McGuire’s Law

I spent some time this morning with Chris Fleck, Citrix’ VP of Solutions Development.  Chris is very focused on mobility, and as we talked, it was clear that our visions of the potential impact of mobility on businesses are well aligned.

One of our conversations centered around how Citrix’ products (XenApp, XenDesktop, etc.) have been demonstratable on smartphones for some time, but not practical.  The devices lacked the processing power, memory, screen resolution, keyboard/usability, and the networks lacked the bandwidth required for a smartphone to actually serve as an extended desktop.  Chris was excited because those barriers have largely gone away.  The time has finally arrived when folks can stop carrying their laptops around and still have complete access to full corporate applications.

Another of our conversations was around how to overcome the physical limitations inherent in the smartphone form factor.  One approach is to use a Bluetooth device like the Redfly.  Chris thinks that the Redfly is finally at the right price point ($199) to drive broad adoption by enterprises, which is great.  But Chris wants to extend it further to what he calls the Nirvana Phone.

I share Chris’ excitement about the pivotal time we’re in when these long-held visions are moving from “nirvana” to reality.  A great and energizing conversation.  Thanks Chris.

The archived streaming videos of the two panels I was on last week are now posted at the Mobilize site.

You can watch them here:

Signals from the Near Future: The Mobile Guru Panel

The Carrier Panel: Strategies to Keep Mobile Data Growing

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Now playing: Billy Bragg - Greetings To The New Brunette (Demo)

In addition to the two articles that GigaOm published last week, I also provided a third article for GigaOm’s consideration as lead up to last week’s Mobilize event.  Here it is for your reading pleasure!

Openness is an active topic in the mobile industry. But what does “open” really mean? In a discussion with leading mobile developers, we asked what “open” meant to each of them. As you can guess, each answer was different. But my favorite was “Open means not having to ask permission.”

I’m not sure that definition fits very well with the word “open,” but it does well capture what is desired from openness. I believe the phrase “freedom” better reflects what we are all seeking as we transform the mobile industry.

Mobile customers desire the freedom to access any legal network-based content or application, anywhere and anytime. They want the freedom to make their mobile devices their own – personalized with their style, their content, and their applications. They want the freedom to install new software and new content, without restrictions, on their mobile devices. Mobile customers want the freedom to choose from a wide variety of devices and change from one device to another as the situation warrants.

But mobile freedom is not just the freedom “to” it is also the freedom “from.” Customers desire freedom from surprise bills, freedom from hard to use devices and services, freedom from the challenges of finding interesting content and applications, freedom from being bombarded with irrelevant ads, freedom from their personal information being shared with people they don’t trust, freedom from never-ending lock-in to one network.

Mobile developers also want freedom. Developers desire the freedom to innovate - leveraging the power of mobility to create new value for customers. They want freedom from having to develop for an infinite variety of devices and platforms. They want the freedom to implement the business model that fits their product and market. Mobile developers want the freedom to succeed.

If this is the freedom that is desired, is it the freedom that is being delivered by the mobile industry? If you care enough about this topic to have read this far, I doubt I need to answer that question.

So, why isn’t the industry hopping right to it and delivering mobile freedom? I believe there are two answers, one somewhat philosophical and the other quite practical.

I believe all industries suffer from a similar problem. Since I’ve “grown up” in telecom, I call it “ Big Bell Dogma.” In short, Big Bell Dogma is resistance to change. In large part it is driven by the market power held by incumbents and their fear that change will reduce that power. Each of us, individually, suffers from Big Bell Dogma. We resist change because it brings uncertainty over whether we can continue to be successful. But the greater the power held, the greater the resistance to change. A monopoly mindset is what gives Big Bell Dogma its name.

On a more practical level, the reality is that the mobile industry has an existing, profitable business model that generally delivers the kind of financial results Wall Street expects.

I believe that mobile freedom will drive significant market growth – just as freedom drove tremendous growth in the PC market (with the IBM/Microsoft/Intel standard platform) and in the Internet market (when the web delivered new freedom to end users and developers). I believe that mobile operators who embrace freedom can participate in that market growth and can actually deliver better financial performance (faster growth, better margins) than the current model.

