SDP Global Summit 2011: Light at the End of the Tunnel on Telco APIs

Day 2 of the SDP Global Summit kicked off as strong as the first day with an Analyst panel including Peter Mottishaw (Analysys Mason) and Shira Levine (Infonectics) the source of many of the market numbers on SDP.

Shira showed the SDP market was $2.7B in 2010 and is growing to $5.2B in 2015 with services making up about 70% of the revenue, covering integration, managed services, and cloud.  Finally SDP is moving into mainstream deployment across telcos, rather than a focused niche in messaging or call control, and repeating the theme of day 1 its a project not a product covering people, processes and IT technology.

There was an animated discussion on the role of standards in APIs during the panel session, there’s a clear split between technologists and business people.  Telco technologists see standardization as a necessary precondition for APIs, while business people see it as a post-condition once an API starts to show promise and the main bugs have been worked out with the market to enable all telcos to benefit.  The reasoning for this is APIs can be copied in a day, and the business models behind APIs remain the main challenge for Telcos.

The weight of the discussion was in support of standardization being a post-condition, though its clear there was much emotion from the standardization camp. In their defense the fragmentation in operator APIs is an issue, but the business model and T&Cs (Terms and Conditions) are much more of an issue.  The bottom-line is the operators who are in the market like BlueVia (the customers of the standards guys) clearly stated standardization is not necessary as they’ll copy whatever works.  Telcos please listen to this direction.

I’ve discussed previously the problems with institutionalized standardization in telecom, there’s too much of it, and in many cases its become detached from market needs.  Standards are important, e.g. the air interface, device management, and digital rights management; but standardization should only be wield when it makes business sense for Telcos and not as a universal tool.

The highlight of the conference was the BlueVia;s presentation.  Normally Jose Valles does not attend such telco focused events as they’re detached from market reality, rather he attends developer events like Mobile Monday, Mobile 2.0, etc.  I’d asked Jose as a favor to attend because operators need to understand the reality of making APIs a successful business.

Some of the key points from Jose’s presentation, shown below are:

  • Operators are not attractive to developers because of the sins of the past (e.g. Orange Partner), arrogance and self-interest in their out-reach, and being out of touch with internet technologies and business models.
  • SDP is a swear box, its sold as a panacea, when it is not.
  • The money is not in the long tail, its in the mid tail, telcos should focus there.
  • It takes time, even for the web-centric companies like Netflix to build momentum around their APIs.
  • Telco APIs are not cool, do not call them cool, its all about the business enabled through them, focus there.  Its critical telcos ‘know themselves’ and act accordingly. A forty-year-old acting like a twenty-year-old is just plain embarrassing.
  • Partnerships are key, telcos can not do this alone.
  • Copy APIs that are working, do not follow standards.

The key point of the BlueVia:Twitter announcement is Twitter is using BlueVia’s APIs rather than the highly specialized MM7 protocol that a rare few businesses can access.  BlueVia’s APIs have reached a point of simplicity and ease of use that an organization the size of Twitter (by messaging volume) preferred to use them, and critically this is an interface any developer can access.  This is clear endorsement by the web-centric world that BlueVia has got it right – a seminal moment for Telco APIs and our industry.