CEBP and Two-sided markets

One of the truisms in the technology industry is that waves of technical innovations are followed by waves of business model evolution. The wave of Telco APIs, platforms, and communication applications clearly brought innovation to the industry. As I've stated previously, STL partners' theme of Two-sided business models represents the business model evolution.

An assumption I make is that Communications Enabled Business Processes is one if not THE most important tactic in helping Global Telcos to move toward Two-sided Business Models. Simply CEBP becomes a method for smart Telcos to not only maintain but extend their voice ( and sms) products rather than lose them to commoditization pressures. There are other important tactics available to Telcos including transactional processing but given that voice is the original cash cow it needs to be a priority.

The research on two-sided networks or markets shows this model can be very tricky to implement. To purchase background articles, go to Harvard Business Review

There are many complexities to putting the idea into practice but an HBS article by Eisenmann, Parker, and Van Alstyne identify three of the most important decisions.

1 .Get Pricing Right
a. subsidize quality and price sensitive users
b. secure marquee users or anchor tenants

2. Cope with Winner-Take All Competition
a. Will the market eventually be decided by one standard or platform?
b. Does this suggest a share or fight attitude with competitors?

3. Avoid Envelopment
Many platforms have overlapping user groups. Be aware of competition from outside your typical industry. Look for opportunities to extend.

Given the evolution of Jaduka and our parent company NetworkIP we are in an awfully strong position to enable two-sided networks. I can identify 2 possibly 3 other firms with strong positions too.

One of the arguments I have with STL's work is they do not adequately discuss the technical, regulatory, and cultural challenges a global telco will have to overcome in order to implement a successful two- sided business model. The academic research puts into context both the challenges and opportunities. In my opinion, the M&A or Strategic Partnership approach to implementing the two-sided network strategy will certainly gain traction.

There will be winners but not many.

Partnerships that push CEBP adoption

Jaduka is in the process of announcing three new partnerships during these summer months. We have created interesting and unique technology enabling partnerships with Strikeiron, Appian, and Dialogic.

Over the last 5 months, we have carved out a role as a technology enabling vendor of CEBP functionality. Although there are competitors in our space who have gained quicker market traction by building and selling voice applications the longer and bigger view is that practically ALL apps will have communications enabled features eventually. We know that over time voice and sms features will simply become a prime (but disguised) ingredient in other software and many business processes.

Our three partnership announcements help to pave this path.

The Strikeiron offering is the most direct method of appealing to Enterprise developers interested in buying web service solutions from one trusted vendor.

Our Appian partnership provides one of the leading pure play Business Process Management solutions a simple and scaleable method for extending the business process outside the walls of an organization. BPM becomes truly effective only when the mobile workforce, customers, and preferred vendors can be brought in as needed. The virtual or physical walls of the company's office need not act as a barrier to communicating a business process.

Finally, our long time vendor relationship with Dialogic is ready to be leveraged in a highly creative manner. By offering a mix of Dialogic's premise based and Jaduka's hosted offerings ( powered by Dialogic) to the Enterprise client we can push the CEBP space even further.

There are more partnership announcements in the pipeline.

Patrick Murphy
VP, Business Development
Jaduka

The CEBP ecosystems begin to mature

Within the past week or so, three interesting announcements show that the CEBP ecosystem is beginning to mature in fascinating ways.

1. Nuance purchased Jott. I find this announcement to be curious. I am a big fan of both companies. Jott has done a great job with their consumer and small business focused diary application that leverages a non Nuance based engine. Nuance is the dominant player in speech recognition technology. I haven't seen any serious analysis of why this is an intelligent move for Nuance or Jott. Competition from Google and Microsoft is one off the cuff answer. The VCs created an exit for themselves is another answer. I am interested in learning more about this deal.

2. Voxeo hires the Adhearsion guys
Since you can't technically purchase an open source project, hiring the founders is the next best thing. Again, all the principals in this deal are people I really respect. This could be a very smart move IF they don't get pulled into the trap of so many open source projects...the perception that everything is Free! Yes, I have reviewed Chris Anderson's latest book FREE.
However, getting pulled deeper into the per minute commoditization game will eventually destroy the valuation that Voxeo has tried to build up.

3. Jaduka announces relationship with Strikeiron.
This is the first of several announcements Jaduka will be making with Strikeiron. As I have mentioned previously many times, creating a developer strategy is just one phase in the 4 pronged strategy for a CEBP go to market effort.

From our perspective Strikeiron provides a dream channel for Jaduka's services to developers.
* StrikeIron is not only the largest provider of web services, but they have the largest number of Enterprises that uses these services
* StrikeIron is pre-integrated into NetBeans, allowing our services to be available to the millions (4 million downloads last year!) of Enterprise developers already working on SOA and WOA applications
* StrikeIron is pre-integrated into IBM’s Mashup Center, allowing IBM, its partners and customers to voice enable any application without costly and expensive integration efforts
* StrikeIron is pre-integrated into SalesForce, the largest SaaS provider in the world

Our little edge of the Telecom industry is starting to heat up.