The challenge is in the transition. In a freedom-enabled mobile market, the revenues change. The sources of revenue change and the nature of revenues change. In a freedom-driven business model, the costs change as well. Unfortunately, synchronizing the revenue and cost changes is challenging.

To successfully manage through this transition takes a long series of small steps, each with manageable risk. Sprint’s introduction of the Simply Everything price plan to deliver freedom from surprise bills was a manageable risk. Our introduction of the Titan platform to deliver freedom for developers from fragmented device development was a manageable risk. The list goes on.

Over time, a series of steps can get us to mobile freedom. But wouldn’t it be nice to not have to worry about a transition?

Sprint was blessed with that opportunity in the launch of our WiMax business – Xohm, soon to be part of the new Clearwire. The Xohm business model was built from the ground up to deliver mobile freedom to customers and to third party developers.

It has been very exciting to watch the birthing of a new industry model, and it will be fascinating to watch as mobile freedom grows and matures!

Last week while I was traveling, the GigaOm team posted my second article “Mobility - What’s Different.”

The article starts by asking “Is mobility a new revolution, or is it just an extension of the previous PC and Internet revolutions? Is anything really different?”  It then uses the Kindle, Dash Express, DriveCam, and CardioNet to help answer the question.

Check it out!

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Now playing: Matthew Perryman Jones - Beneath The Silver Moon

Helping set the stage for Mobilize, my thoughts on “Mobile Broadband - A New Revolution?” are up at GigaOm.  Check it out.

Time Magazine has a wonderful photo essay on “The Long Odyssey of the Cellphone”

This reminded me of how much fun I had researching and writing the section on the history of mobility in my book The Power of Mobility. I thought I’d share that section with you here. If you like technology history, the book also includes sections on the history of the printing press, the steam engine, the telegraph, the computer, and the Internet.

Wireless Technologies Unleash the Power of Mobility

The wireless age can be traced back to 1888 when German physicist Heinrich Hertz demonstrated the transmission of an electrical signal through the air to a “receiver” on the other side of the room. Hertz built upon brushes with wireless signals made by Thomas Edison and James Clerk Maxwell, but wasn’t able to carry these wireless signals forward into any practical applications.

That task fell to a young Italian entrepreneur named Guglielmo Marconi. By 1897, Marconi had received the first ever patent for this new “radio” technology and was busy forming a company to commercialize the technology and its applications. On December 12, 1901 Marconi and his team managed to send a radio signal all the way across the Atlantic Ocean.

By 1907, Marconi wireless telegraph rooms were installed on all the major transatlantic ocean liners. At first, these systems were intended as profitable ventures, with well-to-do passengers paying premium prices to send “Marconigrams” to their friends and business partners on both continents and to stay connected with the news and dealings during their journey. However, with the sinking of the Titanic in April 1912, a new value of mobility was discovered. As the ship was going down, its Marconi operator stayed at his post frantically tapping out an S.O.S. message with the ship’s coordinates. The Carpathia heard the message and sailed 50 miles to save seven hundred passengers that otherwise would undoubtedly have perished. Unfortunately, the California, a ship that was much closer and could have saved many more, failed to receive the signal because their Marconi operator had turned in for the night. From that night on, the three-fold value of wireless was clear: business, pleasure, and safety.

Wireless communications continued to develop slowly through most of the 20th century. In 1921, the Detroit Police Department began using radio dispatching, but the system was transmit only. In 1933, the Bayonne, New Jersey police department deployed the first two-way push-to-talk mobile radio system, filling each squad car’s trunk with electronic equipment and requiring the officer to keep the car constantly running so the battery wouldn’t be completely run down by the inefficient radio system.

During World War II, Motorola introduced the Handie-Talkie and the Walkie-Talkie, a backpack filled with glowing vacuum tubes and radio equipment to enable, for the first time, wireless battlefield communications.

In 1946, the Bell System began offering commercial wireless telephone service for the first time, starting in St. Louis and extending to 25 cities. The service used push-to-talk technology that an operator could then manually patch through to complete a telephone call. These systems used one set of channels to cover an entire city and surrounding area, significantly limiting the number of customers. Even as late as 1981, only 24 wireless phone users could be on the line at the same time in New York City and systems limitations kept the total number of customers down to 700. Obviously, something needed to change.

