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Friday, December 26, 2014

WebRTC & Academia / Education

Earlier in December I went to the inaugural meeting of the WebRTC "task force" of the TERENA European academic networking consortium. It's looking to exploit the technology for various research and education use-cases, especially videoconferencing between sites or organisations:

"WebRTC may finally offer a path towards a large-scale, low-cost and easy to use real time communication infrastructure for group conversations across institutional boundaries"

(A quick tour of various over-contrived acronymical names: TERENA is currently being renamed GEANT as it combines with another EU programme, DANTE. Historically DANTE deployed the networks & TERENA worked on "developing, evaluating, testing, integrating and promoting new networking, middleware and application technologies". What do any of these stand for? Don't even ask.....).

It turns out that the research/education community is already a major user of videoconferencing, because it has widely-distributed teams that need to collaborate, constrained travel budgets - and, importantly, it has ample bandwidth through the academic network infrastructure and a good supply of smart, technically-savvy people who can work around clunky UIs or tools. In addition, the links with higher education and medicine bring in various other use-cases like distance learning, interactive webinars and tele- diagnostics.

Plus also, in Europe at least, there are often various requirements for cooperation among multiple international organisations, in order to get research funding for big projects. Given that many don't have budget to fly people to meetings all the time, online collaboration is a priority. Similar issues also occur at national levels, especially in larger countries where it's troublesome to bring teams together physically.

There's a lot of use of "legacy" H323, as well as pockets of Adobe Connect, Microsoft Lync and various other platforms. Particle physics research institution CERN switched from a proprietary platform to Vidyo last year, for one of the world's largest video networks.

However, while room-based video is quite widely used today in universities and other reseach sites, it is seen as expensive in terms of both products/licences and ongoing opex from support staff and software maintenance. As such, its use is often rationed. Conversely, desktop conferencing is hampered by islands of poorly-interoperating UC systems selected by each location independently. There has been very little use of app-embedded video or voice communications.

Enter WebRTC, with a goal of extending both reach and depth of video communications for TERENA/GEANT, by lowering costs and extending to browsers across Europe - and beyond, for some larger projects. In addition, some countries' national research/education networks are looking independently at WebRTC for their own local requirements, which (depending on the structure of education administration & technology provision) may also span higher education and schools.

At this point, it is worth noting that GEANT serves over 10,000 locations and (in theory) up to 50 million people, plus interconnects with other research networks elsewhere in the world - for example, an Australian academic network representative was present at the event. Put together, the global academic networking community is equivalent to a Tier-1 telco in terms of reach, but with some important differences:

  • It is mostly publicly-funded, with all the value-for-money considerations that implies
  • Each individual body acts as an enterprise, but with certain communications capabilities and services provided by central national / international organisations
  • It is mostly fixed-oriented using PCs, rather than mobile (today, at least). Interestingly, a lot of devices use Linux or FreeBSD compared to the market as a whole, which means some applications may not be supported
  • There tends to be much greater acceptance of open-source and experimental technologies in production environments - not least because the experiments may be part of the organisations' own raison d'etre.
  • Although groups like TERENA refer to "services" they are generally not rated and billed in telco-type fashion, although some network authorities view their members more like "customers".
  • Security and privacy is a major concern, but more in an enterprise-style fashion rather than a telco-type approach with SIMs etc.
  • There are significant groups of people able to work on new projects - eg open-source - that are usable both internally as well as general web-community projects
  • There are no serious competitive concerns - indeed, commercial organisations often work with academia in areas of "technology transfer" or joint projects funded by government research grants
  • There is little willingness to do "forklift upgrades" - there will usually need to be interoperability with existing equipment, using gateways etc.
There are already a number of early examples and pilots around WebRTC. The French network RENATER (which hosted the meeting) is enthusastic, while the Norwegian UNINETT organisation turned out in force - and had some of the most advanced ideas about extending WebRTC to the broader education and app-embedded sphere.

The latter is an important consideration - as well as doing existing comms use-cases more cheaply/conveniently, my view is that WebRTC has much broader scope if used in a platform-type approach, with a view to new and unexplored application scenarios.

That said, some representives from certain national networking organisations seemed more sanguine and less enthusiastic - concerned by the lack of standardisation , browser support and interoperability questions. Some of this negativity surprised me a bit, reminding me of conservative, legacy-telco managers unwilling to embrace disruptive technologies until they have already been themselves disrupted. Given that most initial use-cases of WebRTC will start as secondary (eg guest access) and it will likely evolve quickly, this recalcitrance seems ill-advised.

