Omnitrol Networks

A new chapter opens in my professional career. I've just joined Omnitrol Networks, a start up developing new software to integrate intelligent sensors (as in RFID, M2M and others) with advanced services in the network. While I'll miss my colleagues at Sun, I'm excited about this new opportunity to develop a new emerging market and industry. I will lead the product and marketing efforts as the new VP of Products and Marketing. Read the complete announcement here. Our offices are right next to the Google campus, so we'll get good vibes.

Amazon and Utility Computing

Fascinating article here about Amazon's new bet on utility computing. Jeff Bezos is now going to sell computing power and storage to companies looking to access these resources over the web. Utility computing (or Cloud computing) is nothing new. Sun Microsystems launched its own hosted services based on N1, nearly 3 years ago. What is interesting in this announcement, is that Amazon has been able to integrate computing power, storage, network and provisioning software and offer it as a service while other companies are only starting to implement or talk about convergent IT infrastructure. I'm not sure if this is going to skip one adoption cycle but if Amazon (and other large companies or service providers) is going to be successful, this is going to upend the IT industry in a very significant way. I'm always wary of believing in quick adoption rates and this is going to take time. The route to utility and cloud computing will need more salesforce.com companies first before a move to a hosted converged infrastructure. As any platforms, you need developers to make it meaningful.

Data Center Evolution

Over the last 40 years, the data center has gone through a tremendous evolution. From mainframe to distributed computing, the challenges have remained the same: Manage complexity, reduce operational expenses, optimize utilization of assets and make the business and its employees more productive and flexible. Telecommunications, like no other industry, has been a key driver in this evolution. For many years, Sun has been working with our customers to deliver data center consolidation products and services. These are organized around server, storage, network and application consolidation.

Sun recently announced that the UltraSparc T1-based servers will be able to run multiple operating systems simultaneously. This is significantly changing the way data center will be run in the near future. Vendors like VMware have also been working hard at virtualizing data centers and desktops. Sun's Solaris 10 already is an option for running on VMware, and the Sun Blade 8000 will be certified to run VMware ESX Server 3.0.1. With Xen, though, multi-OS virtualization will essentially be built into Solaris.

Google acquires YouTube

I discovered YouTube a little bit over a year ago and thought this was going to change the video network landscape quite significantly. To be very honest, I believed a TV network would have been the acquiring company, because I initially saw parallels with Napster. Video is clearly becoming the de facto digital content on the web and will continue to dominate as innovation brings increased bandwidth and improved digital cameras and phones. Phones will inevitably become the main production and consumption point for video as these innovations take place.
The players around the network triangle are at work again. I wouldn't be surprised to see handset manufacturers integrate software into their devices to facilitate the use of services like YouTube.

Ubiquitous Network Triangle

A picture is worth a thousand words. What are the components of the ubiquitous network? I drew this picture to illustrate the dynamics at play in the new converged network.Three different players are fighting for one customer. Names are self-describing. Historically, the equipment manufacturers used to make the network and handheld equipment but this is now changing. The key question for all these companies is: Who ultimately will control the customer experience? Who will become a commodity?


Now a quiz: Where is Google on this picture? Apple? Yahoo? RIM?

New dates for daylight savings time

On August 8, 2005, the Energy Policy Act of 2005 was signed by the President of the United States. This Act changed the dates of Daylight Saving Time (DST) in the U.S. Beginning in 2007, DST will begin on the second Sunday of March and end the first Sunday of November. Congress retains the right to revert the Daylight Saving Time after a study of the Department of Energy is complete. Canada is likely to follow the change as well. In Australia, last April, the end date was postponed by one week because of the Commonwealth Games (got their priorities right down there). I haven't found any other upcoming changes like this elsewhere (complete list of worldwide DSTs).
At first, this change seems to have all the ingredients of a Y2K Bug re-run and its expensive consequences. The main difference, in the DST case, is that the majority of applications relies on the operating system to provide the exact time instead of hard-coding it in the case of dates (YY format). After the signature of the new act, Sun made available a Solaris patch to address the new change of date. Like any other patch installation, this would require regression tests, but based on our previous experience, this date change can happen very smoothly as long as it is planned properly. Since Solaris is the de-facto carrier-grade operating system, our support teams are ready to assist our telco customers for this critical transition. I've created an alias to help answer questions regarding the DST change in the telecommunications industry.

Sun takes center stage at largest TeleManagement World ever

This year's TeleManagement World (TMW) edition drove nearly 3,000 attendees to Nice in France, where the TeleManagement Forum (TMF) announced the creation of a new go-to-market program (Prosspero) joining forces with the OSS Through Java initiative which will now be part of TMF. Keith Willets (TMF's CEO) and Glenn Edens from Sun unveiled the new market initiative during the opening session of TMW.