That change involved both a new system architecture and new spectrum licensed from the government through the Federal Communications Commission (FCC). The new architecture was called “cellular” because it broke a city up into a number of “cells”, each with its own radios, allowing channels to be reused many times over and greatly increasing the number of customers and calls that could be supported.

In 1981, the FCC announced it would offer two blocks of spectrum for this new cellular technology. The first would go to the local telephone company, most often the Bell System, but sometimes GTE or United Telephone or Centel or one of dozens of other small local telephone companies. The second was opened to new non-wireline companies. Starting in June 1982 with the 30 largest cities and working through December 1989 when the final rural licenses were issued, the FCC gave out a total of 1,468 cellular licenses covering every inch of the country.

A lot of wheeling and dealing happened over those seven and a half years largely shaping the initial cellular industry in the United States. The first surprising deal involved the Bell System. The break-up of the System was happening concurrent with the issuing of licenses. Since AT&T had performed a study that suggested the total market for cellular would only be 900,000 total U.S. subscribers by 2000, the company ceded its right to participate in the spectrum give-away to the newly formed Regional Bell Operating Companies (RBOCs). The biggest wheeler-and-dealer amongst the non-wireline companies was Craig McCaw. McCaw started the 1980s as the owner of a small cable TV business in the state of Washington. By the time the cellular industry was fully formed, McCaw Cellular was the only truly nationwide wireless carrier.

The first wireless phones in no way resembled the convenient, attractive devices we carry today. At first, wireless phones were almost universally installed in cars. Later came “bag phones” which could be carried about, but certainly couldn’t fit in a purse or pocket. But that didn’t stop folks from falling in love with mobility. By the end of 1985, there were 340,000 customers in eighty-five markets. Within two years, that number had more than tripled and the industry had generated more than a billion dollars in revenue. By the end of the decade, 5.3 million cell phones had been sold and annual revenues were at $3 billion. AT&T’s study had missed the mark. Badly.

In 1994, AT&T finally got into the cellular game, buying McCaw for $12.6 billion and assuming nearly $5 billion in the company’s debt. But the mid-1990s were also a period of technology advances that would further refine the industry. The first was leveraging Moore’s Law to introduce digital technology into cellular systems, making them much more efficient and able to multiply the number of concurrent calls. The second was the emergence of a start-up called Fleet Call (later renamed Nextel) who used a new technology from Motorola to offer wireless telephone service using a previously inefficiently run block of spectrum called Specialized Mobile Radio (SMR). Due to its origins and regulations, the Fleet Call/Nextel service included a high performance push-to-talk capability that became wildly successful. The final new technology was called Personal Communications Systems (PCS) which would enable new data services. In July 1993, the FCC announced a new set of spectrum auctions to allow up to six new competitors to enter each market using PCS technology.

One of the new nationwide carriers to emerge from the PCS license auctions was Sprint PCS. Today, in 2007, the U.S. mobile industry has consolidated down to four major nationwide players. The largest, AT&T (formerly Cingular), has been formed out of AT&T Wireless (which started as McCaw Cellular) and three of the original RBOCs (BellSouth, Southwestern Bell, Ameritech) plus parts of a fourth RBOC (Pacific Telesis). The second largest is Verizon Wireless formed out of two of the original RBOCs (Bell Atlantic and NYNEX) plus GTE plus the most significant wireless parts of Pacific Telesis. The third largest is Sprint Nextel formed through the combination of those two mid-1990s entrants. The fourth is the U.S. arm of Germany’s T-Mobile, largely formed through a roll-up of PCS auction winners. So, roughly half the industry traces its roots back to the original license gifts to the big Bell wireline companies, while the other half has been formed out of scrappy upstarts that burst onto the scene in the mid-90’s.

One thing is clear - mobility has been a huge hit. According to the CTIA, in mid-2006 there were 219.4 million U.S. wireless subscribers, spending more than $10 billion per month for mobility. And these customers have clearly begun to integrate their mobile devices into how they live, work and play.

