Thursday, 11 November 2010

My presentation on M2M at Telco2.0 and my impression of the conference

Tuesday and Wednesday I was at the Telco 2.0 conference in London organised by STL. I was an invited speaker on the M2M track on Wednesday morning. Like many of you, I know the Telco 2.0 blog and knew of the conferences. Good friends in this community, like James Enck were on stage there before me. Other friends in this community stood at the basis of the Telco 2.0 ideas. So I was quite happy to be invited to the event.

Telco 2.0 on M2M
My presentation was part of the dedicated M2M track. Not all the attendants were there, but only those interested in M2M. The crowd was treated with a series of presentation from carriers and various forms of system integrators and suppliers.

What I found interesting in the telco presentations was, what they were and weren't about. What they weren't about is what their customers were doing and the problems that these customers were facing. What they were about is, potential use cases, the organisation of the telco's M2M unit and how it was embedded in the organisation and the design of the M2M platform. The whole reasoning was supply driven. Build it and they will have to come. As someone had warned a while ago, most telco diagrams of a problem start with their network in the upper left part of the page and the customer in the lower right part of the page. This is true. It also shows where their focus is; themselves, not their customer.

The difference between the telco's wasn't too great. Orange seems to go for a more fully integrated solution, where they will deliver the network, the platform and all sorts of other devices. Telenor has a dedicated group for M2M networking solutions, called Connexion and another group Objects that focus on service enablement, regardless of the network. So Connexion can sell to the whole market without involving Objects and vice versa.

Most of the presentations were at least of a decent quality and sometimes quite better. It deserves metntioning, because often this is different. However, the feeling these presentations give me in retrospect, is that of enormous budgets and very little idea of what the customer is looking for. This idea came from a remark by a quite brilliant and quiet Eastern European financial controller of a mobile telco, who remarked privately that his company just didn't have the size and the budgets necessary for such a platform, certainly given the 5 euro max revenue/month per SIM. This remark is so incredibly true. The large behemoths of European Telecoms are still swimming in the free cash flow. Free cash flow that is supposed to do something and might as well be spend on M2M. Running after every hype in the business, including M2M is not so much a necessity as it is a luxury.

The interactive format of Telco2.0 also means there was quite some feedback from the room, through instant polls. What it showed was that the audience was effectively split over the idea whether mobile telcos have a larger role to play  in the M2M ecosystem.

My presentation on how M2M customers becoming MVNO's
 I gave a presentation called "Your M2M customer wants to be MVNO". In generally the audience quite liked it. They thought it was thought provoking. I do think it was the most referenced presentation during the day. Both the facilitator and the speakers quite often referred to Rudolf or Logica. This was of course nice for my ego. I really focussed on the 4 central business problems and why becoming an MVNO was a solution.

What was also quite clear is that the industry really doesn't want to hear what I had to tell. The idea that a large scale M2M user is going to become a wholesale customer of the telco is just not done. There were some interesting comments why not:
  1. It is all about money and prices are coming down. If the price is low enough, the customer doesn't need freedom, flexibility and innovation. 
  2. It is too complex to run an MVNO (so let an MNE or Ericsson run it. Ericsson already runs most telcos)
  3. Lock-in is everywhere, so why not with a telco? (Because people only accept a lock-in if it is because of network effects, not because of market power)
  4. This cannot happen, because we need to make a return on our platform
  5. This cannot happen, because competition would kill margins and then the industry would be very badly off. 
The best argument against my presentation was given to me in private by a large telco. The reason we can't have private M2M MVNO's now, is because otherwise all the budgets of telco M2M plans would be killed by the executive board. Private M2M MVNO's could happen in three years, when the initial investments in M2M platforms have been done.

There were also some quite positive reactions to my presentation. Certainly those that represented large scale users (they were scarce but present) were very positive about the content of the presentation.

My impression of the Telco 2.0 conference
Last year november I spoke at Ecomm on how all telecom marketing and product management is wrong. Now I spoke about a different but also controversial subject. What was interesting was the difference in audience and their reactions. The Ecomm audience is you, hip and happening. The cluelevel of the conference is high. Unfortunately most of those attending are not of such a level yet, that they can actually implement their vision. What a difference with the Telco2.0 conference. The power level of the attendants is high. Proper CTO's, Vice Presidents, Heads. Those that can say: "Make it so".

The difference shows up in the way the problems are discussed. For the Ecomm crowd a problem is a problem. It is something that needs to be solved and removed. For the Telco2 crowd a problem is either a business opportunity or Somebody Elses Problem. And with the amount of money sloshing around in the industry, almost every problem is attacked to see if it can generate more money. If it cannot generate money, it's somebody elses problem.

The harsh reality is that those high level execs attending are grasping at every straw to see if it will generate some yield. This was clear from the discussion of clouds. Every major telco thought they were going to be big and uniquely positioned for clouds. After a while I asked out of desperation, how the assembled telcos thought to solve a very basic problem, namely getting the right people to build their cloud. You see, Amazon and Google are now sponsoring university courses in cloud computing, because finding the right people is hard. I didn't see telcos finding a person like Vijay Gill or Werner Vogels, let alone a team of them. This was well answered by Oracle, who came with a promise, that they would provide the products that could be a building block for a generic telco cloud. I personally would more expect Oracle to build it's own cloud, which it would then resell through telcos, But who am I ;-)c

And that brings me to my last bit. Who was I at the conference? I probably was a bit the court jester. The outspoken guy who challenges firm beliefs of the industry. It wasn't just clouds or M2M that I challenged the current opinions. I also got in a small verbal fight with a network vendor trying to push QoS as a solution. I've never been able to understand why anyone would use the argument: You're only right on the past 15 years, the next 3 years will prove that QoS is necessary for wireless. I was the weird guy who promoted happy pipes and mentioned Pareto distributions as the reason why we have bandwidth hogs. I don't know whether that makes me a good consultant, or just a good analyst. A good consultant seems to profit from his customer's mistake. An analyst just gives the problems and solutions as is. Keeping that in mind, I've agreed to become an analyst at the OECD in Paris in the coming year, working on M2M, peering and transit and some other stuff.

All in all great conference. Thanks to STL for having me and I hope to be back in the future.

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