NetworkIP’s Blog Has Moved

Given the high demand for our posts, we have decided to host our blog locally. As a result, our URL/domain name has changed. If you have NetworkIP listed as a “favorite” in your Internet browser or have us setup in your blog reader/RSS feed, please update to reflect or new address at http://blog.networkip.net.

Thanks for following,

Brian Kirk
VP Business Development
NetworkIP & Jaduka

Why All The Hype With Cloud Computing?

Believe it or not, I like Wiki’s definition of Cloud Computing the best. Wiki defines Cloud Computing as a general concept that incorporates Software as a Service (SaaS), Data as a Service (DaaS), Web 2.0 & other recent, well-known technology trends, in which the common theme is reliance on the Internet for satisfying the computing needs of the users.

The best example of Cloud Computing that comes to mind & the ones I use most often are Google’s Mail, Talk, & Doc Applications. Why do I use these applications instead of similar applications already installed on my PC? The answer is simple, these Cloud Computing tools allow me to access my e-mail, message with colleagues, & edit documents, spreadsheets, & presentations regardless of the PC I’m using & the city/state/country I am in. Simple said, they offer me a convenient solution to communicate & work that doesn’t involve me taking my PC everywhere that I go.

When Amazon officially released their Elastic Compute Cloud (EC2) earlier this year many companies (especially start-up companies that had yet to invest millions of dollars into their IT infrastructure) jumped on board. EC2 offered far more than a hosting solution. EC2 gave companies & software developers access to all the computing power they needed to run their applications at a cost far below what it would cost to procure & maintain the computing power on premise. To note, EC2 is just another piece of Amazon’s Web Services (AWS) offering.

Even with Google & Amazon’s play in the cloud, few were treating Cloud Computing as a mainstream approach to IT. Following Microsoft’s announcement of Azure, its long-anticipated Cloud Computing strategy, earlier this week at their Professional Development Conference I believe that Cloud Computing will become more mainstream. While many reports from Microsoft’s conference suggested that the news largely unfazed show attendees; I think this news will rattle the cages of Google, Amazon, & will awake the “regular” PC users who will think that it is cool that they can now work on their Word documents for work at home without having to take their work PC home.

Microsoft’s dominance in productivity software — Microsoft Word, PowerPoint, & Excel — remains strong, with market share based on revenue of at least 95%, according to data released in late 2007 by research firm International Data Corporation. Google Docs & Spreadsheets & even OpenOffice, which is an open source suite of tools that users can download for free, will continue to chip away at Microsoft’s market share, but the reality is that they still have a very long way to go before Microsoft will become scared. With Microsoft now making their Office suite more accessible, they are positioning themselves to maintain control of their existing user base that may otherwise eventually migrate to online tools because of their convenience factor.

Along with the online convenience factor I think this move to Cloud Computing also shows Microsoft’s realization that more users are beginning to user their mobile phone to write & edit documents, spreadsheets, & presentations. When doing such work from a mobile phone it makes more since for a user to manage their files in the cloud & use software that is also accessible to them in the cloud. Just this Monday, the Wall Street Journal wrote an article about how the mobile phone looks to be replacing the laptop. There is so much truth to this article & Cloud Computing is going to make this shift to mobile even easier for the consumer.

The hype about Cloud Computing is this. Businesses will turn to the Cloud mostly because the costs & resources to manage a large IT infrastructure far exceed the costs to make use of the Cloud. Software developers will turn to the Cloud because they can quickly obtain the environment needed to develop & deliver their applications. The “regular” PC users will turn to the Cloud for applications because of convenience & because the Cloud supports their applications for use on their mobile phone.

At NetworkIP & Jaduka we will continue to support the advancement of Cloud Computing by making both our telephony infrastructure & transaction processing engine available to the masses.

Brian Kirk
VP Business Development
NetworkIP & Jaduka

Mobile Contactless Payments Gain Momentum

Next week the 2008 CARTES & IDentification conference kicks off in Paris, France. CARTES is the world leading show for banking technologies & eTransactions & this year they are giving special attention to mobile & contactless payment solutions. This year’s event should be quite exciting for all involved given the high number of mobile & contactless payment solutions that have deployed in many countries & that went into prototype here in the United States.

We’ve been following the contactless payment industry for almost two years now & we continue to see an abundance of new contactless solutions develop. Combine contactless solutions to what has emerged in the mobile space these past 18-months with the introduction of smart phones such as Apple’s iPhone & I can assure you that contactless mobile solutions are closer in sight than many predicted.