The global impact is even more dramatic. According to the International Telecommunications Union (ITU), it took 21 years for mobile technology to reach the first billion users worldwide. In comparison, it took 125 years for wireline telecom to reach that same billion. The second billion mobile users signed up in just three years. Wireline has yet to reach its second billion. Philip Redman of research firm Gartner, Inc. estimates that nearly half of the world’s population will be mobile users by 2010. Considering that up until now, less than 10% of the world’s population has ever made a telephone call, the impact of mobility on how the world lives and communicates is huge.

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Sources:Inventors and Discoverers: Changing Our World by c 1988 by National Geographic Society, Washington DC Elizabeth L. Newhouse editor

Science Firsts: From the Creation of Science to the Science of Creation by Robert A. Adler (c) 2002 by Robert Adler, published by John Wiley & Sons, Inc. Hoboken, NJ

Wireless Nation: The Frenzied Launch of the Cellular Revolution in America by James B. Murray, Jr. (c) 2001 by James B. Murray Jr. published by Perseus Publishing, Cambridge, MA

Marconi by Giancarlo Masini (c) 1976 by Giancarlo Masini, published by Marsilio Publishers, New York

http://www.ctia.org/research_statistics/statistics/index.cfm/AID/10202

http://www.itu.int/osg/spu/publications/digitalife/lifestylesdigital.html

http://www.physorg.com/printnews.php?newsid=12090

Earlier this week at Sprint’s Senior Leadership Conference, Jim Patterson, Sprint’s president of wholesale, introduced me to two very interesting examples of mobile broadband being built into products to dramatically increase the value of the product, and in these cases, even save lives.

The first one, DriveCam, is a device that you hang on the rear view mirror of your car (or more likely, your teenager’s car or perhaps a company-owned vehicle). It has a camera facing forward and another facing back into the vehicle. I know, I hear you whining about invasion of privacy, but the company claims that 100% of teens recommend the product to their friends. That’s because it’s all about teaching safer driving, not spying. The camera captures and stores a small amount of video, uploading 20 seconds of video surrounding unsafe driving events (rapid acceleration, deceleration, sudden swerves, or accidents) to driving counselors who then use the video to coach the drivers on how to improve their driving. The company claims that the product results in a 70% reduction in accidents and American Family Insurance has even launched a program to provide the product and service for free to families, because they believe it results in fewer claims.

The second product is CardioNet. This product is comprised of a set of three leads attached to the patient’s chest,connected to a sensor. The sensor wirelessly sends heartbeat data to a small, pocketable, monitor. When the monitor detects an abnormal heartbeat, the data is immediately uploaded to the CardioNet Monitoring Center where the data is analyzed and shared with the patient’s doctor, allowing more accurate diagnosis of conditions and threats to the patient, as well as immediate response to critical situations.  The company claims that the product results in three times more effective results than the traditional solution.

It’s hard to find more compelling examples of the power of mobility than when lives are saved!

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Now playing: Russ Ramsey - Land Between

Nearly two years ago, I introduced the concept of “Big Bell Dogma” on this blog. I also discussed the concept last year in my book.

Since that time, I’ve found the concept very useful for many purposes, but I’ve never gone back to do a good job of defining what Big Bell Dogma really is or why it matters. Today I plan to fill that gap.

The name “Big Bell Dogma” is a reference to the original “Ma Bell” - AT&T - when they were the nationwide monopoly for telecom services in the United States. (Of course, there were other monopoly telephone companies serving specific cities and regions, including GTE and United Telephone - later renamed Sprint and then Embarq, but none of them had the power or arrogance of Ma Bell.) The “Dogma” piece comes from the attitude of the monster monopolist which played itself out in a series of beliefs that shaped decisions and actions made by the company.

Some good examples come from a few of my favorite books:

Nerds 2.0.1: A Brief History of the Internet by Stephen Segaller was originally a PBS series (which I’ve never seen) but became a book which is a fascinating read if you’re into history, technology, or both. In the book, there are a series of quotes from the men and women behind the original creation of ARPnet (the Internet), including several that describe AT&T’s “Big Bell Dogma.”

Larry Roberts: “I gave speeches about this in the 1967-to-1969 timeframe…Defense Communications Agency; AT&T; and the other people around had all these engineers who actually booed and hissed… ‘Everything would go wrong, and it couldn’t possibly work.’ … AT&T and DCA laughed at me. In fact, they more than laughed. They actually were very nasty. I felt like people were throwing rotten eggs at me when I was giving speeches as we were preparing for this, because they basically thought we were crazy.”