At the conference, Sun demonstrated the first integration of last year's SeeBeyond acquisition (now Java Composite Application Platform Suite) and the OSS/J-based trouble ticket integration hub which created a lot of interest from the customers attending the conference. The integration demonstrated the benefits of a flexible IT infrastructure based on Business Process Management (BPM) integrated with an existing OSS/BSS platform. Sun and our partners have submited the OSS/J trouble ticketing hub as one of the first Prosspero solution pack.

On another important topic, Nokia announced their support for the Solaris 10 platform in their OpenEMS suite which demonstrated increasing momentum for Sun's carrier-grade Operating System to enable true interoperability and support for convergent telecommunication protocols.

IPTV deployments

Last week, our partners at Tech Mahindra organized a dinner/presentation with Clive Selley CIO, BT Wholesale to discuss key challenges in IPTV deployments. Clive shared some of BT's plans, competitors, assets and challenges for IPTV. BT's DSL network services more than 8 million subscribers across the UK and is working aggressively to roll-out IPTV services in the next months. The OSS/BSS integration was one of the key challenges that BT is looking at. It's important to note that Tech Mahindra was one of the early supporters/adopters of the OSS/J initiative who recognized the value of using open standards for OSS/BSS integration - their main expertise.
Content (interactive service, video-based applications), customer experience (programming guide, personalized content/identity, and communications services including presence, voice, IM) are other clear challenges that need to be addressed to make IPTV a real business model for carriers. I shared with the group, how carriers like BT can help content creators promote their content, maximize their advertising revenue, and accurately track usage in a way that is unique to IPTV technology. This will provide a clear business differentiator in delivering television services to the projected 53 millions IPTV subscribers by 2009.
In the coming months, I will share details of Sun's initiatives and products that are helping carriers successfully deploy and manage IPTV services by harnessing participation on the network and the power of Java on the STB, network infrastructure, and back-end systems.

OSS/BSS: The New Frontier

The telecommunications industry is rich in acronyms, one of the best known but also the most underappreciated is probably OSS/BSS (Operational Support Systems/Business Support Systems) or OSS for short. Nothing is less glitzy but also more critical to keep a network up and running than a performance management application or an alarm system. Nothing sounds less exciting but at the same time is more instrumental in deploying new services than a trouble-ticketing system or mediation software. Most recently, the Director of converged services for a large carrier told me that 80% of the work to take new services to market lied in the operational aspect (provisioning, billing, monitoring). No surprise then that worldwide, carriers are spending in excess of $30B per year on their OSS infrastructure. According to the TeleManagement Forum (TMF), for every one dollar spent on OSS software, an additional $1-4 is spent on integrating that software into an existing environment. Needless to say that this a one-time effort that is repeated by all carriers around the world.

Just as communications service providers had to adapt their existing OSS to deploy IP VPN, VoIP, and 3G services, the recent mergers have added yet another challenge. But the most difficult of these transformations lies ahead of us: IP TV and Fixed Mobile Convergent (FMC) services are just being readied and their complexity is of another magnitude, due in part to the value chain going outside of the traditional network boundaries (content, advertisement, partnerships, circle of trust). This is the new frontier. Flexibility and agility are paramount features of the Next Generation OSS to be able to rapidly deploy, monitor and bill for new services that we can't even fathom today. As for IP TV and VoIP, I actually believe that superior customer service and simplified customer experience will be key differentiators for carriers. The simple reason is: for any product and services, the easier it is for you to interact and purchase (without the sticker shock), the more you consume, but we are still very far away from that experience.

A few years ago, when we looked at how Sun was going to address these upcoming challenges for our customers, we were obviously not going to throw hundreds of thousands of consultants into this problem, but instead looked at how open standards, innovation and participation could bring us closer to the solution. With our industry partners and TMF's endorsement, Sun has been leading the OSS/J initiative to simplify OSS integration by maximizing usage of Java-based middleware and other IT technologies (XML, SOA). Some of the carriers actively participating are: BT, CANTV, Covad, Vodafone. The first results were beyond our expectations (see a recent article about these benefits), and as carriers are going through the second or third deployments, the results are even greater. From a Sun perspective and to be brutally honest, we have reduced part of the multibillion dollars integration tax (where Sun was not playing - doesn't have, won't have an army of consultants) into a $800 million dollars middleware opportunity (where Sun has changed the financial value proposition of software delivery) that is helping the entire industry make operational support systems truly operational. Couldn't have done it without the community of developers working hand in hand with standard bodies like TMF. I recommend you check the announcements from Sun and our partners at the upcoming TeleManagement World in May in Nice to know how we are taking this to the next stage, big news coming!

