Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
In meteorology, clouds on the horizon may portend stormy weather. But in the wireless world, clouds could signal sunnier times ahead.
Mobile cloud services that use smart networks to enhance wireless users’ experiences promise to make customers happier. For telecom operators, cloud services can ease capacity burdens and give them a chance to reassert their primacy in the communications ecosystem.
The success of smart phones in luring customers to download applications from app stores proves the benefits of providing more applications through the network via the cloud, rather than storing everything on the handset.
This shift may be especially useful in markets where prepaid service dominates and subsidized smart phones are relatively rare. Users who cannot afford iPhones or Android devices can access network applications very much like those operating on smart phones – using existing phones. In fact, it’s easier and faster to roll out cloud computing services because they don’t require new hardware.
The logic is difficult to resist. Indeed, in remarks at the GSMA Mobile Asia Congress late last year, Peter Chou, chief executive of HTC Corp., the world’s No. 4 smart phone maker, endorsed clouds. “Cloud computing will play a critical role in the smartphone experience,” Chou was quoted by GSMA Mobile Business Briefing. “As the mobile becomes more powerful, we can’t store everything on the device; we need the cloud.”
For wireless carriers, clouds mean the sky is the limit
With consumers shifting to smart phones, migrating services to the cloud creates an opportunity for service providers. Exactly, how to capitalize on this opportunity is still to be determined. However, first service providers need to have the ability to intelligently classify, prioritize and steer traffic intended for mobile cloud services. Technological advances in application-aware dynamic quality of service using DPI and flow-based routing are necessary building blocks for smart mobile cloud services. But even with ripe technology, can operators participate in the economic value chain promised by the mobile cloud? The answer is yes.
Network operators can establish their own applications stores that offer application providers fewer delays in getting their wares to market.
Besides setting their own application stores, network operators can move on to offer “content stores.” The stores, easily accessed by customers, can offer premium content from a variety of sources and through a variety of schemes.
Some customers may prefer to subscribe to a service while others buy individual movies or programs on an “a la carte” basis. Operators might also offer advertising-supported free programming. Since some customers want to get video over their wireless tablets, others may prefer smart phones and still others use PCs, an intelligent network can recognize the device type and optimize the content for best experience. Operators can serve as the “content store front” that unifies today’s fragmented content services and catalogues and enhances a customers’ quality of experience.
Many mobile customers are already delivering mobile commerce on a small scale and this trend is rapidly growing. Mobile operators can invigorate this shift from online to mobile commerce by reducing the hurdles to mobile transactions. They can catalyze mobile transactions by playing a key role in improving three areas: trust and security about payments; awareness and availability of forms of mobile payment; and reduced transaction cost. Next-generation payment platforms enabling customers to make purchases and payments without divulging credit card information help remove a key hurdle in mobile transactions. With a push of a button, or a finger tap, customers can make mobile commerce transactions secure. Customer can use the same accounts to access the wireless Internet and make purchases or transfer funds. Prepaid customers can preload their accounts with the operator. Online merchants can multiply their transaction volume by extending their stores literally to the customers’ finger tips.
Recently, many mobile operators adopted stricter policies towards traffic control with tiered pricing. While this model pricing enables operators to monetize the explosion in bandwidth demand by taxing the consumers who use the most bandwidth, it could also have an adverse side effect of diminishing demand over time. It creates a loose-loose environment for providers of bandwidth-intensive services, such as Netflix Inc., consumers who opted out for lower-tiered data plans, and operators who face unsatisfied customers experiencing a bill shock when they exceed their bandwidth limits. This situation can be avoided by embracing mobile cloud services.
Mobile cloud services delivered by a smart network can provide a win/win experience
Cloud computing applied to consumer services certainly offers wireless carriers an array of opportunities to reassert their central role in the communications ecosystem. But as applied to the enterprise, the prospects are perhaps even sunnier.
In today’s dumb pipe environment, carriers generally have a commodity-based relationship with the enterprise: how many handsets will they subsidize and what rates will they charge for how many minutes of voice and kilobytes of data?
A smart network offering cloud services can change this equation. As enterprise applications move into the wireless cloud to serve mobile employees, the standard “best effort” level of service common to the public Internet won’t be good enough.
Company representatives, accustomed to desktop versions of applications like Salesforce, must have assurances these will work just as well when they take them on the road. Providing service level assurances and virtual private networks to mobile customers will become an attractive method to break away from commoditized bandwidth.
This offering will be attractive whether the carrier is selling cloud computing directly to an enterprise or if it deals with an IBM Corp., Google Inc. or other third party that offers cloud services.
Two trends are worth noting. One is that enterprises are moving away from maintaining a traditional information technology apparatus in-house to embrace more cloud computing because it reduces costs. Economies of scale are very attractive here.
The other trend is the ubiquitous availability of smart mobile devices to a mobile work force. There’s no doubt that workers are becoming more mobile, just as consumers are. After all, workers and consumers are just different names for the same people.
Smart mobile devices represent a huge opportunity for mobile operators.
One last aspect of the rise of mobile cloud services that deserves a deeper look in another article is the paramount need for more and better security.
Smart phones are really just sophisticated computers shrunk to a size you can put in your pocket. Just as we have seen in the wired world of personal computers, hackers are targeting smart phones. Much as spyware and other forms of malware plague the Internet, we expect that criminals and malicious hobbyists will seek vulnerabilities in the open systems using wireless broadband networks.
Because mobile devices lack the capacity to carry extensive defenses against hacking, it is up to operators to maintain networks that detect and scuttle viruses before they infect mobile devices.
Challenges to networks are formidable, but so are the opportunities.
Pankaj Shroff is director of technology strategy at Tellabs where he is responsible for identifying and building strategy for entering key growth markets for Tellabs in the areas of mobile packet co
re, mobile content, new-media video delivery, advertisin
g and analytics. Prior to joining Tellabs, Shroff was chief applications architect and director of solutions marketing at Sonus Networks, where he was lead evangelist and architect for the applications line of business. Shroff holds an executive education certificate from MIT Sloan School of Business, a Master of Science degree in computer science from Utah State University, and a Bachelor of Engineering degree in computer engineering from University of Pune.