Dave Walden: “The telephone companies seemed to me to be working pretty hard to discredit packet switching. They would go give speeches. They’d talk to their customers and say this isn’t a good idea. It can’t be. The telephony attitude is not very compatible with packet switching… the telephony attitude is about guaranteed levels of service and capacity. It’s about investments that you make that you get back over decades.”

Len Kleinrock: “I would say, ‘Please give us good data communications,’ and they would reply, ‘The United States is a copper mine - we have phone lines everywhere so use the telephone network.’ I would counter, ‘But you don’t understand, it takes twenty-five seconds to set up a call, you charge me for a minimum three minutes, and all I want is to send a millisecond of data.’ Their reply was, ‘Go away, children, the revenue stream from data transmission is dwarfed by that of our voice traffic.’ So the children went away and created the Internet!”

Bob Taylor: “When I asked AT&T to participate in the ARPAnet, they assured me that packet switching wouldn’t work. So that didn’t go very far.”

Another great technology history book is Wireless Nation: The Frenzied Launch of the Cellular Revolution in America by James B. Murray, Jr.

In it, the author describes AT&T’s behavior when the first cellular spectrum licenses were distributed by the FCC: “On June 8, the day following the Round I filings, AT&T and GTE announced that they and the rest of the wireline applicants had agreed to split ownership of the top thirty markets. The two wireline heavyweights had successfully intimidated scores of smaller independent telephone companies, convincing them that they could never assemble the capital or expertise needed to launch these new cell phone businesses. If the small companies would just stand aside, AT&T and GTE declared, they would graciously condescend to share minority interests in the contested markets. But AT&T and GTE would, of course, be in charge - and they would bill their minority partners for the service.”

A third fascinating read is End of the Line: The Rise and Fall of AT&T by Leslie Cauley.

A small part of the AT&T story is how, at the breakup of AT&T and the formation of the seven “baby bells,” AT&T gave away the nationwide cellular licenses described above. Cauley describes it this way: “They also got AT&T’s operational licenses for a brand-new service that appeared to have no future. …That cache of operational licenses? They were wireless licenses. … At the time nobody expected wireless to amount to much. AT&T’s own internal studies had concluded that the wireless market might attract 1 million users, at most. So when a young attorney named John Zeglis urged Brown to give the licenses to the Bells as a consolation prize, he didn’t hesitate.”

However, Big Bell Dogma isn’t just about how Ma Bell historically acted. In fact, a more accurate name might be Incumbent Intransigence, but Big Bell Dogma sounds so much better!

Big Bell Dogma stems from the power that comes from incumbency. Any person or organization creates power over time. For companies, this power comes from their market position, their relationships with customers, their brand, their physical assets, etc. For individuals, this power comes from knowledge and experience, and from relationships with others that enable them to be successful doing their jobs.

The net result is that, over time, any new idea or change becomes a threat to this power.

Think about your own job, assuming you’re currently successful. If tomorrow your boss came to you and said “I’m transferring you to a new group to do a new job that you’ve never done before working with people you don’t know,” your confidence in your ability to succeed undoubtedly would be challenged and you’d immediately want to do whatever you could to stay where you are doing what you’re doing (and maybe get a promotion that incrementally adds to the scope of your current success).

The same holds true for companies.

And the more entrenched an incumbent is, the less flexible they become, the less open they are to new ways of doing things, and the more aggressively they attack anyone who tries to introduce new ideas into the marketplace.

It’s easy to point at Sprint’s two largest competitors, who happen to still be “Big Bells” and tag them with the BBD tag, but I recognize that anyone who has any incumbency at all suffers to some degree from this malady. I try to spot the symptoms in my own behavior and self-correct before I kill a really good idea.

So, what are the symptoms? The attitudes that, to me, are symptomatic of Big Bell Dogma include:

• Change is risky. Status quo is safe.
  Status quo protects the stability of networks and systems. It also protects the power of incumbents.
• Flexibility is risky. Rigidity is safe.
  Flexibility introduces uncertainty which threatens the performance of the networks and systems. It also threatens well understood and steady cash flows.
• Distributed control is risky. Centralized control is safe.
  Centralized control ensures that nothing happens without an understanding of the impacts on all aspects of the system and without the ability to “roll back” to the previous stable state. It also ensures that incumbents are in control and determine which changes are in their best interest.

