McGuire’s Law

Yesterday I posted about Connect 2007 in Boston. As I indicated I was very impressed with the participants and the resulting discussion. I’m thankful that Brough took such great notes, but leaning on his work means that I failed to share my own perspectives.

The tone for the day was set in the very first session. One member of the panel articulately shared his perspective that mobility won’t see real growth until carriers open up and recreate the Internet “dumb pipe” model. Another panelist passionately rebutted that view, setting forth instead a “smart pipe” model where wireless carriers provide valuable services to third parties so that those content and applications providers will want to work with the carriers rather than trying to find any possible way to bypass them. Given the nature of each panelist’s business, much of their argument was framed in terms of how to monetize the value created.

I strongly agree with both.

For my purposes, the monetization discussion (although always critical) wasn’t really the heart of the discussion, so forgive me for ignoring that aspect in this post.

As I’ve said many times before (and which is a key theme in The Power of Mobility), mobility creates value in a couple of key ways. The first way is by increasing the availability of products, services, and processes by enabling things that used to be fixed in place to go wherever needed. The second way is by leveraging what is unique about mobility. I usually refer to this as context, but it includes the personal connection folks have with mobility; who they are; their changing situation (’where ya at?’, ‘whatcha up to?’, ‘who ya with?’) and even taking it further to connect that with information known in the network (weather, traffic, movie showtimes…).

The wireless industry, up to now, has had to deal with issues like severely limited capacity, high cost of data transport, reduced data network performance relative to wireline, etc. The industry has necessarily had to place limits on what customers could do and how much they could do it.

Networks like Sprint’s EV-DO Rev A 3G network begin to push us past some of these constraints (although carriers still need to wrestle with potential abuse that really does destroy the performance and economics for the vast majority of users). Networks like Sprint’s Xohm WiMax buildout blow past these limitations.

Xohm is all about bringing the value of mobility (taking anywhere) to the broadband Internet experience. It clearly will deliver the value of that first aspect of the power of mobility (increasing availability) and will enable what the first panelist I referenced above was arguing - opening up the “dumb pipe” Internet model for lots of innovation. (Note that specific pricing models for Xohm have not yet been announced - although there will be pricing options that are very different from traditional wireless pricing models.)

But, that doesn’t negate the opportunity for the “smart pipe” approach.

The debate often falls back to “open” vs. “closed.” This thinking misses the real opportunity. Going from “closed” (restricting what users are allowed to do) to “open” (allowing them to do anything) is not enough. We must extend to “enabled” - enabling new things to happen that can’t happen without our participation.

In The Power of Mobility, I include case studies of four companies that all happen to be Sprint customers. But in three of those case studies, much of the real value is delivered by someone else (Xora, Rave Wireless, and Anyware Mobile Solutions). In each case, it is the partnership between Sprint and these companies that results in real value for the customer. Some of it is boring, non-technology stuff - joint marketing, joint selling, single bill - that enables each company to be more successful than they could be on their own.

But what reflects the true value of Mobility that extends way beyond the “dumb pipe” value of the Internet is the additional value that comes from Sprint enabling these partners (with the customers’ explicit permission so that the released value accrues to the customer) to access information that isn’t easily available in the “dumb pipe” Internet (who is this user, where are they, what is their network connectivity status) and marrying it (not quite a “mash-up” yet) with information unique to the application (what job are they working on, what tracking did they request, does this location match a specific store).

For years, Sprint Nextel has very actively sought to enable third parties with information (e.g. location) and relationships (e.g. line item on the cellular bill) that are uniquely available through the wireless carrier. This creates tangible value for the end customer and the monetization of that value is shared between the carrier and the innovator that has been enabled. (The specifics of that sharing clearly can generate plenty of passion, but again that’s not the point of this post.)

Bottom line, I believe that the explosion we are on the brink of in the mobility revolution will be driven both by “opening” wireless networks to the best-effort “dumb pipe” Internet model AND leveraging the unique attributes of mobility by “enabling” innovators with a “smart pipe” mobile connection to the end customer.

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Now playing: Timber - Plans (I Lay It Down)

This entry was posted on Sunday, October 7th, 2007 at 1:19 pm and is filed under Book, Events, Opinion. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.