Opening Up for Apps

By Ty Wang, Oracle

Sometimes I wonder how we lived before the “app” craze. I mean, what did I do without a hanging level, parked car finder, and that addicting caveman racecar game right at my fingertips? But in all seriousness, Apple, the unspoken “apps” leader has taught us all that there can truly be an “app for that,” whatever “that” might be, and developers are pushing out new, innovative and useful applications by the minute. And, more importantly, consumer demand — and subsequently, revenue — is quickly following suit.

This year the app store craze has taken off with leading handset and smart phone manufacturers bypassing mobile operators and joining Apple in the device-centric app store market. For example, RIM offers the BlackBerry App World, Nokia offers Ovi, Google has the Android Marketplace, and Samsung offers Samsung Mobile Applications. This business model puts the device manufacturer in the leading role in defining the applications delivered to the handset.

So what about all of the traditional mobile service providers? The good news is there is still a great deal of opportunity for traditional providers to capitalize on the app craze ... and mobile operators have several competitive advantages, namely their existing revenue relationships and their network assets.

Mobile operators have a broad base of established revenue relationships with subscribers, which developers are hungry for. Subsequently, they have rich subscriber data that can help developers (and similarly advertisers) target services to the most likely users. And they have their existing network assets, which enable their developer partners to offer “exposure-enabled” applications, or leverage the operator’s key value-added network capabilities — such as the ability to embed SMS, location, or presence capabilities into their applications.

Forward thinking service providers recognize these differentiators and are leveraging them to jump on the app store train. Many are using service delivery platforms (SDPs) to develop, deploy, and host end user services and monetize their networks to grow revenue from both third-party content developers and end users. This two-sided business model has helped service providers increase revenue and take advantage of the market that is opening up as smart phone adoption rises sharply and users look for more unique applications.

The problem is that, in the past, service provider environments have hindered the process with long onboard times for getting new developers set up and then launching services, which can take as much as 12 weeks, compared to the mere minutes it takes the competition. To stay in the game, carriers need to implement adequate platforms and quickly onboard developers so they are able to follow through to revenue realization.

When it comes to apps, mobile service providers’ main focus areas should be providing an easy-to-use platform for developers and getting the customers engaged. With a service exposure-enabled SDP, developers can quickly create applications and then interact directly with customers, providing a unique opportunity to test out an application and gauge its success before making a pricey investment. Ultimately, this provides a win-win situation; developers are getting first-hand insight as to what the customer wants, and the customer is able to personalize his/her service as a result.

For example, O2 UK, a leading communications service provider in the United Kingdom, chose the SDP route in an effort to create an innovative, open, and profitable ecosystem for communications services. O2’s Litmus platform has been successful in attracting an active application developer and subscriber participant community growing in the thousands every month since its inception. O2 Litmus has created an extensive portfolio by focusing on its commitment to delivering an easy-to-use platform for third party developers that offers fast onboarding times and accelerated time to market, no testing fees, 70 percent revenue share and retention of intellectual property.

There is no denying that the app store competition is fierce. But there is also no denying that mobile operators need to open up and let the developers in to succeed in today’s converged communications industry.

Now back to the caveman racecar game...

Ty Wang is senior director of product marketing for service delivery solutions at Oracle Communications. He is responsible for identifying new product capabilities and market opportunities for communications service providers and related independent solution providers and oversees areas of Oracle expansion including voice over IP (VoIP), presence, messaging and Web 2.0 technologies for initiatives ranging from social networks to mobile work forces.