Can you spot these attitudes in your own behaviors? Are you willing to drive them out?

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Now playing: Greg Adkins - On The Edge

When I meet with companies and talk about mobility, I often walk away with a clear impression of whether the folks I’ve met with are “power-focused” or “danger-focused.”

The concept comes from the simple observation that a new technology can represent new power for businesses - a new tool to be used to create differentiation from competitors or reduce costs to improve profits or better compete on price - but a new technology can also represent new danger for businesses - new costs, new security threats, new opportunities for workers to be distracted, etc.

The reality is that successful businesses must learn to capture the power while managing the danger.

But I get excited when I talk to companies that are really focused on the power. (That’s why my book was primarily about “The Power of Mobility” while not ignoring the danger.)

As you can imagine, my emotional response is quite different when I talk to companies that can’t get past the dangers and miss the opportunity to change the rules of competition in their industry by capturing the power.

I’m reminded of all of this by an article out of the UK at IT Week titled “What value mobility?”

The author, Guy Kewney, clearly can’t see past the dangers of mobility to recognize the potential that mobility represents to create value for businesses of all sizes.

He asks the rhetorical questions “Does WiMax or any other mobile wireless broadband technology truly offer the IT director something that shows up on the bottom line? Or is the value merely a value to the manufacturers?” The answers are clear in his mind.

But apparently, mobility isn’t the only technology he finds of questionable value: “In a business where experts are still questioning the ‘real value’ of even basic computer technology, maybe I shouldn’t be surprised to find scepticism about the usefulness of mobile.”

May I suggest that Mr. Kewney consider these rhetorical questions as well:

• What is the value of accelerated decision making?
• What is the value of up-to-date information wherever you are?
• What is the value of not having to stay in the office to wait for a call or e-mail - freeing you to go and spend time with family, friends, or business partners?

• What is the value of increased responsiveness to customer needs?
• What is the value of knowing exactly where your employees and other valuable assets are when you need them?
• What is the value of an employee being able to complete a task immediately without having to return to the office?
• What is the value of reducing return visits to a customer or business location because you can resolve the problem immediately?
• What is the value of having the information you need at your fingertips to solve a problem or complete a task?

• What is the value of understanding and managing your costs of doing business?
• What is the value of knowing exactly how long workers spend at different locations performing different tasks for different customers?
• What is the value of reducing wasted efforts?
• What is the value of reducing data entry by capturing data such as the time a task is performed or the location?
• What is the value of eliminating paper-based processes that require data re-entry?
• What is the value of reducing keying errors by reducing data entry and re-entry?
• What is the value of accelerating the flow of information through your business?

I’m sure there are many other questions that would be valuable to consider, but this should be a good start. And perhaps Mr. Kewney should consider trying a Blackberry and other mobile technologies rather than just criticizing them.

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Now playing: Paul Wright - Sky Falling Down [Acoustic]

During his visit, Xora’s Amir also told me the story of Stock Building Supply.

Stock is the largest supplier of building supplies to professional home builders across the United States. Stock is a long time Xora customer. According to a case study on Xora’s website, the company has used Xora’s software (and Sprint Nextel phones) to achieve one additional truck turn per day, resulting in an additional $50M per year in revenues. Not bad for a deployment that costs about one thousandth of that benefit!

However, the company has been hit hard by the housing downturn. Builders are building fewer new homes, which means Stock has less to deliver. This has resulted in financial losses and thousands of layoffs.

Amidst these challenges, Xora was a bit surprised when Stock decided to expand their deployment of Xora’s workforce management solution. When questioned, Stock simply pointed out that the investment makes perfect sense for tough times. First, it delivers real efficiencies - enabling the company to do the most with the fewest workers. But more importantly, mobility enables the company to be more competitive winning the business that’s still out there to be won.

Sounds like an example many other companies should follow. Capture the power!

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Now playing: Mark Heard - My Redeemer Lives