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Thursday, April 19, 2012

Some of my current thinking about RCSe / Joyn

I realise that haven't commented on this blog about RCS in a while, although I've had numerous exchanges on Twitter over the past couple of months since the Joyn announcement. I've also had a chance to talk to various operators and vendors, both through general briefings and under-NDA private consulting engagements.
  
So this is a bit of an update on recent thoughts & conversations I've been having. The timing seems appropriate, given that next week there is both a legacy-view IMS conference in Spain, and for real telecoms thought-leadership, my own Future of Voice / Telco-OTT Strategies workshop with Martin Geddes (details here, sign up here).

That said, I'm not going to give away all of my new analysis about RCS in this post, just certain strands - the full story is reserved for my consulting and workshop clients, or paying subscribers to @DApremium on Twitter.
 
If you are interested in a consulting workshop about Joyn/RCSe please get in touch. I am particularly interested in hearing from COOs, CFOs or others having to make investment decisions, who need a counter-argument or "bear case" to set against the position of internal or vendor RCS advocates.

Note: One or two commentators on Twitter have accused me of having confirmation bias (giving disproportionate weight to data that confirms existing beliefs), so I've been very consciously "open-minded" about this whole area. At MWC I made sure I had a couple of Joyn demos without preconception or prejudice, and I seen the official GSMA "pitch" several times at conferences & webinars. Some of my opinions have shifted slightly, but overall I am still broadly negative.

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Status

It's too early to judge based on results - we've only had Vodafone Spain launch, albeit in a very limited beta/trial fashion (5-10k downloads and very mixed reviews according to Google Play, especially as some comments seem to be from internal VF folk). German operators have talked about May as a target date, and "summer" seems to be the timeframe for a broader European launch. Overall, there have been many delays and slippages - it's interesting to compare each GSMA presenter's charts at conferences with the previous ones to see what dates have moved. France, Italy and South Korea are all allegedly launching in H1'2012 as well - I'm willing to bet that at least one misses that date, especially for a full, all-MNOs, interoperable launch.

That said, one thing that seems to be clear recently is that RCS is being driven very heavily "from the top". There's definitely tighter marketing and messaging. I'm expecting to see IMS conference speeches with "See? We were right all along!" self-congratulatory (and very premature) messages. And to be fair, Joyn as a brand isn't bad, even if some amusing acronyms are possible. 

There's also a sense of urgency and committment which is (just) the right side of desperation. There are a lot more companies with "skin in the game", albeit with different levels of financial imvolvement. (Notably though, most vendors are dual-purposing their solutions for both IMS/RCS and also TelcoOTT-type use cases). The concept of "fake it till you make it" is understandable from a marketing point of view, but the mantra of "it's just there, it just works" is a huge liability, if it isn't/doesn't.

In my view, a better strategy would have been to target RCS at specific niches or use-cases, rather than pretend (against all evidence and realistic expectation) that it's going to suddenly become "ubiquitous".  (I wrote a piece about "the death of ubiquity" a while back). Nobody in the industry believes RCS will be everywhere - and certainly not on a 2-3 year timeframe - so it is credibility-damaging to assert it anyway. Not to mention the increasing share-of-wallet that will accrue to fragmented rather than ubiquitous telecoms services & capabilities.


What's it for? And why will people use it?

There are still very mixed messages about whether RCS is supposed to be a competitor to so-called OTT players, or something else entirely. I've yet to hear a single compelling reason why any existing user of WhatsApp or Kakaotalk or Facebook or BBM would be persuaded to switch to Joyn, and for which use-cases. 

The usual argument seems to be that "not everyone has smartphones" or "not everyone downloads WhatsApp, so this is a service for everyone else". Both of these arguments are completely specious - I cannot think of a single successful technology or service that was driven by late-adopters, especially a communications service which relies on Metcalfe network-effect square/exponential laws, and which is heavily driven by popular individuals as trend-setters or social "hubs". Plus, downloading apps is no longer onerous. Some people even view it as fun. (I suspect a lot of IMS engineers still have old Symbian phones, which might explain a few things).

Put another way - this late-adopters-first approach sounds like an attempt to "cross the chasm", but backwards.

Nevertheless, the force being applied to try to "make RCS a success" is commendable. I've met a number of people from operators recently - even from disruptive Telco-OTT business units - who seem to have had an edict handed down that they MUST have RCS compatibility. That said, it's fair to say I've spoken to a few supposed "converts" who have been singing its praises through gritted teeth.

