Telecom Industry
The Convergence of Voice and Web 2.0
Zygmunt Lozinski, Telecom Industry Technical Leader, IBM
ITU The Future of Voice
Geneva 15-16 January 2007
1
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Abstract
 Voice services are the primary way that people communicate today. We are
seeing the emergence of new types of communication services:
–
instant messaging, social networks, blogging and wikis, location tracking.
 New software technologies are emerging that enable end users to combine
web based applications: these mash-ups are the basis of applications such
as Google Maps. This phenomenon is called Web 2.0.
 How will voice services and other services provided by the traditional
telecom operators and service providers be combined with the Web 2.0
world? There are two answers:
2
–
Operators need to define enablers using the principles of Service Oriented
Architecture so that their networks can fully participate in the Web 2.0 world.
–
Operators can also exploit the Web 2.0 technologies to create developer
ecosystems, and to support early adopters of their new communications services.
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Contents
 New Forms of Communications
 Web 2.0
 The Value of a Packet Network
 Software Platforms … Ecosystems … and Two Sided Markets
 Voice Networks at the Crossroads
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
New Forms of Communications
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Social Networking: MySpace
Social networking website including personal profiles, blogs,
photos, music and videos.
Open to all users
106M registered users [Sep 2006]
130M registered users [Dec 2006]
http://www.myspace.com/
 Founded July 2003
 Bought by New Corporation for $580M in July 2005
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Social Networking: Facebook
Social networking website including personal profiles, blogs,
photos, music and videos.
 Leave messages for friends.
www.facebook.com
 Now open to all users.
 Originally limited to university and college students
 12M registered users [Dec 2006]
 (of which 7.5M US university/college students)
 60% log in daily
 Founded Feb 2004
 Takeover speculation in press value Facebook at US $1B
 Revenue from banner Advertising
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Content Networking: Flickr
Social networking
website based around
digital photo sharing
 Open to all users.
 4M registered users
[Dec 2006]
 Mar 2005 – bought by
Yahoo
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Content Networking: YouTube
 Video sharing website
 Videos limited to 10 minutes
 Open to all users.
If priced sa: 
SMS – $4B pa 
Music-$20B pa
100M clips viewed daily [June 2006]
20M unique visitors per Month [NetNielsen, July 2006]
 average visit of 27mins [NetNielsen, July 2006]
 Went live end 2005
 Purchased by Google for US $1.65B [09 Oct 2006]
 Copyright and IPR debates
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Online Games: World of Warcraft
 Massive multiplayer role playing game (MMORG). Evolution
of computer based RPGs.
 3D virtual world
 Open to all users (paid memberships)
 US $13-15/month
 2 million players in North America (11 Jan 2007)
 more than 1.5 million players in Europe (11 Jan 2007)
 more than 3.5 million players in China (11 Jan 2007)
 Typical session 1 hour or longer
 Includes chat, presence and VoIP.
 An MMORG (Sony’s Everquest) was the first to attract
interest in the economics of virtual worlds
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Online Community: Second Life
3D virtual world, which enables residents to build content, and
to interact.
 Open to all users
 Free membership
 Premium membership US $ 9.95/month
 Virtual economy and market with L$ to US$ exchange rate
http://secondlife.com/
 2M registered users (active ? )
 20,000 simultaneous users
 Privately owned by Linden Labs
 Anshe Chung first RL millionaire. BW 01 May 2006
 Interest in business community:
– SL a platform for events: Circuit City, IBM, Sun, Reuters
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Usage of Social Networking
 The top 90 social networking sites claim membership between 4500
for WebBiographies and 130M for MySpace
 Active membership varies widely and is much harder to measure
– Anecdotal evidence suggests that many of the 12M FaceBook users
access FaceBook on a daily basis
 Total claimed membership:
– 90 sites; 570,091,460 members [Dec 2006]
 Issues of actual number of unique and active members
– Even assuming only 10% of registered users are active – 57M
 Interesting parallels with the levels of SMS usage around 1999-2000
 This is an important area for understanding and research
11
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Web 2.0
12
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
After: Tim O’Reilly, O’Reilly Publishing.
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
Source:IBM
TimCorporation
O’Reilly
© 2006,2007
Telecom Industry
The Web as a Platform
 New applications are being built on the “web operating system” and are
being designed to be combined.
 There are strong parallels between SOA componentisation and Web 2.0
componentisation
 Google Maps is the best known example
trafic.poly9.com is a mash-up of Google
Maps and Yahoo Traffic that shows traffic
incidents overlaid on a geographic map
The example shows several accidents on I95 in Miami. [Nov 2006]
 The implementation relies on Web Services
 How does communications fit with the Web as a Platform paradigm?
14
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Service Oriented Architecture
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Flexible business requires flexible IT
Full Business view
Process to optimize
Case Study: Payments Processing
Customer
Bank
Shared
Service
Bank 2 – “Supplier”
Outsourced
Creating IT flexibility
•Trends:
The re-engineering of business models (outsourcing, SSC)
The decomposition of business processes and IT systems
IBM SOA Foundation
Software
Skills &
Support
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
The Value of a Packet Network
18
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
The Value of a Packet Network
 Let us consider two packets (of similar value) traversing two very
different networks
Shanghai
London
Value
$ 3700
Value
$ 3000
Cost
$ 10
Cambridge
Cambridge
A passport sent by post using recorded delivery.