Just last month, Juniper Research published a study titled, “Mobile Payment Markets: Contactless NFC 2008-2013”. Key points from this report include:

– By 2013, the global mobile subscribers with NFC phones will reach 700 million
– FeliCa-enabled phones riding on Japan’s NTT DoCoMo, KDDI, & SoftBank’s network dominate this market. Juniper estimates that roughly 50 million FeliCa NFC enabled phones have shipped to date.
– Juniper predicts that North America, Western Europe, & the Far East & China will be the dominate regions by 2013.

This Juniper study also reiterated some of my own concerns about the roadblocks that currently exist in this Near Field Communications (NFC) mobile market. The first & most obvious concern stated by Juniper was the lack of NFC phones on the market. The report also pointed to the lack of NFC readers installed at merchant locations as the second roadblock. An additional concern that I have is that consumers & merchants have yet to be properly educated on how NFC works. I dialogue with a number of smart & tech savvy people each day & I’ve realized that NFC is still an unknown technology. To my surprise, some of the people I dialogue with aren’t even familiar with the term NFC.

Hence the reason I am so delighted when I read reports that indicate that NFC trials here in the U.S. continue to show progress. One of the best examples & one that got a lot of attention was the NFC trial conducted with riders of the Bay Area Rapid Transit District (BART) in San Francisco. For four months (January 28 – May 30, 2008), BART riders were provided NFC equipped phones to pay for their transportation costs. These same NFC enabled phones allowed participants taking part in the trial to make payments at participating Jack in the Box restaurants & to download directions from NFC enabled posters inside BART terminals. Full results from the NFC trial with BART can be viewed in this Yahoo Finance article.

As more NFC trials are conducted here in the U.S., NFC will gain adoption by consumers. Retailers are already beginning to acknowledge the benefits associated with NFC payments & are favoring them over traditional Point of Sale (POS) swipe solutions.

I suspect as next week’s CARTES & IDentification show gets underway, we will see a growing number of devices & articles pointing to the market that exists for contactless mobile payment solutions.

Brian Kirk
VP Business Development
NetworkIP & Jaduka

Accelerating Business Value with SaaS

Today & tomorrow Pat Murphy, VP of Business Development at Jaduka, & I will attend IBM’s Accelerating Business Value Conference in Palisades, New York. The focus of this conference is to bring together business executives, subject matter experts, & Independent Software Vendors (ISVs) in an effort to collaborate on making alternative delivery models available for software solutions through IBM’s Blue Business Platform (BPP).

As reported by IBM, the tides of innovation are driving radical changes in the software market. Alternative delivery models are opening up choices for line of business executives & providing new market opportunity for software vendors. Analyst predictions include:

– By 2012, 70% or more of businesses with greater than 100 employees will have deployed at least one Software as a Service (SaaS) application. – Saugatuck Technology, May 2008
– The Cloud opportunity is potentially $95 billion, or roughly 12%, of the total worldwide software market, within five years – Merrill Lynch, May 2008

Just as Pat discussed in a recent blog post, NetworkIP & Jaduka have been doing Software as a Service (SaaS) for many years. In fact, we are doing SasS 20 million times a month & that number continues to increase. Enterprises are quickly realizing the many pros of SaaS which include: affordability, immediate ROI, subscription pricing, quick deployment times, & the elimination of hardware &/or IT maintenance costs.

Going forward we plan to work more closely with ecosystems such as IBM’s Blue Business Platform in an effort to enable more companies to easily leverage the power & cost-savings that Jaduka & NetworkIP’s voice & transaction services software offer.

Brian Kirk
VP Business Development
NetworkIP & Jaduka

Mobile Phones offer More Than Just Voice

Almost every day someone presents a new idea or use for mobile phones. The size of the mobile market has become so vast that it is increasingly more difficult to identify those mobile business ideas that will work & those that won’t. In the last 12 months the mobile space has opened up new business verticals that few would have ever imagined.

The mobile space is still relatively young. It was only 25 years ago (October 13, 1983) yesterday that Bob Barnett, President of Ameritech Mobile Communications (what is now AT&T Inc. & Verizon Wireless), made the nation’s first commercial cell phone connection from Chicago’s Soldier Field.

When Barnett made that first commercial cell phone connection he used a Motorola DynaTAC handset that weighed 2 1/2 pounds & retailed for $3,995 USD. Fast forward to 2008 when most mobile phones weigh less than 1/2 a pound, they retail for around $50 USD, & even the most basic mobile phones offer address books, calendars, games, text messaging, music players, & cameras.

Just three weeks ago I read an article in the Canadian Press describing how a new Japanese mobile phone built by Sharp Corp. will be used in place of a traditional car key. This new phone uses a technology developed by Nissan Motor Co. called “Intelligent Key”. As reported by the Canadian Press, “Cars equipped with the system sense when the correct key is nearby, automatically unlocking their car doors, and allow the engine to be started once the key is brought inside the car. Nissan said it has shipped about a million cars with the technology in Japan since 2002.” NTT DoCoMo Inc., Japan’s largest mobile operator, will provide the mobile network that this new service will run on.