(This perhaps reflect an element in the telco-academic world I've noticed before: although it leads in many areas of basic science and networking, when it comes to the telecoms industry and applications, much of the understanding is via the blurry rearview-mirrors of IMS, 3GPP and other legacy standards processes, rather than the Web. There's an awful lot of nonsense spouted by academics about Net Neutrality as well, albeit mostly from the economics groups who seem to like concepts like two-sided markets despite their inapplicability to broadband).

A couple of products and platforms already seem to be increasingly popular - Jitsi had both a presentation and was mentioned as already used by various groups. Janus is an open-source WebRTC gateway project discussed, while Ericsson Labs attended to talk about its OpenWebRTC stack and newly-opened Bowser browser.

Overall, I think that academia (rather than basic school-level education) is perhaps going to be in the vanguard of WebRTC vertical markets during 2015, along with healthcare and finance. However, it may prove rather harder for commercial vendors and platform providers to access - although there will definitely be some opportunities within some institutions, and also the potential to be exposed early to in-house developments and projects which could well be "transferred" to the broader market. I'm hoping to keep in contact with the GEANT, Uninett, RENATER and other academic WebRTC initiatives during the next year.

Friday, December 12, 2014

Net Neutrality does not lead to falling telecom capex

One of the main arguments given against Net Neutrality laws is that it might lead to a reduction to investment by telcos in their networks, as ISPs will be unable to generate sufficiently profitable revenues.

And indeed, as part of the recent US furore over neutrality AT&T has "paused" its investment in fibre deployment - although this is in advance of any ruling being made. 

But I suspect this is being done mostly for effect and as regulatory leverage, not because AT&T genuinely sees much difference in its chances of future revenue streams.

Earlier this year, I published a report examining the potential for "non-neutral" business models for mobile broadband. When I looked into the mechanics of 20 different approaches, from QoS-enabled "fast lanes" to sponsored data, to prioritised MVNOs, the outcomes were that (a) most concepts would likely fail for technical and commercial reasons anyway, and (b) the actual potential incremental revenues were minimal - quite possibly less than the extra costs of more-complex network infrastructure and software needed to enable such models.

Now I've done another bit of research, and had a look at what's happened in the two countries that have actually had "full" Net Neutrality laws for some time. In Chile, a law was passed in 2010.  The Netherlands voted for Neutrality in June 2011 and ratified it in May 2012. 

The interesting thing is that telco capex does not appear to have been reduced in these markets. Indeed, it appears to have risen.

The Chilean regulator, Subtel, publishes annual reports and presentations [eg see page 9 here] including aggregate capex for both fixed and mobile operators. Fixed-network capex has continued to grow since the law was introduced, reflecting expanding use of broadband. Mobile capex has been more volatile, reflecting 3G build-outs, and also in 2013 a change in accounting rules which reclassified handset subsidy from capex to marketing expenditure.

The Dutch regulator, ACM, does not appear to publish aggregate data on capex, so I've collated data from the published financials of the top telcos in that market - KPN, Vodafone, T-Mobile, UPC, Ziggo (since acquired by UPC) and Tele2. The results show continued growth in investment, since a [presumably recession-driven] low in 2010.

(Notes: I've excluded the LTE spectrum auction fees paid in 2013. Vodafone has its financial year ending in March, so I count capex against the previous year ie. FY2012/13 = 2012. I also converted £GBP to Euros at the prevailing average annual rate. Also, I didn't include Reggefiber for which I had incomplete data - 2010/11/12 capex was also rising - €186/291/381m respectively)

While it's quite possible that future Dutch network investment might fall as a result of telecoms market contraction and consolidation, I don't think it's possible to ascribe that to the Neutrality laws - rather, it reflects the general issues globally with a lack of new and compelling service offerings from telcos. Also, KPN's integration of Reggefiber is expected to result in a net fall in expenditure from the combined entity in coming years.

I'd also note that when I was at The Hague conference on Smart Cities recently, KPN highlighted how good its LTE network coverage was, including indoors. This doesn't imply a scaling-back of investment, or a decision that 4G is somehow made unprofitable by mandated neutral business models.