Why is network identity important?

Just about every small, medium and large company in the developed world is hugely dependent on the internet: communications, supply chain, design, marketing, finance, sales, support, and other critical business activities are using the internet to increase efficiency, scale, and economic growth. Consumers, citizens, communities and families are now relying on the network to better communicate, learn, share knowledge, and increase mobility. The reliance on the network means that outages and virus outbreaks are simply no longer acceptable. Phishing and pharming among other network criminal activities are responsible for companies and consumers losing billions of dollars.
Figures don't include lost opportunities due to consumers' and suppliers' wariness of internet-based transactions. Authentication is one of the biggest pushes by online watchdogs. In a recent conversation with Paul Mockapetris who co-wrote DNS, we discussed how DNSSEC can better guarantee that the information retrieved from a web site actually came from the intended web site and not from an imposter. A user can eliminate spam by opting to receive e-mail only from people who have authenticated their identity. To put it simply: strong authentication means trust, trust means more transactions.

Why does it matter to carriers and their partners?
According to the Liberty Alliance Project there will be 1 billion Liberty-enabled devices and
identities by the end of 2006, specifically:

• 120 million citizen identities in the e-government sector
  
• 585 million identities and devices in the mobile and telecommunications
  sector
  
• 72 million online service provider users able to leverage Liberty identity
  specifications
  
• 20 million Liberty-enabled identities in the technology and business sectors
  with organizations managing a variety of B2B and B2C services

Communication service providers manage more identities than anybody else on the network. The advent of converged networks is making the distinction between network subscriber (who pays the DSL bill?) and network users (who downloads what?) more important from a security, personalization, and reporting standpoint. While transforming their networks to support triple or quadruple play, carriers need to work with partners to develop circles of trust that will increase participation and transactions. At CTIA last week, Lucent and Sun showed a prototype demonstrating their collaboration to simplify subscribers' access to wireline and wireless services whether they are based on web, mobile telephony, IPTV or IP Multimedia Subsystem (IMS) architectures. Over the next months, I will discuss other solutions and how Sun is helping carriers simplify identity management, improve subscribers' experience, and monetize their networks.

Why is participation important?
Why is music download on phone handsets measured in billions of dollars (compared to the paltry music download business on PCs, even with iTunes)? Because phones are authenticated (with a Java SIM card), content and network providers can ensure legitimate use of media content. Earlier this month, Movielink and CinemaNow have offered consumers the opportunity to download new movies at the same time as they were hitting the DVD shelves. The DVD industry, like the CD, floppy disk, VHS, and LP industries before, is poised to disappear sooner or later. The participation on the network is changing the way digital content is created, managed, distributed, and consumed. The result is more revenue for content creators as authentication and convenience fuel commerce. In turn, the success of music download on the wireless network can happen on all networks for all types of multimedia content.
Network identity should not be under the control of only one company (a la Passport) or even one single industry (banks and governments have a role to play in federating network users
identities).

To finish on a humoristic yet important note, here's a clip describing what identity should not be.

New data retention rules for European service providers

The European Union recently passed a new legislation to force fixed-line, mobile, and internet service providers to keep details of their customers' communications for up to one year
(only 6 months for IP based communications) for the prevention, investigation, detection and prosecution of terrorism and organized crime.

The data retention directive defines the data required to be kept to:

• trace and identify the source and destination of a communication,
  
• identify the date, time and duration of a communication, and
  
• identify the type of communication, location and type of communication device The content of the communications will not be recorded. I counted over 44 data points to be stored based on the type of communication network used!

The European Union countries will now have until August 2007 to implement the directive, and according to the legislative text: "it is appropriate to foresee that Member States reimburse demonstrated additional costs incurred in order to comply with the obligations imposed on them as a consequence of this Directive". Still the new directive will have a deep impact on the European communications industry. As an example, since text messages are delivered via the SS7 network, data should be retained for one year. Over 100 billion text messages were exchanged in the EU last year, even with a minimal 1 KB of data for each (hopefully we'll learn from Y2K here), it's a new 100 TB of data to be stored. How many emails and VoIP calls will the 230M internet users in the European Union send every 6 months is certainly in the same order of magnitude as are fixed and mobile phone calls (terminated or not). In total, it's probably several Petabytes of new storage to be deployed in the carriers' infrastructure.

