Over the past couple of years I’ve been helping operators understand ways they can harness open innovation. Using a quote from Henry Chesbrough, UC Berkeley, from his book ‘Open Innovation’ to explain:
“Open innovation means that valuable ideas can come from inside or outside the company and can go to market from inside or outside the company as well. This approach places external ideas and external paths to market on the same level of importance as that reserved for internal ideas and paths to market during the Closed Innovation era.”
There are a number of examples of operators putting in place the programs to enable them to harness Open Innovation such as:
- O2Litmus – covered in this article
- Verizon’s Open Developers Initiative – covered in this article
- Telecom Italia NexTIM – covered in this article
- Telenor Content Provider Access (CPA) – covered in this article
- Orange Partner – covered in this article
- And many more such as SingTel Partners Program and Sprint’s Business Mobility Framework.
In this work I’ve spent most of my time with the application development community understanding their needs, and getting them in front of operators so operators understand what application developers need, NOT what operators think they need.
Just picking on a few of the critical issues:
- Capabilities from the network (e.g. location, presence, billing, address book, messaging, single sign-on, age verification, short-code provision, call control etc.) must be exposed by REST (REpresentational State Transfer) and/or SOAP/XML. Simple and stateless, like the popular APIs (Application Program Interface) on the internet. Not ParlayX, which is too complex, does not have credibility with application developers and hence will stifle open innovation.
- Don’t nickel and dime application developers, charging for each location dip or presence check will stifle open innovation. Rather the operator should create the conditions to share revenue, open innovation enables an operator to outsource risk and some operational costs.
- To date most operator ADCs (Application Development Communities) have been ineffectual compared to a direct sell into the operator, so there’s a significant credibility gap. If an operator launches an ADC, it must used. The ADC must be owned by at least the CMO, ideally the CEO, and processes put in place so it becomes part of ‘business as usual.’
Web2.0 open innovation models such as Apple’s iPhone App Store, Programmable web, Facebook, Google’s APIs, and SaleForce.com’s AppExchange provide a template. For example, Facebook in August this year achieved over 100 million users, with over 24,000 applications and 140 new applications added per day.
Operators provide the ideal channel to market for many applications, with control over their network and devices, a billing relationship with the customer, a nationally recognized and trusted brand, high-street store presence, and a strong position in the industry’s ecosystem. However, if an operator is not as effectice as the Web 2.0 models menioned above, developers will ignore then. Which means service innovation is lost to over-the-top services, further pushing operators down the path to become just an ISP (Internet Service Provider).