Why not an open source application store!

In my last post I talked about the Mobile Long Tail and the need to eliminate the incremental cost of per new application. Anyhow eliminating the variable cost per application doesn’t completely enable a long tail. It solves only half the puzzle.

A golden rule for long tail is that when you have unlimited selection makes sure it can be easily searched. This is what Amazon, Netflix and others had done. Made sure that they provide a mechanism in which products can be easily searched and shared by the customers. After the unprecedented success of the app stores, most of the mobile client application providers had started to build their own application store.

Some interesting mobile client application stores
Apple App Store , Android Market , Nokia Ovi Store , Sumsung App Store,

JK ,pointed me that google wave is supposed to join the bandwagon very soon!

Now all these long tail models both telco and other industries need provide some common features like, searching, filtering, rating, sharing of products. Isn’t it a waste for each of these people to be developing all these common features over and over again? hSenid Mobile has decided to release the full code base of the application store under GPL.

mChoice Vishma

We have commenced the requirement discussions of the mChoice Vishma, which is the project name of the open source application store. Now we have the high level idea on where we need to get to and the team is getting ready with some proposed UI interfaces, so that it will be used as the basis for community discussions.

Face to Face Meet Up

The Vishma face to face meet up will happen on the 17th of February 2010 at GMT 1.00 PM to 2.00 PM.
That is,
Barcelona Time - 2.00 PM to 3.00 PM
Singapore and Malaysian Time - 9.00 PM to 10.00 PM
Sri Lankan and Indian Time - 6.30 PM to 7.30 PM
Follow the http://soltura.hsenidmobile.com to find the online login details to the session.

Bringing the Long Tail to the Telco Applications

OK, let me start by defining the following terms for people to understand my post/s better.

Telco application – This is not the usual mobile application which is installed on the mobile phone. Instead what I refer to as a telco application is the program which resides somewhere in the operators network. One popular kind of the telco application is the voting application, which is the application that receives the text messages when you send an SMS to vote for your favorite star in the American Idol or its local variant like Super Star and summarizes the results and shows it to the relevant people.

Value Added Service (VAS) providers – They are the people who come up with the concept of the application and give it as a service to the subscriber base. For example in the case of American idol or its local variant the media house is the VAS provider.

Killer Application – In this context it’s the Killer Telco Application, which give a lot of $$$$ to the VAS provider and of course the operator.

Understanding long tail

The concept of Long tail[1] has revolutionized the way we think about business. In the good old days traditional sellers had a constraint in the form of shelf space\storage space. Further they had to incur a distribution cost with respect to each product they wanted to sell. Let’s take a simple example, just look at the book store around the corner, they have a constraint in the form of shelf space, hence when a book was to be placed on display they have to consider the opportunity cost of it. So they usually make the most rational decision of filling up the shelf space with the best sellers. This was and is considered the accept business wisdom when dealing with traditional stores.

With the introduction of the digital economy the market boundaries and constraints started to change, for players like Amazon who started with the concept of online web store, did not have the shelf space constraint, for them shelves were replaced by a database entries, hence shelf space had been reduced to a few kilobytes of storage in a machine lying at some corner of the world. So they no longer worry about finding out whether if a book will be a best seller or not. They just store up information about all books, which included books which were deemed to have been termed either “commercially failed” or books which had a geographically distributed small reader bases. The result of the digital economy has been staggering they are finding their revenue to be dominated by the non-best sellers! This prompted a publication “GoodBye Pareto Principle, Hello Long Tail!”[2].

Telco applications - current situation

Telco applications are currently pushed by the operator. Operators due to the incremental cost per new application [includes the development cost of the application, marketing cost of the application, testing, configurations and of course the maintenance cost] consider the introduction of each new application to be a business risk! So they need to do a feasibility analysis and justify the business case, develop the application and then bring it to the market. So as a consequence of this cost they are on the lookout for killer applications. Ideally they want to each new application to be a massive hit among the subscriber base.

As a side effect of this existing process we find that the telco applications of today are either provided by the operator, a corporate house or an IT vendor. Although it’s hard to digest for some people, to be honest the amount of people who are available to innovate and bring new application concepts within the current space are very much limited. Even if a new idea comes up justifying it as a business case might not be the easiest. So the chances are that we might be killing some of the hit applications while it’s just a concept.