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
Cost
$ 30-50
A computer sent by air-freight
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
The Value of a Packet Network
London
Shanghai
--:-- Departed Shanghai
--:-- Arrived Schipol
Value
$ 3000
Value
$ 3700
--:-- Arrived London STN
--:-- In Customs
08:39 Released for Delivery
12:00 Where is my
passport and visa?
Cambridge
20
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
12:30 Delivered
Cambridge
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
The Value of a Packet Network
21
Postal Network
Logistic Network
Functional network
Platform
Designed to enable other services
Designed to integrate with SCM
Information from the network is
not available outside
Information insideTM
Market Cap:
 N/A
Market Cap:
FedEx $33,432 M (2007-01-09)
UPS: $79,910 M (2007-01-09)
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Software Platforms … Ecosystems … and Two Sided Markets
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Looking at a Successful Software Platform
End Users
Applications
Platform
Developer
Enablement
SDKs
Tools
Developer Networks
Developers
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Looking at a Successful Software Platform
End Users
820 million
Applications
>> 10,000
Platform
< 100
Developer
Enablement
~ 10
 $630M p.a.
 2000 people
 (1999)
SDKs
Tools
Developers
Developer Networks
~ 0.75c per customer
1-3 million
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
The Economics of Software Platforms
Microsoft Windows Sony Playstation
Price to end user
$100-$200
$100 subsidy
One-time charge for developer
$0
$25,000
Per-use royalty from developer
$0
$7
 Several business models have evolved around software platforms.
 The issue for the telecom industry is finding model(s) that work.
25
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Example from Sprint-Nextel Business Mobility Framework
Source: http://www.microsoft.com/Resources/Government/EventPresosArchive.aspx
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Gearworks: A Business Application Built on BMF
http://www.gearworks.com/
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
The Participants in the Extended “Telecom” Value Chain
Small
Business
Enterprise
Independent
Software
Key Participant
Location
Services
Enterprise
System
Integrator
Location
Services
Network
Operator
Key Participant
Network
Equipment
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Small
Business
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
Web Svcs Application
Gateway
Server
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
The Economics of Software Platforms (Revisited)
Microsoft
Windows
Sony
Playstation
Sprint Business
Mobility
Price to end user
$100-$200
$100 subsidy
$11.95 per
month
One-time charge for
developer
$0
$25,000
$0
Per-use royalty from
developer
$0
$7
$0
 Several business models have evolved around software platforms.
 The issue for the telecom industry is finding model(s) that work.
29
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Voice Networks at the Crossroads
30
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
THE
LEX
COLUMN
European telecoms
Looking for positives in European
telecoms is almost as hard as trying
to watch television using a 3G
handset.
[…]
Telecoms companies are in an
exquisite trap: the only thing the
market likes is their short-term cash
flow yields but in maintaining that
cash flow religiously, management
jeopardises corporate reinvention.
After three years in the doldrums, and
with consolidation still distant, there
is a growing sense that dying slowly,
but profitably, is not the way forward.
FINANCIAL TIMES
November 2006
31
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Drivers for Change
blogs
community
social networking
wiki
collaboration
57 million
new types of communication
instant Messaging
presence
Platforms
demographics virtual worlds developer ecosystems
software
components
software
Web 2.0 software components
components lasagne not spaghetti
mash-ups
Service Oriented Architecture
user generated content business process reengineering
32
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Summary
 New forms of social networking have already arrived
Web 2.0
Publication of data
Demographics
 New business models have arrived in the enterprise
 The operator’s decision: pure network operator vs services
NetCo vs ServCo
 The Operator’s challenge: transform the network into a platform
–
Voice, location, presence become key enablers of other services
–
Voice, location, presence published as components for applications
–
Requires:
• Recognition of the importance of ecosystem of partners
• New business models
• Open Standards (based on Web Services) to define technical enablers
• SOA for Communications
The Future of Voice … is the Network as a Platform.
Voice as an enabler of new communications services. Voice as an enabler of new business
applications. Voice must be an element of Web 2.0
33
ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Thank-You
Zygmunt A Lozinski
IBM United Kingdom Limited
Telecom Industry Technical Leader 3 Greenside, Waterbeach
IBM Senior Technical Staff Member CAMBRIDGE
CB5 9HW
and Master Inventor
United Kingdom
Any Questions?
zygmunt_lozinski@uk.ibm.com
Mobile: +44 (0) 7734 325 378
Voicemail: +44 (0)1962 818299
FAX: +44 (0)1223 864 022
© 2006,2007 IBM Corporation
Telecom Industry
References
 From Airline Reservations to Sonic the Hedgehog: A History of the
Software Industry, Martin Campbell-Kelly, MIT Press, 2003
 A Survey of the Economic Role of Software Platforms in Computerbased Industries, David S. Evans, Andrei Hagiu and Richard
Schmalensee, CESifo Economic Studies, Vol. 51, 2-3/2005, 189–
224
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation
Telecom Industry
Acknowledgements
 With thanks to: Mohammad Chowdhury, Chris Pearson, Paul Reilly,
Patrick Spink and Joe Ziskin of IBM and Ken Henriksen of SprintNextel
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ITU-T Workshop: Future of Voice
Geneva 15-16 Jan 2007
The Convergence of Voice and Web 2.0
ZA Lozinski, IBM
© 2006,2007 IBM Corporation