Attitudes also seem to be different in the US to Europe. 

In Europe, the story is muddled. RCSe is being pitched as an OTT-beater (by some), SMS 2.0 (by others), an easy option for late-adopters without smartphones or Facebook (uh huh) and a variety of other mostly unconvincing stories. There's quite a lot of general skepticism about IMS, and an awareness of awkward practicalities such as 50-90% prepay users who buy phones unlocked without operator apps (and who SIM-swap a lot).

In the US, the approach is about much tighter coupling of RCS to VoLTE, to create a completely new personal communications experience for all-IP mobile networks. There's much more homogeneity in the user base (mostly on long contracts), less fragmentation among service providers, and a mentality that they can make IMS work. [We should see the re-unification of the now-divergent RCSe and full RCS in RCS5.0. At some point].

There's also more emphasis in the US on using RCS as a developer platform. In my view, it's a bigger bet, but a rather more coherent one, especially as 4G has become a marketing issue and the CDMA operators are being forced to LTE anyway. So they really need VoLTE or a VoIP alternative, and thus they seem to think that RCS might as well come along for the ride. Some of the demos and mockups I've seen (eg from Summit and D2) even look quite slick.

But it's also heavily interdependent on other issues - for example, if VoLTE struggles with radio issues (eg voice quality, cell handover or battery consumption) then RCS is tightly coupled and gets delayed as well. LTE outages on Verizon have also been blamed on the IMS core, which doesn't bode well.


Competition is intensifying - and not just from apps

And delay is critical here, because the longer it takes, the greater a foothold Apple, Google, Facebook and others (Microsoft/Skype?) will have. I can't see Apple ever putting a full, native RCS capability in its devices - they might do a server-side cludge via iCloud, but put a new telco comms client (and IMS!) on an iPhone to compete with iMessage and FaceTime, much less a SIM-free WiFi iPad or iPod? No, that seems implausible, especially in the short term.

Google is already allowing Android OEMs to implement RCS and presumably will do its own variants within Motorola (for now), but I'm unconvinced they'd put it in the basic Android build - again, not least because it's used increasingly in non-SIM/non-telco devices like tablets, and it won't want to sideline Google Voice, G+, GTalk, GMail and its various other comms properties.

There's also a sub-story with Google's involvement in WebRTC - it knows that much P2P communications isn't going to remain a "service" or even an "app" for long - it's going to be a simple feature of the browser, and that any service will need to be something provided over and above simple transport of voice, message or video. (WebRTC is a large-but-silent elephant in the communications services room. It'll take a few years to hit mobile in a big way, but has the potential to be the single biggest disruptor for the entire industry).

Facebook's 400m mobile users makes the Joyn story of "it's just there, it just works" look ridiculous already. It's already much more widely available than RCS will ever be (including down to featurephones with Facebook Zero, Java and even USSD / SIM toolkit applications - as well as being on PCs and tablets everywhere). If the telecom industry wants something "ubiquitous" it needs to go well beyond IMS-capable devices.

Then we have Microsoft, BlackBerry and numerous other players, none of which must see RCS as a panacea, even if they are getting arm-twisted into including it in devices by carriers. But if anyone thinks that RIM is going to willingly downplay the BBM experience, or that Windows/Skype messaging is going to be based 100% on an RCS API, they're on a different planet to me. [Edit - some details on WP8 + RCS here]


Developers, developers

Overall, I've got more sympathy for the US RCS approach, because at least there's a consistent story - and, critically, there's a clear developer angle. I think that RCS/RCSe/Joyn has very little chance of success (anywhere) as a messaging app but I can just about buy into the API story, at least in concept if not execution.
  
I can envisage certain B2C use-cases for video-share, such as customer support ("No, connect the wire to that socket"), or perhaps C2C mashups with a map ("I'm in the pub... where are you exactly? Look, I'll just send you a navigation widget"). But the problem with all of these - as with all other telco APIs - is convincing developers that this is the best route to solving the problem, something that is going to get ever-harder as the same features start appearing in HTML5 as well as native app plaforms. And I suspect that HTML5 - and even the telcos' own WAC-type device APIs - will be "just there" and should "just work" at least as well.