Let me try to compare the telco application to the book store example, in a traditional market space the book shelf was a constraint, with respect to telco applications having an incremental cost per application is a constraint. In the same way book stores were earlier trying to guess which are the best sellers and offering those to customers. In the same way on the telco network currently telco’s as per their available market intelligence decides on picking telco application concepts which they expect to be the next killer application.

Do we see a similarity between the current telco application model and the non – long tail business model?

In the current market context if my old boys union/alumni association wants to create a SMS digest messaging application which sends a message with the weekly update of activities, we might not be allowed to create this application. In the current context it’s almost obvious that it would not be considered a killer application.

But isn’t the non introduction of this sort of an application a revenue opportunity denied for the telco?

Mobile Long Tail

So the bottom line is that if the long tail is to be brought to the mobile network, we need to have a business process coupled with the required technology to eliminate the incremental cost per application. When cost per new application is zero, you don’t have to do an analysis to see whether if it’s going to be a hit or not. Instead of trying to play a guessing game on deciding if an application will turn out to be a killer or not. It would provide the operator with an opportunity to just bring the application to the market and see how it performs. Further if the application has zero incremental cost, even if it generates a few messages per year it can still be considered to be profitable. So now even my little Old boys’ association application might be worth for the operator to try out.

This is the business model we are looking at in mChoice Soltura! But for some readers the big question might be “how can the operator achieve zero incremental cost per application?” Keep following us on soltura.hsenidmobile.com as we unveil how we achieve it!

References
[1] The Long Tail by Christian Anderson
[2] "Goodbye Pareto Principle, Hello Long Tail" by Erik Brynjolfsson, Yu (Jeffrey) Hu, and Duncan Simester
[3] http://en.wikipedia.org/wiki/Long_Tail

Unlocking an uncontested market space for the Telcos

Today throughout the globe Telcos are locked in a fierce battle in a “Red Ocean”. Typical as in any “Red Ocean” they face a great challenge in ensuring a profitable growth. Fighting a price war by differentiation and somehow retaining existing customers had become the mantra of the decision makers. At the same time Telcos are faced with a huge challenge of keeping up with cutting edge technological innovations while keeping the capital and operational expenditures under control. Adding to the Telco’s woos is the complexity in differentiating white elephant technological innovations from the ones which the market is ready to buy.

It might look as if I had made it to sound scary but when you listen to the Telco decision makers when they are in total pouring the heart out mode, you get to know that they all face a similar dilemma.

hSenid being a vendor for Telco grade service delivery platforms wanted to break out of the Red Ocean and unlock an uncontested market space for the Telcos. Hours and hours of brain storming by the hSenid team have yielded Soltura, which is a bundled solution encompassing both technological and business process innovation.

Inspired by the work of W. Chan Kim and Renée Mauborgne, hSenid team crafted the product strategy for formulation and execution of Soltura using some of the tools and techniques prescribed in their book Blue Ocean Strategy.

Soltura’s New Value Curve

Using the four actions framework hSenid decided to focus on creating a new value curve and set the priorities clear for the product.

As shown in the four actions framework above, Soltura creates a new value curve for the Telco by providing the following features.

a. Cost Perspective

· Irrespective of the sophistication of the Service Delivery Platform the incremental cost occurred for each new application in the form of both development cost and the operational cost from the Telco side in the form of NCS configurations, testing and management has traditionally been taken as an inevitable cost. Soltura differs from this currently accepted wisdom.

· By making each architectural decision in a cost conscious manner hSenid has managed to come up with a Service Delivery Platform which can be deployed at a Telco without any initially outflow of capital expenditure. One of the important features that are presented by Soltura is the raise of a new industry standard of providing SDP as a hosted solution on the cloud and thereby greatly reducing the Total Cost of Ownership of the platform.

b. New Market Segment and thought leadership Perspective

· By eliminating the incremental cost per application, Soltura creates an opportunity to house thousands of applications and discover a totally new market segment which was not reachable with the existing set of tools and platforms.

· The concept of giving an opportunity of allowing everyone to become a content provider and giving a paradise of choice to the subscribers gives rise to a totally new way of looking at Telco applications – this is what we call as “Socializing the Mobile Network.”

Stay around to see the strategy canvas of Soltura!!!!