Today, over 1/3 of the world's data is archived on Sun storage tape library equipment thanks to our recent acquisition of StorageTek, and Sun can help reduce the strain on the carriers' staff, budget... and sanity. The upcoming IMS infrastructure will improve the management of subscriber data across all applications and networks, and reduce the need to develop usage collection in multiple silos.

Communications service providers can also use the new stringent data retention rules and turn them into a competitive weapon rather than another cost center. By collecting usage data from multiple applications and networks in a single place, carriers can unlock vital business intelligence on how their subscribers are using their networks. This directive represents an
opportunity to re-think revenue assurance and seriously address revenue leakage and fraud management across all networks.

Mega deals are reshaping the telecom landscape

It's time for a quick recap:

• Sprint to buy Nextel for $36B- December 2004
• SBC to buy AT&T for $22B - January 2005
• Verizon to buy MCI for $6.8B - February 2005
• Telefonica to buy O2 for $32B - October 2005
• AT&T to buy BellSouth for $67B - March 2006

The telecom industry is responding to price decline, revenue loss and intensified competition by consolidating itself like there's no tomorrow.
The strategy reminds me of Barbara Tuchman's Guns of August. A Pulitzer prize winner, the book provides a detailed account of the first month of World War I during which the generals made battle plans and decisions based on previous conflicts ignoring the technology changes which resulted in mass slaughter.

The industry is in the middle of a massive technological transition, going from old-fashioned circuit-switched networks to more advanced IP-based networks to offer services including video, voice, high-speed Internet access, and wireless. The trend is also putting price pressure on equipment makers, because open standards, IP-based gear is generally cheaper than the specialized equipment it replaces. As the number of service providers continue to shrink, they are regaining buying power and are squeezing out deep discounts from their suppliers.

The carriers' consolidation is now starting a Network Equipment Providers (NEP) consolidation as illustrated by Cisco acquiring Scientific Atlanta and the merger talks between Alcatel and Lucent. The last combination could create the world’s biggest telecom equipment maker with customers and operations around the world and with strengths in voice, video and data across wireless and broadband networks. The potential new company would bring strong wireless, broadband and IMS assets to address Fixed Mobile Convergence opportunities, but the merger would also create the world's largest network system integrator to better compete against IBM. Because of overcapitalization and the high cost of raising capital, the carriers are looking at outsourcing as a solution to manage their infrastructure. Alcatel, Lucent, Ericsson, Nortel, and others have dramatically increased their services capabilities to a point where it represents 30% or more of their total revenues.

There's room for more consolidation especially to build global players with Ericsson, Juniper, Ciena, Tellabs, and Motorola (test: who is acquiring whom?). What Huawei and ZTE could do is everyone's guess, but let's not forget that prices are driving this market and the Chinese equipment makers are not to be underestimated. In this environment, Sun is the partner of choice for the NEPs and already provides carrier grade equipment and integrated software to reduce cost and complexity of the next generation network infrastructure.

DNS servers in web 2.0

Domain Name System (DNS) is the Internet directory: it points people and applications to resources on public and private networks, for example allowing you to type “www.sun.com” instead of //209.249.116.195 in your browser. DNS is like virtual “electricity” for the Internet. Without DNS, mail could not be delivered, ATMs and cash registers would go offline, and few networked applications would function.

There are an estimated 7.5 million external DNS servers on the public Internet only. Communication service providers are heavily relying on DNS to point users to their favorite web site, video streaming server, ecommerce portal, or VoIP buddy on the other side of the planet. An overloaded DNS slows down the overall response time and affects the user experience. And this is the best case scenario: in 2004, a widespread Akamai DNS issue prevented popular website addresses like Yahoo, Google, Microsoft, Fedex, Xerox, and Apple to be resolved. In April of last year, Comcast suffered a DNS outage. In May, Google was out of commission for 15 minutes (that's pretty big compared to telco standards). Four out of five of the DNS servers in the world are vulnerable to hacking attacks.

How is this going to evolve ?
If today's 80 million registered domain names seem to represent a daunting task to manage, ENUM will dramatically increase this by providing a single number that can be translated
into the DNS system so there will be a single point of contact for an individual, be it telephone, mobile, instant messaging, or email. So how about managing 2 billions of these now ? Telecom carriers seek a simple addressing mechanism to help them deploy IP-based services such as multimedia messaging service (MMS), push-to-talk, and session initiation protocol (SIP)-based voice service. They also need to be able to implement these services across different technology environments such as global system for mobile communications (GSM), code division multiple access (CDMA), and fixed-line. ENUM makes all of this possible. To put it simply, DNS will be even more critical for all our future networked interactions.

