPod, with its links to iTunes and its PC- or Mac-based controls -- which we call a "Smart Panel" -- is one of the earliest examples of Trivergence. Other examples are a new Kodak camera that automatically dumps its images to the user's PC when passing a wireless hotspot; Medtronic's latest pacemaker that sends live heart data to a website; and a Korean appliance maker that lets owners control their washing machine from the Internet.
Unfortunately, the wireless carriers have been slow to adopt Trivergence. One way they could deal with the complexity of their service is to replicate the cellphone's controls on a web-based Smart Panel that lets users manage their contact lists, set features, manage stored messages and photographs, purchase content, etc. The larger and more capable browser interface would do much to clarify and to enhance the user experience. We know, because Accenture's Innovation Center mocked up a Smart Panel of this type and almost everyone in the focus groups wanted one immediately -- some even offering to pay for it!
Our work in Trivergence has revealed an important insight: It is not so much about the devices, networks, applications and services themselves, as it is about managing the devices, networks, applications and services.
This insight leads us to a new opportunity for wireless carriers -- one that will put them at the center of innovation instead of accelerating their retreat into their walled gardens.
Step one is to build out something akin to the Smart Panel we mocked up in our labs specific to the cellphone. Step two is to position the cellphone in conjunction with the PC as the Universal Smart Panel. That is, a system that can be used to control any networked device and -- ultimately -- to orchestrate functionality across devices.
For example, if your car has GPS and your home air conditioner is networked, your car should be able to adjust the temperature when you get close to home. Likewise, if you bought viewing rights to a movie, you should be able to view it anywhere and on any device.
The strength of the cellphone/PC combo is that both devices are nearly ubiquitous. The cellphone provides instant access from almost anywhere, and the PC provides a sit-down setting for more complicated or more leisurely tasks.
The technical underpinning of the Universal Smart Panel is a Services Delivery Platform (SDP). This network-resident system knows who its users are (authentication), knows their location (presence), and knows what devices, applications, and services they own or have rights to (asset management). It also is a place where users can control who gets what information about them (identity management), make payments (billing system), and store their most sensitive data (secure network).
Google provides an example of a SDP that -- in its case -- is designed to give users access to "all the world's knowledge." You put in a query and you get the information. You can then use this information to feed into some other service or application. For example, overlay Google's maps onto a real-estate listing service.
Google's core asset is the algorithms it uses to make information accessible and meaningful. In contrast, the wireless carriers' core asset is the BSS/OSS systems that they have developed to operate their networks and serve their subscribers. Traditionally these systems have been thought of as cost centers and necessary evils. However, they provide a foundation for the SDP that we see as the carriers' future. Much of the functionality we described for the SDP already exists in nascent form within BSS/OSS systems. Now it is a matter of enhancing these services and exposing them to new applications through the use of Web services.
Technically, the SDP that we are proposing is not that different from the SDPs that carriers now have on their drawing boards. However, there is a very important philosophical difference between where the carriers are headed and where we think they should be headed.
Wireless carriers give every indication that they are still holding on to the idea of a closed end-to-end system. They see the SDP as an opportunity to lock in their subscribers and to control the user experience by running all third-party applications, services and content through their proprietary environment where they get a piece of the action. In other words, an extension of the ring tone business model that gave the carriers a windfall during the early years of the wireless explosion.
But the market is larger and much more sophisticated now. To avoid being beholden to the carriers, innovators are devising strategies to bypass them on every front. The carriers have responded to this challenging situation by threatening to impose performance penalties on companies that do not play by their rules. In our judgement, actions of this type will only further marginalize the industry.
The SDP we are proposing is an open environment that features a “carrot” rather than a “stick” a the core of its business model. It makes the carriers money by providing services that third-parties would have to otherwise develop on their own – at higher cost. For example, the carrier might charge a nickel or a dime to use their authentication feature. The same for identify management, asset management, presence, and other SDP components.
This is a win/win/win situation. Users win because they get a secure control point where they can manage and orchestrate their devices, applications, and services. The providers of these devices, applications, and services win because they can take advantage of a robust ecosystem that already has many of the building blocks they need for their offerings. And the carriers win because they will be compensated for providing a feature-rich platform that welcomes all comers – thereby benefiting from the network effect where value increases with usage.
To summarize: Carriers are reaching he end of the road with the their proprietary end-to-end wireless business. They must now move on the solve the new problems brought about by the success of their first-generation offerings. That is, simply and enhance the user experience in an environment where there are billions of stand-alone networked devices, applications and services that don't easily talk to one another. Some sort of universal control device is needed and the wireless carriers are extremely well positioned to cobble this Universal Smart Panel from their existing mobile handset, Web portal, and BSS/OSS assets.
About the Author:
Andy Zimmerman is managing partner—communication industry segment—and leads our strategy practice for Accenture's Communications, High Technology sector, Americas East.
Prior to joining Accenture, Andy Zimmerman was Chief Executive Officer of Predictive Systems, a network and security consulting and information services company headquartered in New York City . Predictive Systems, founded in 1995, was a public company (NASDAQ—PRDS) with approximately $60 million in revenue in 2002 and its significant investors include General Atlantic Partners, SAIC, Cisco and Bellsouth. He joined the company in July 2001, replacing the founder and CEO.
