'Telecom has changed and the industry is no longer a single homogenous business.'
July 1, 2011
Palo Alto, Calif. – The third annual Business Innovation Forum organized by Ericsson and held at the Stanford University Faculty Club focused on the seismic technology shift that is being driven by an ever-changing ICT platform.
As Douglas Gilstrap, chief strategist with the Swedish multinational and Hakan Eriksson, its chief technology officer, noted in an introductory message, telecom has changed and the industry is no longer a single homogenous business: “Today we are working with many other industries including IT as well as verticals and content producers. Eventually, all industries will be working with telecom as content will be delivered in ways we can’t imagine today.
“We are on the brink of the Networked Society, where everything that benefits from a connection will be connected.”
“Grab your seatbelts because it is going to be quite a ride,” said keynote speaker Paul Saffo, a noted technology forecaster and consulting professor in the School of Engineering at Stanford. “We are in a new economy and the new central actor is neither the producer nor the consumer. It’s a creator economy.”
The theme of the two-day session revolved around the deployment of new technologies geared towards mobility, broadband and cloud computing.
“Here we are with all of our smart phones and tablets and everything we want to reach is there in the cloud,” said Eriksson, who stressed the importance of the so-called smart pipe. “What else do we need? We need the connectivity in between. In 10 years, there will have to be 1,000 times more capacity for data.”
According to an Ericsson white paper, “in the new broadband-enabled, cloud-based world, the speed and quality of the user connection will be at least as important a differentiator as the desirability of devices, the ‘coolness’ of the apps and the cost of subscription. Users who are becoming accustomed to similar levels of performance from mobile and fixed broadband are sure to notice if mobile broadband coverage is unavailable or if data rates are sub-par.”
The business model for broadband, the company added, is shifting from flat-rate to more differentiated offerings to meet the needs of greater numbers of different users, devices and market segments.
The good news for connectivity providers, be it the structured cabling vendor, the switch manufacturer or the :telco, is that “connectivity becomes a priority. “Some industry commentators have virtually written off the ability of operators to create and deliver value in the new cloud ecosystem — seeing their role mainly as providers of dumb bit-pipes for other high-value players,” the white paper concluded. “The reality is that the ‘pipe’ that delivers services to people and client devices is more important than ever before.
“As tempting as it might be to characterize cloud-based ecosystems as smart devices connected to smart servers over dumb bit-pipes, differentiated mobile broadband services require pipes that are smart, however fat they might be. Only with smart pipes can operators create and deliver the value their customers need and build the profitability they need to replace flattening voice revenues.”
Lior Netzer, vice president of mobile network strategy at Akamai Technologies Inc., a cloud optimization services vendor and content distribution network (CDN) provider, said that the number of people connecting to the broadband Internet over mobile is soon going to exceed people connected via fixed connection.
“There is something very interesting about this because it doesn’t matter if you connect via a $1,000 device or $10 device. If you are connected to the cloud, you can harness that power. You suddenly become device agnostic.”
Earlier this year at Mobile World Congress 2011, Ericsson and Akamai announced an alliance designed to improve the overall user experience.
“The market is becoming increasingly mobile,” Ericsson president and CEO Hans Vestberg, said at the time. “As an example, advanced smart phone devices will grow 4-5 times to 2016 and the generated traffic will grow about 30 times, so end-to-end quality of experience becomes key.”
Much of that traffic is expected to revolve around machine-to-machine or M2M connectivity.
Among the early adopters is Sprint Nextel, which defines M2M as a means of connecting a “rapidly proliferating variety of electronic devices to enable increased operational efficiencies for business, as well as innovative new consumer and commercial services.“ For example, health care professionals use M2M to share medical images and monitor vital signs remotely, which gives their patients faster, more effective care. Trucking companies use (it) to track their fleets more efficiently, which helps ensure on-time deliveries for end customers. Utilities use M2M to manage utility grids, which can help residents consume energy more wisely and cost-effectively.”
Wayne Ward, vice president of emerging solutions at Sprint Nextel, said in a presentation that the “M2M world” is expanding fast. As an example, Juniper Research is estimating there will be 412 million embedded devices in operation by 2014, while ABI Research predicts by the following year, there will be 120 million in North America alone.
“These numbers are not pipedreams, they are very real,” he said. “This is not a well-known space. It is going to be, but right now the industry is very fragmented. You have different models, you have different chip sets, and there are all sorts of wireless and wired technologies.
“Broadband comes in three flavours: fixed wireline, portable wireless and mobility wireless. All three of those play in the machine-to-machine space, but what you get from wireless that you don’t get from wired services is simplicity, portability and mobility.”
Finally, on the first day of the Forum, Ericsson released the results of an initiative called the Networked Society City Index, which revealed that cites with a high level of ICT maturity are better able to manage issues such as environmental management, infrastructure and public security.
Erik Kruse of Ericsson’s Networked Society lab, who outlined results of the survey at Stanford, said the index can be used to “inspire dialog with decision makers to use ICV to enable organizational and societal success.”
The top 10-ranking cities in the index are Singapore, Stockholm, Seoul, London, Paris, New York, Tokyo, Los Angeles, Shanghai and Beijing.
“The three best-performing cities presented in the index – Singapore, Stockholm and Seoul – have successfully met many social, economic and environmental targets by making extensive investments in ICT,” Ericsson said in a release.
“Singapore, for example, is aggressively driving innovation in e-health, and is a pioneer in traffic-congestion management. Stockholm sees ICT as a major enabler for research collaboration and knowledge transfer, while Seoul is using ICT to realize green high-tech initiatives.”