What does it mean from a business standpoint ?
When DNS is under attack or just slow to respond due to increased traffic, the network service provider is the first one to be blamed. The user perception is "the network is slow" even though the connection is probably humming at 5 or 10Mbps or more. Next, "the web site is slow" while the web and application servers are running just fine but the DNS servers are collapsing under the load during the shopping season (and the cash register is not ringing up). As we are
increasing our reliance on the network, customers' frustration can only worsen unless service providers are tackling this issue rapidly.

How to address it ?
Today, Nominum and Sun announced an agreement to deliver record breaking industry-leading DNS and DHCP software to wireline, wireless and cable operators around the world. Sun Fire servers powered by AMD offer the choice to run Solaris 10 or Linux, and our most recent
innovation with CMT based servers will provide unrivaled performances.

Spring VON in San Jose

The Spring 2006 VON Conference and Expo is opening its doors this week in San Jose. Several of my team members will be speaking at the event covering topics like security, ROI,
and competition for IP Communications. Jeff Pulver managed to make VON "the" voice over IP
conference and meeting point for the industry, and this year's spring conference
will probably set another record for all the VON venues so far.
Each new year seems to be poised to become the inflection point for VoIP adoption. Today's 16
million VoIP subscribers are still a small fraction of the over 200 million broadband users and an even tinier part of all the 3 billion+ worldwide phone lines. The 16 million figure doesn't include the 74 million Skype registered users (with a record 5 million users connected at the same time),
or the over 70 million monthly users of Yahoo Messenger who can now make PC-to-phone
calls. But what will speed up VoIP adoption moving forward ?

• Improve and simplify customer experience. Guaranteed quality of service, (good) customer service, security, and safety are the traditional Plain Old Telephony Services (POTS) features, but today's VoIP services don't always provide that level of service. On top of that, since VoIP prices are going for the floor, service providers need to provide a unique customer experience for IP Communications including video, collaboration, unified messaging, call manager, virtual call center, web services integration, directory, and calendar to create potential for premium prices. Sun provides the Java based middleware software that powers all these applications, but we are also driving creation of innovative services through our Open Service Delivery Platform program.
  
• More mobile handset supporting VoIP with WiFi capabilities. For instance,
  with RIM adding
  WLAN capabilities to its blackberry phones, it means one more step closer to
  fixed mobile convergence. The more recent announcement of RIM integration
  with Google talk is a good indication of what's to come in IP Communications
  partnerships. Carriers have to respond to these new services or risk to be
  disintermediated from their customers. Sun is part of the expert group which is
  working on JSR 180 to
  define the APIs to enable SIP-based applications for Java handsets. Stay tuned
  for more on this soon.
• Open standards based infrastructure and services. What happened to the internet in the 90s, will happen to IP Communications which are just the next level up. I recommend reading the discussion on Jonathan's blog to draw the parallel with documents as well. This is all converging anyways. Open standards are also introducing new and aggresive competitors that require a new and different response from the telcos: buddy list, ring and ringback tones, personalized services for specific communities,integration with all digital content (music, video, TV).
  
• And as far as performance, reliability, and low TCO: it's rock solid carrier
  grade servers and Solaris 10 integrated with SAF-compliant highly available software plaftorm. If you combine this with our newest CMT servers, you got yourself an eco-friendly engine to profitably deploy any IP Communications solution.

AT&T agrees to buy BellSouth for $67 billion

Never a dull moment in this industry, really :-)
Today's AT&T's announcement to acquire BellSouth didn't come as a surprise, but a few numbers are just mind-boggling:

• 67 as in $67B price tag for BellSouth, nearly 7 times Wall Street's 2006
  cash-flow forecasts, an 18% premium that AT&T is offering for each BellSouth
  share.
• 1600 as in $1,600 paid for each BellSouth's subscriber: 7.2M long distance, 9.9M local, 2.9M DSL, 22M wireless (40% of Cingular's 54M users).
  
• 310,000 as the number of employees who will work for the combined company if
  the deal is approved. Tough times ahead if DT's negotiations are of any indication.
• 130 as in $130B in annual sales for the new AT&T (Verizon Communications clicks at $75B), BellSouth's profits fell over 30% last year. AT&T will now be in the Top 10 Global 500. NTT, the second telecom company in the list, barely makes the top 20.
• 10 as in the 10th anniversary of the 1996 telecom act. 11 as the number of occurences of the word "Internet" in the actual text to compare to the 284 (broadcast) "Television"s. No mention of IP TV or VoIP.
  