It isn’t a surprise to me that a Japanese company is the first to introduce this type of technology. The mobile phones available in Japan are some of the most sophisticated in the world. Most of the mobile phones you will find in Japan come standard with digital TV, music players, Global Positioning Service (GPS), & cameras that double as barcode scanners & wireless credit cards.

The mobile phone is no longer a device for business men & women or the elite. The mobile phone has become a ubiquitous device for all income levels & demographics around the world.

Today, the mobile industry is nearly a $150-billion-a-year industry. As data speeds continue to increase & mCommerce solutions gain popularity the mobile industry will only continue to grow.

Brian Kirk
VP Business Development
NetworkIP & Jaduka

The U.S. is Texting, not Talking

Nielsen Mobile released a survey recently suggesting that American mobile phone users are actually texting more than they are talking. According to Nielsen, in Q2 2008 U.S. mobile subscribers sent & received on average 357 text messages per month (that’s 11+ text messages a day) versus making 204 phone calls a month.

What I find so remarkable about this surge in text usage in the U.S. is that the cost associated with texting only continues to increase. In fact, in the past two years the cost for sending & receiving text messages without a *special* text message plan has increased by 100%. Without one of these *special* text messaging plans, the consumer is paying $0.20 for each individual text message that is sent & received. The reason why texting is so popular in the Philippines (the text messaging capital of world) for example is because the cost of a text message is less than a penny & the mobile subscribers in the Philippines simply can’t afford to make phone calls. Europe provides another good example of a consumer base that heavily texts, but again, Europeans text in an effort to avoid high roaming charges between countries.

So with the costs of text messaging rising here in the States, why & where is the increased volume coming from? Not surprising to most parents – it’s coming from teens. Teens 13 to 17 years old on average sent & received about 1,742 text messages a month or 58 text messages a day! A surprising statistic to me was that kids under the age of 12 are also heavy text message users. These pre-teens send on average 428 text messages a month.

I forecast that even with the costs of text messaging rising, (which they are -see Verizon’s notice from last week about hiking their fees for mobile-terminated messages) that the popularity of text messaging will continue to increase here in the States. Not only will our teen population continue to send more text messages, but the enterprise world is continuing to adopt & deploy more mobile marketing campaigns with the help of SMS gateway providers such as Clickatell.

Brian Kirk
VP Business Development
NetworkIP & Jaduka

G1 Android Already Sold Out

Two weeks ago today (September 23, 2008) Google officially announced & showed off the new HTC G1, aka the “Google Phone.” The G1 will run Google’s much anticipated Android mobile operating system & T-Mobile will provide service on their GSM network.

In my opinion, the G1 will be this first real competitor of Apple’s iPhone. One week following Google’s announcement & before the first phone had even shipped, T-Mobile announced that they had sold out of the G1. The demand for the G1 has far exceeded both Google’s & T-Mobile’s expectations. In an effort to respond to consumer demand, T-Mobile decided last week to triple the number of G1 mobile devices available for sale through pre-orders until October 22nd.

The excitement surrounding the release of the G1 Android goes beyond the fact that T-Mobile has sold out of their initial inventory. This is excitement can be seen through the numerous developments & announcements surrounding Android to include: Visa developing a mobile payment solution on Android, T-Mobile removing their 1GB data cap, & Amazon preloading their MP3 digital music store on the G1.

The future potential of Google’s Android operating system is almost limitless. HTC is predicting up to 2 million Android phones will be sold by end of 2009. Google is also making waves with mobile carriers with their hopes to free the mobile device from the mobile carrier with a concept they call “Instant Bid.” Expectations remain high & I like many others believe that Google will deliver & expose the necessary technologies for others to develop the next generation of mobile solutions.

Brian Kirk
VP Business Development
NetworkIP & Jaduka

Telephony Platforms & Swimming

Developing a telecommunications platform that is reliable under load & that is easily scalable is not something you can learn by simply reading a book, a manual, or by sitting in a class room. It is certainly not as easy as many VoIP switch manufacturers would like you to believe either.

Developing a truly remarkable telephony platform is an art form, much like swimming. No matter how strong you are, if you are unwilling to invest the time & energy to practice your breathing, you body position in the water, your arm stroke, your kick – the basic mechanics of swimming, you will never be able to move fast & efficiently through the water. To swim quickly & efficiently, you must take the time to break down your stroke to the individual components & perfect each component independent of the rest & meticulously build your stroke back up, forming an efficient machine that moves quickly through the water. It takes time, patience, & skill. 