(It wouldn't surprise me if the industry tries to somehow tie such device APIs into RCS as part of its work in WAC and W3C - but I really don't expect that to be universal as HTML5 will extend far beyond mobile phones / SIM-enabled devices)

Some of what companies like Solaimes are doing around "thin client" RCS, with the bulk of the work done in the cloud, and just a much lighter app (or browser) on the device makes sense, especially as it makes it easier to do RCS-as-OTT implementations - something I think is critical if it's to succeed at  all. I'm less convinced that the phonebook / contact-list is where you would want to anchor such services on the phone, though.


OTT-RCS

One of the biggest failings of the current crop of RCSe concepts is tying the app to the SIM card - firstly because many devices don't have SIMs, and secondly because there needs to be the ability to download 3rd-party apps onto phones running on networks which haven't signed up. (eg a Vodafone Joyn app on a 3UK phone).

Increasingly,  people will also have multiple connected devices, and will start to want the same experience on all of them. If I've got a Vodafone SIM in my iPhone, an Orange one in my tablet, an unlocked MiFi with various national SIMs, a PC on WiFi, an MVNO-powered smart-grid electricity gadget, and a dual-SIM Android for travelling, I won't want to have a dozen separate RCS accounts. And that's even before I try porting them when I churn.

RCS is already usable over WiFi, so it will have to be OTT at least some of the time, especially on devices that don't have a SIM card. So that begs the question - why not have it OTT all of the time?


Interconnect

This plays into a critical theme. What's the interconnect business model (between operators) for RCS/Joyn? It's not something I've heard discussed openly anywhere.

Does an operator "terminating" messages or video-sharing get paid by the "originator"? On what basis? And if I start a chat with another person, but *they* upgrade the session to video or sharing, who's the originator anyway? Or is RCS going to be a "bill and keep" service where there is no commercial arrangement? How does it change for OTT-style RCS?

It could be that the reason I haven't heard anything is because RCS is going to be free at retail in perpetuity - and therefore will also be free between operators, so interconnect billing isn't needed. But that would be most unlike any other area of the telecoms industry, which mostly hasn't even been able to grasp the idea of "freemium" to any extent.

It's notable that some of the smaller European operators seem to be the most skeptical of RCSe, and I wonder if that's because they're worried that they become "net exporters" and end up having to pay out cash, just to deliver a service they can't even monetise directly with end-users.

In any case, re-hacking the wholesale billing and mediation side of operators' IT stack to handle RCS can't be too palatable for many, especially if they're currently in the middle of a transformation/upgrade cycle anyway. Add in dealing with RCS in the network policy and charging (eg how do you treat the "OTT" bits of RCSe traffic when it's sent to/from a PC?) and it becomes an even more expensive exercise.


International

The assumption behind Joyn is that the main use-case is similar to SMS - domestic peer-to-peer messaging between friends, for example. While that's also true for a lot of BlackBerry BBM use and (in certain countries) WhatsApp and some other Internet services, it's much less true for platforms like Skype which have a large international component.

Because RCS will only get adopted slowly (I think it will be doing very well if it achieves over 2% global active use, or over 10% for any country/operators, by end-2014) its uptake is likely to be much more community driven, or by specific niche use-cases. It will take a long time (if ever) to be expected to be available as a default by users.

One group that needs to be addressed, if RCS is really going to compete with Internet peers, is the international user base. Firstly: does it work, and secondly, does it cost extra? This brings the interconnect question right back to centre stage. To use an example, a friend of mine in London currently uses WhatsApp primarily to chat and exchange videos/photos/links with her girlfriend who's studying in the US (with a local US SIM). Alternatively, they use Skype for long calls or videocalls. The alternative - paid per-message international SMS or IDD voice - is clearly not a viable option.

Will RCS make any different to that scenario, where perhaps one user is on Orange, and the other on AT&T? Neither telco will want to risk cannibalising IDD telephony and international SMS revenues today, so can they construct a mechanism to allow Joyn-type apps to compete for that use case? If not, they can't expect RCS to be a realistic competitor to WhatsApp, Skype and its peers: "free IM... as long as your buddies aren't abroad" is a poor fit with user expectations.


Summary
 
As I noted above, this is a snapshot of my current thinking, on a few areas that RCS/RCSe/Joyn needs to address.  Overall, the technology is starting to look a bit more like a complete proposition, but it was already much too little, too late at end-2011 and it's now even later.

In 2012 we've already had Instagram annointed as "the next big thing", we've seen new services like Pinterest spring up as flavour of the month, and only yesterday I heard about astonishingly fast viral growth to 30m users of "Line" a new Japanese messaging app. It's added 20m just in the extra time that RCS launch in Spain has been delayed.