• 22 as in the 22nd anniversary of the AT&T break-up. The purchase of BellSouth would recombine the former "Ma Bell" with four of the seven original Baby Bells regional telephone companies. Verizon is certainly looking at Qwest and Alltel to stay in the game.

What's ahead for the new company and the industry overall ?
Some of the $2-3B/year savings will come from data center consolidation.
AT&T and BellSouth together will need to integrate and manage the identities of 70M local, 30M long-distance, 10M broadband and 54M wireless customers on a convergent IP network. "Technology changes and convergence are shaping a new competitive dynamic and creating tremendous opportunity", said Duane Ackerman, chairman and CEO of BellSouth. AT&T is now creating a serious rival to the cable operators with the 10M broadband users (and the 54M Cingular subs) who could pay for TV services. That's a lot of eyeballs for content owners and advertisers.
As the newly combined telco giant is integrating networks and services, the billing, CRM and other OSS/BSS applications are going to require some significant re-architecturing to support subscribers and services. SBC and Cingular have been participating to OSS/J projects to integrate off-the-shelf software they bought overtime. More on how OSS/J can reduce Capex and Opex for carriers.
Finally, AT&T will apply a lot of its weight to the discussion of net neutrality.
AT&T is vehemently debating over the future of the Internet, and along with Verizon, wants to create a "toll lane" on the Internet, in effect charging content providers like Google extra for guaranteed service. Ed Whitacre (AT&T CEO) drew attention last year when he told Business Week magazine that "for a Google or a Yahoo or anybody to expect to use these pipes for free is nuts". There's a lot of room for participation here...

Mobile Virtual Network Operators

MVNOs are revolutionizing the way communication or media companies market wireless services, target specific communities with personalized services, establish new partnerships, and experiment with WiFi.
I recently read about Sky Deaton and his new MVNO Helio, a partnership between Earthlink and SK Telecom. The launch in spring will include an exclusive deal with the popular social networking service MySpace and some interesting Korean handsets. One of the phones (pearly-white case) is named YT, after the female skateboarder in Neal Stephenson's Snow Crash, a good indication of the targeted audience :-)
We can expect creative outlets and partnerships since the Helio's executives looked at SK's TTL zones/lounges for inspiration. This would truly bring differentiators to the new virtual operator.

Today, Sun is helping MVNO deployments around the world by focusing on the following elements of the value chain:

Innovating on the device
The magnitude of Java services growth is remarkable as operators are expected to
increase these service revenues to $15 billion by 2008, according to industry
analysts. Java offers new business opportunities to mobile operators by
increasing network traffic, encouraging use of premium services, and allowing
revenue-sharing with content providers. Specifically, Java is breaking down
device fragmentation barriers for MVNOs:

• Virgin Mobile USA uses Kyocera's phones running Java to provide subscribers greater access to games.
• ESPN's Sanyo-made CDMA 1x EV-DO clamshell running Java offers automatic push service, the ability to personalize content delivered to the phone, one-touch access to sports news and real-time game updates.
• Four out of the six Boost Mobile phones are Java enabled to offer a wide array of application/ringtone choices that provide a little of everything to satisfy all tastes.

Building the converged IP network
An IMS-enabled network that allows seamless roaming and
terminating of IP services over fixed and mobile networks will generate an
increase in MVNO initiatives. Amp'd, Disney, and other MVNOs are looking at incorporating WiFi into their offerings.
At Sun, we have been relentlessly working at integrating Solaris 10, Java Enterprise Systems, and ATCA carrier grade servers into IMS solutions. The value of integrating Sun's identity management suite with the Home Subscriber Server (HSS) was recently highlighted in a whitepaper.
The HSS stores key subscriber information, and application information, allowing
users to locate and communicate with other subscribers. To integrate IMS
infrastructure with the existing network, operators will need connectivity
between the HSS and heterogeneous legacy systems, and this is what Sun's
identity management suite does extremely well.

Managing the back end

• Billing and CRM are fundamental business processes of MVNOs (and MVNEs).
  Order entry, device management, provisioning, and service assurance are other
  elements of the OSS/BSS infrastructure that require integration and web enablement. Sun is driving NGOSS implementations, leveraging our community efforts with the OSS/J initiative (using SOA and Java).
  
• With branded content from both inside and outside the organization, proper
  billing of services internally and externally will be extremely important to the
  MVNO business plan. Highdeal's Transactive engine provides pricing flexibility and is IMS ready to support payment convergence. Highdeal is also an OSS/J community member.
• MVNOs will also need to interface their BIDW systems with other organizations. According to the 2005 Winter Corporation TopTen program, Sun platforms run 6 of the 10 largest data warehouses.