The same is true for developing a truly remarkable telecommunications platform. You need the right mix of hardware (servers, switches, power, etc.), quality data networks, quality telephony carriers, monitoring tools, software that scales & that is easily extendable, & a talented team of individuals that understand the various intricacies of managing such a complex solution. At NetworkIP we’ve created this remarkable telephony platform & through simple APIs offered through Jaduka we’ve made this platform available to your business.

Let us handle the platform so that you can focus on what you do best – develop your product & provide quality services to your customers.

Brian Kirk
VP Business Development
NetworkIP & Jaduka

Apple Shifts the Mobile Industry

I was reviewing my notes from last week’s Mobilize conference & I found myself asking where was Apple? This 1-day conference featured eight panel discussions with talent from the major mobile network providers, the mobile device manufactures, the mobile operating systems, & a variety of companies that specialized in mobile application development & marketing. The panel discussions consisted of topics ranging from the development of mobile applications with Location Based Services (LBS), to the hurdles associated with mobile carriers, to investment strategies in the mobile market space. Regardless of panel topic, I noted a recurring theme throughout. Not one panel discussion could avoid bringing up Apple & what they had done with the iPhone. It felt at times like the entire conference consisted of people asking how do we keep up with Apple, or is Apple’s approach the right approach to take, or what will Apple do next?

I scanned the list of conference attendees that was handed out at the beginning of the conference & there wasn’t a single person in attendance from Apple; nor was anyone from Apple participating in any of the panel discussions or keynote presentations given that day.

So here I sat in a room full of very talented people from some very reputable & large companies who could not help but analyze Apple & what Apple has done to the mobile market.

I find myself asking why Apple would have been there. Apple has set the standard. They’ve raised the bar with mobile devices & mobile application development & distribution. As a result, we find ourselves trying to catch up to Apple. While we sit here discussing how Apple approached the mobile market, they continue to innovate. I’m sure from time to time that they find themselves at conferences looking for answers to questions & to get a feel for a market. Of course they appear to do their own research in many other ways. Apple doesn’t wait for an industry to shift, they shift an industry.

Can other mobile device manufactures & mobile operating systems surpass Apple? Is today’s release of Google’s Android operating system on HTC’s G1 an example of this or will Apple continue to shape the mobile industry?

Brian Kirk
VP Business Development
NetworkIP & Jaduka

The Economics of Mobile Application Development

At last Thursday’s Mobilize conference the discussion started off with a round table focusing on “The Economics of (Mobile Application) Development.” At the end of this panel discussion which included talent from BlackBerry, the LiMo Foundation, Qualcomm, Adobe, & Windows Mobile the group concluded the following:

“That mobile applications will run primarily over the web versus being installed native to the device, applications will be available in a centralized area (like Apple’s App Store) versus a distributed model of distribution, most applications will be downloaded versus bundled with the device, mobile applications will be developed through businesses rather than through a consortium, & finally that applications will continue to be geared towards the consumer versus businesses.”

These predictions point to a couple of hurdles that in my opinion will continue to plague the mobile industry for many years to come.

The first hurdle is that there are far too many mobile operating systems & too few standards in this space. When a company or an application developer decides to develop a mobile application they are forced in most cases to pick a single operating system to use to develop their application because trying to keep up with the support & life-cycle of that application on 5+ mobile operating systems requires resources that many businesses & application developers simply don’t have to invest. As a result, businesses & application developers loose entire audiences because their application won’t be supported on a large majority of mobile devices running other mobile operating systems. Even with 5+ mobile operating systems; why can’t each mobile operating system adhere to some set of standards that would allow applications to seamlessly work across operating systems?

It is evident that device manufactures realize the control they’ll have when choosing a particular operating systems to run on their device. That is why there is such a race to gain market share now before the mobile market becomes even more saturated with additional mobile operating systems (note that Android from Google is being released this week). If these companies can’t work together on a set of standards for businesses & application developers to adhere to my hope is that we’ll see some device manufactures & mobile operating systems simply go away.

Secondly, mobile carriers still control too much of the equation. The mobile carriers have control of which devices they’ll allow on their network. They determine how the mobile applications will be distributed to the consumer; installed on the device prior to sale or forcing the consumer to download. The mobile carriers also control the costs associated with the network time (voice or data) that the application will require to use. All of these control factors make it very difficult for businesses & application developers to develop an application that is simple & affordable for the consumer to use.

While the mobile market is obviously exploding & “open” for growth, don’t be fooled to believe that there aren’t some significant hurdles for us to overcome in order to deliver a valuable solution to enterprises & consumers.

What is your opinion on these questions pertaining to the mobile market?

Applications will run: Native or Web?
Applications will be distributed: Centralized or Distributed?
Applications will be installed: Downloaded or Bundled?
Applications will be developed by: Businesses or Consortium?
Applications will be geared towards: Consumers or Businesses?

Brian Kirk
VP Business Development
NetworkIP & Jaduka