The idea that RCSe will be a "Top 10" success against such a fast-moving competitive background is improbable - and even if it does, getting beyond a short-term "one-hit-wonder" must have lottery-scale odds. I really can't see how it might stay the favoured, coolest messaging app given the furious pace of evolution by startups who actually employ designers and behavioural psychologists, and who can roll out an updated version tomorrow.

There is a (small) chance that RCS might evolve to be the next "lowest common denominator"  communications platform alongside telephony, SMS, email and postal services. But even if it does, it's far from clear that such ubiquitous forms of communication can retain more than a tiny fraction of today's telecom market - especially as WebRTC takes hold. Every user is building their favoured personal "wardrobe" of fashionable communications services. The share-of-wallet of the telecoms equivalent of basic, proletarian Marks & Spencer underpants isn't going to be very high.

I'm running out of terms for RCS - I've used "dead" and "zombie" already in the past. So I think I'll just stick with "inanimate". It's still not moving, and it's certainly not capable of running after its competition with much vigour.


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6 comments:

Martín said...

"I've yet to hear a single compelling reason why any existing user of WhatsApp or Kakaotalk or Facebook or BBM would be persuaded to switch to Joyn, and for which use-cases. "

10% off your next bill if you use joyn.

If there is anything that beats free is free+disccount.

wifidave said...

Very informative. Can't say I've followed RCS/Joyn closely, but there are some other "macro" issues in view here as well.

The Internet-centric OTT developers are operating in dog years compared to MNO developments. Inter-dependencies (TelcoOTT - RCS, MNO - Infrastructure Vendor, MNO - MNO, etc...) only exacerbate this.

The comment about good TelcoOTT groups being ordered to support RCS reinforces my view that TelcoOTT initiatives are operating at a great disadvantage to their counterparts "in the wild". I think Dean Elwood knows a thing or two about this, and his advice for TelcoOTT is "Embrace the culture - be agile, remove boundaries. Less Telco, More Internet" I'd see RCS requirements as constraints for TelcoOTT.

Most importantly, you really hit on something with the "personal wardrobe" allegory for the mobile experience. The users are crafting very personalized and unique experiences (handset, operator, apps, etc...). Any operator looking to attract and keep subscribers fights against that momentum at their own peril.

Best,

juan said...

Dean,
We are more positive on RCS, as we work on that :-)
A lot of internet companies which core is not the messaging needed to create their own messaging because they need as a feature. With a proper REST exposure, they can use RCS and forget about creating a new one. We think future telcos will sell communication enablers aaS to be exposed as REST and connected to WebRTC clients created freely bye people using the communications to create use cases. It is what we name FTB, friendly telco border http://blog.solaiemes.com/2012/04/introducing-new-concept-ftb-friendly.html.
The border/frontier of telco may talk REST, not telco protocols.

Also, current very successful OTT messaging companies (its core is the messaging) are not arriving to low end user and devices, and also are focused in the person to person messaging, still not providing API to create services based on rich messaging experience. Then, there are some green field to be used.

And finally, we can say that we are receiving requests to use API to create proof of concepts of services based on messaging (RCS-e and also require info about if we can provide same API for XMPP) from companies creating Apps for big brands as retailers, airlines, hotels, banks. They think Apps and rich messaging can be complementary to reach final customers for CRM, alerts, etc. If properly launched and a clear business model designed it could be a good opportunity for Joyn.

Tsahi Levent-Levi said...

Dean,
Where would you place Rogers One Number initiative? It is IMS (in a way), with a Telco-OTT flavor to it. And it seems like something that might actually work.

paulindo said...

Hi Dean,

Agree with your analysis and suggest 3 reasons why RCS will struggle.

1) Linking it to IMS which is not setting any track records for adoption and also starting to look like a sideshow in the "any IP" connectivity stakes

2) Death of ubiquity (communications divergence) which your blogs have addressed and where communications is driven by (global) communities and memberships - different communities for different social interaction

3) Addressing and the federated directory - how users know about each other and use friendly names (not numbers). I don't see much thought in this area

Often Telco's are looking at it from a Technology perspective, assuming the problem can be solved by having a standardised rich client/app. But its actually the behavioural issues that they are missing. Connectivity is solved. The problem is if there is choice in OTT-style services what's going to "communitise" users around RCS?

Superwallah said...

I can tell you a service that was driven by late adopters: Facebook.
Early-adopters were on MySpace. Facebook copied, improved and succeeded.