3GSM Barcelona, Spain

The annual 3GSM conference took place last week in Barcelona. The change of venue was welcome by most of the 50,000 attendees. All the good French food in Cannes couldn't compete with the hotels, public transportation, cellular coverage, and the Fira of Barcelona. This year's participation surpassed all previous years (2005: 34,000, 2004: 29,000, 2003: 26,000, 2002:24,000).

Convergence between fixed telecom, internet and entertainment was the main theme of 3GSM. Software makers, device and network equipment manufacturers were all touting their support for convergent technologies (SIP, IMS and UMA among others):

• Nokia introduced new phones including the 6136 supporting UMA connectivity.
• Motorola received the award for the best 3G phone and presented the new A910 used by BT Fusion.
• Vodafone selected Ericsson's IMS.
• NTT DoCoMO showed their new HDSPA phones from Motorola, NEC and Fujitsu.

Fixed Mobile Convergence (FMC) represents a clear opportunity for convergent service providers to offset the loss of revenue due to Fixed Mobile Substitution (FMS) and new competition from VoIP service providers. At 3GSM, I presented a service roadmap for carriers to provide a fixed mobile convergence experience to their subscribers while transforming their network to fully support the above technologies. The key take aways were:

• Java is the de facto standard for FMC service development and deployment
  
• Identity is the common, most critical component across converged services, service delivery platform and IMS.
  
• Participation is key to address the device, services, network, data center, DRM and OSS/BSS challenges created by FMC.

Content was king at 3GSM again this year. A complete hall was dedicated to all forms of content for the mobile industry. I really wonder when Google, AOL, Yahoo and other traditional internet outlets will be actively participating to the annual wireless fest. In their absence, the world’s largest operators, China Mobile, Orange, Telefonica, TeliaSonera, TIM, T-Mobile, Turkcell, Vodafone and a few others announced their intention to launch Instant Messaging interoperability using the "calling party pays" principle.
This is certainly going to increase traffic (and revenue) between the participating carriers but what about the interoperability with Yahoo, AOL, and Microsoft IM services who were clearly not invited to participate?

Industry analysts and the convergent network

The annual Sun Analyst Summit took place this past week at the St Regis hotel in San Francisco. This is
another great opportunity to share our vision, strategy and most recent successes with the analysts from Gartner, IDC, Yankee, Forrester, Tower, and other firms covering the telecommunications and media industries. One comment I've heard a few times during the 1-on-1's was: "Sun, you have a great story, you need to tell it more!". So here's the 30 seconds message.

As we are entering this new age of participation, Sun is innovating to enable service providers to acquire, retain, and monetize subscribers in the converged network world in three different ways:Sun's innovation with Java on the client side is increasing the consumption of IP based services and content (>700M Java phones in 2005, OCAP's recent announcements, HANA, OMC, OSDP).

• Sun's products are building the IP convergent network with our partners (Solaris 10 for carrier grade OS, ATCA for NGN, OSS/J for NG-OSS, Java Enterprise Systems middleware for NG-Services).
• Sun is transforming the business of managing and delivering digital content (ILM, Media Asset Management) with Java end-to-end.

And now for something completely different and for those who missed them: all the Superbowl Sunday commercials will be re-broadcasted on Sprint's mobile network.

Pixar and Disney join forces

This was the most important announcement of the week and it has the potential to dramatically impact the way digital content is created, distributed and consumed. Media companies have always been wary about Internet/Network-based delivery of content because of piracy. According to MPAA between 400,000 and 600,000 movies are illegally downloaded each day compared to the 1.2B pirate CDs sold and 76M counterfeit DVDs seized last year. The January deal has the potential to take the market into a new direction.

Steve Jobs will undoubtedly bring a great understanding of technology and consumer design to Disney's board. How is he going to influence Disney's overall media content delivery is anyone's guess. Based on Jobs' track record, the following could happen:
Full end-to-end proprietary delivery of Disney and Pixar content through iTunes portal using QuickTime/AAC format and FairPlay's digital rights management on a limited list of compatible portable players (iPod and other
Apple devices only). Last year, Disney announced plans for a mobile virtual network operator (MVNO). No doubt, the media giant will brand a few cell phone services with preferred access to Disney's (ABC,ESPN, Pixar) content, turning the wireless (and broadband) carriers into more bit pipe providers, cornering even more revenues in the process. Apple could embed a GSM or CDMA chip (with EDGE support) into the iPod to address what the ROKR totally missed: instant music gratification (who wants to store only 100 songs on a phone and be wired to download new ones?). Sounds good from a shareholder point of view? Short term: yes, but take a look at the results of this approach with the Macintosh and Apple II's marketshares. Consumer device manufacturers and other media companies will certainly respond to the threat by creating new open standards.