Taking all this together, it appears that there is currently no evidence that enacting Net Neutrality laws results in falling capex and investment. It is also wrong to attribute rising capex to the same laws - correlation is not the same as causation. Indeed, when one digs into the details of each market, other considerations such as network-sharing, changes in competitive structure, new generations of technology and myriad other changes seem to be behind the movements.

None of this should be surprising - there are no proven "non-neutral" business models, and even the ones that have been suggested are unlikely to "move the needle" in terms of revenues. While it is possible that the life of legacy telephony and SMS might be extended if operators are allowed to block VoIP or IM, most advanced markets have ruled out that type of extreme violation of neutrality.

Overall, the "net" outcome is that capex is "neutral" to Net Neutrality, based on the evidence visible so far. Where lobbyists suggest that regulatory changes in the US or Europe might lead to lower investment, this seems likely to be scaremongering and politicking, rather than a rational analysis of existing experience of Net Neutrality, or factors influencing future cashflows.

Tuesday, December 02, 2014

The quiet emergence of WebRTC/Telecom development shops

A subtle but growing theme I've picked up from my recent attendance at TADSummit and WebRTC World is the background growth in development and consulting shops that are addressing communications capabilities.

While a lot of the focus is on "developers", most observers and industry participants automatically think about either (a) in-house corporate software specialists and teams building private enterprise apps, or (b) web and mobile-app developers creating their own products.

However, I'm increasingly noticing the presence of 3rd-party outsourced developers, creating comms-enabled applications or services, on behalf of other companies that lack in-house skills and resources. Among those that have cropped up recently are Blacc Spot Media, &Yet, Daitan and Mera.

I see this tier of companies - some specifically dedicated to WebRTC or telecom APIs, some just new specialisations of larger development firms - as an important part of the "glue" between product vendors/telco-APIs and their customers, whether the latter are enterprises, telcos or standalone web and line-of-business software providers.

This builds on a theme I spotted last year, about ecosystems and partnerships, where companies like Quobis provide a valuable role helping vendors with go-to-market support, if they lack their own customisation or integration teams. Quobis also has its own WebRTC-related products as well as offering services, as does Priologic.(&Yet has its own video-chat platform Talky.io, but that's more of a showcase, rather than a monetised product).

A similar trend is occurring in the Telecom API and platform space, where there is a significant gap between telcos' in-house teams focused on service exposure, and their ultimate target audiences who might actually use those new capabilities. Although some telcos run developer programmes, there is still an issue that the firms who could benefit the most (for example an insurance company or taxi firm) often don't actually employ the appropriately-skilled developers to understand and exploit them.

The idea of outsourced development is, of course, not new in the tech industry - there are countless web-development shops and IT consultancies, while niches such as contact centres have their own specialists as well. However, it is relatively new to see general communications-centric outsourcers, and I view that as a positive sign. 

It is also going to be important to extend the new class of "embedded communications" capabilities - whether voice, video or network-oriented - out to geographic markets where skills are sparse, and beyond the personnel footprint of all but the largest vendors and service providers.

While it is easiest to see the opportunity for WebRTC development firms - especially helping existing companies add interactive voice and video to their websites and apps - it is arguably in the broader Telecom App space that they are needed even more. While certain APIs such as SMS and telephony call-control are fairly self-explanatory, it is likely that telcos will really struggle with go-to-market for more complex capabilities, especially network QoS, sponsored data, identity and so forth. This is going to be a challenge for telco-offered WebRTC APIs and service elements, too.

I remember a telco strategist once telling me (about QoS) "There are 3 problems - firstly, we're not sure it works. And anyway, we don't know how to sell it, and our potential customers don't know how to buy it".

Take-outs from this?

  • Existing IT/web development shops should be beefing up their WebRTC & Telco API skillsets, staffing and marketing presence.
  • Vendors should be identifying, encouraging and cultivating specialist communications developer firms that can assist with go-to-market.
  • Some of the smaller "platform" providers should think honestly about whether they can attain scale, and perhaps focus more on consulting and customisation gigs until they get a commission that can spawn a client-proven product.
  • There is a large gap for WebRTC and Telecom API training and education provision.
  • While WebRTC awareness is growing, Telecom Apps are still the domain of relatively few specialists. Telcos should look to consultancies to extend their reach indirectly, as well as running their own developer engagement directly.
  • It may be a good idea for Hackathons and similar initiatives to distinguish between general development shops and "final" app/web developers.