As a different approach, Apple could license (new revenue source) its DRM technology for use on copy-protected CDs and DVDs, and broaden the content to be shared on their devices and others'.

NBC just signed a deal with Apple to sell downloads of some of its TV shows on iTunes. It's $0.99 with cable on demand versus $1.99 on iTunes but you get to keep the program on your player (8 million videos have been sold on iTunes since the launch late last year).
Apple could go further and open source iTunes and DRM to create a community of content providers, device manufacturers, and service providers that would significantly increase the total market for media download by providing interoperability across the whole value chain. The only drawback: Apple/Disney need to continuously stay on the innovation edge and provide the best consumer device and content :-).

Last August, Sun announced the Open Media Common initiative to develop open, royalty-free digital rights management solutions and promote the creation, duplication and distribution of digital content while making sure that creators and owners get compensated. Drive participation in the network to increase revenue. The convergence of media and telecoms over a single IP network represents the most fascinating transformation and largest opportunity for this industry. Proprietary will not work.

Rwanda and the participation age

Fundamental disruptions are occurring because we are all connected to one another; last month John Gage introduced me to Greg Wyler and I got first hand examples of what these disruptions meant in Rwanda. Greg just acquired the state-owned Rwandatel in a privatization transaction. His vision is universal, cheap IP access to achieve the highest teledensity in the next 5 years to support economic development. Today's wireless rates in the region (Tanzania, Kenya, Uganda, Rwanda) are over $.20/min, too expensive for Rwanda where 50% of the 25,000 subs can only use their cell phone to literally "ring" each other. Terracom (the new company name) is laying optical fiber (btw people dig out copper, but not fiber unless they can invest in a $15K termination point) throughout the country to reach 2,500 schools.
The entrepreneur, turned telco CEO, wants to connect students to the network but power consumption is a critical factor (both access and cost) for the client. Greg also said that viruses have a much bigger impact in a country like Rwanda than anyone here can imagine. We discussed ultra thin client Sun Ray technologies that have been successfully deployed in schools, reviewed power consumption, different form factors, VoIP integration, and developer communities.
It is fascinating to see how technology brought to an internet-starved place by a passionate individual can positively impact people's life. A sustainable economic growth in a knowledge-based society is what will draw Rwanda into the participation age.

The participation age and telecom

I get a lot of questions about the participation age and what it really means for the telco industry. At the last 3GSM conference in Cannes, I had the opportunity to keynote for Sun (Sun at 3GSM 2006 in Barcelona). My subject was: The innovation will come from outside of your network, and there are several technologies that are key to profit from it. What I shared with the attendees is the following: the time for telcos to develop their own services in their network is over, and because voice services (and data services for that matter)are quickly becoming commodities, they need to look outside of their traditional business models to bring new revenues. ATT just announced declines of over 20% in consumer and 12% in business revenues for long distance.
Carriers need to find the new SMS-on-steroid-like IP-based applications that will generate the next growth wave, or else see their revenues continue to decline. These new applications (or innovation) will come from outside of their networks. That's the idea behind the participation age: harness the millions of developers to work on creating value for your network, bring the new media content to your subscribers' handsets, or integrate the enterprise applications into the rest of the communication systems. Communications service providers need to extract greater value from customers who increasingly will access multiple communications, IT and entertainment services from multiple providers across multiple IP-based networks. You may call it web 2.0, or internet.next(), the idea is the same, and telcos (convergent service providers) will make it a reality.
One key enabling technology that is paramount in this participation age is Java. Java created an environment that facilitated growth in application development, by enabling the communities of developers who took open development platform to heart. Business applications, information gateways, and massively scalable network games, which simply didn't exist before the widespread adoption of Java, are now in common use.

First steps in the Blogosphere

I've been debating for a few months on the value of blogging about my industry and whether or not I should jump into the big pond. So here I am now, writing my first blog...
I'm the director of industry marketing for the telecommunication group at Sun (bio). This industry is at a critical crossroad and will be instrumental in accelerating the next wave of innovation. Don't take my word for it, but read my blog and you'll see why.
We have entered the participation age, telecommunication is one of the industries that will benefit the most from it. What better media than a blog to share this vision with my "community" ?
In this blog I'll discuss trends and challenges in telecom (OSS/BSS, VoIP, IMS, Wireless, FMC), how telcos can benefit from it, and how Sun is driving some of the initiatives behind it.