The Telco API problem= 2 sided markets are winner take all

I noticed several unique posts this week that seemed to come together in my mind. First, Voxeo made yet another strategic partnership announcement with Motorola and their VXML broswer. Secondly, Google and Verizon announced a strategic partnership. Third, Amazon payments api went mobile. Finally, my friend, Tom Howe started posting again with some comments about what he calls the Telco API problem.

Here is my answer to the "Telco API" problem posed by Tom.
In my CEBP status report,I compared ( with Alan Quayle) the success of the CEBP application vendors to the api/platform vendors. Tom reiterates the report's findings in that it is clear the application vendors as a group have been much more successful. VoiceSage is just my latest example of a CEBP application company driving real revenue, fantastic product innovation, and seeing crazy growth.

It is also clear to me that the Telco API/Platform opportunity is a classic example of a 2 sided network or 2 sided market. According to Harvard Business School research, one of the defining characteristics of two-sided markets is they tend to quickly evolve into winner take all competitive environments.

Now, the world of Telco is huge. So, the winner take all competitive environment may ultimately mean there are 2 or 3 dominant market leaders globally in the Telco API/Platform space. Here is the problem. One of those spots has been nailed down already by Voxeo.

Another winner's position may have just been nailed down by Google Voice if they can leverage the Verizon/Google partnership just announced. While this may fail due to egos, when it gets down to execution, the Google Android Verizon announcement gets my early bet for the second platform/api winner. Google is a platform. Verizon is a platform. Combining the two of them makes THE global platform. Google Voice is just one of many CEBP style solutions to come. Click to connect advertising and real time lead generation is being tested now.

In terms of who might be the final api/platform winner I am keeping my eyes open for the first player who wakes up and proactively integrates with mobile payment players especially Amazon. Will Ribbit/BT get there first? Adobe Flash ( a Ribbit tool set) is certainly pushing towards mobile.

So, this is the beginning of a debate. I say the Telco API/Platform winners have basically been decided. My guess is Thomas Howe believes otherwise. We both agree there is plenty of opportunity left in the CEBP application space. I've kept some of my powder dry to respond to Tom's arguments.

CEBP use case for Government

I noticed this post from Voxeo. Awesome stuff.

This is a great write-up in the blog of the New York State Senate Office of the CIO, “Dialing in to the NYSenate OpenLeg API“, that outlines the great work that independent developer Mark Headd has done.
As the article notes, Mark has used the IMified platform to let people find out the status of legislation before the NY State Senate using:
▪ Instant Messaging Client (Jabber): opensenate@bot.im
▪ Twitter Client: Send a tweet formatted as a @reply to @opensenate
▪ Short Message Service (SMS): Send a text message to (315) 308-1943
▪ Regular Telephone: Call (646) 736-2439 (see note below)
Through whichever channel people want to use, they can now query the NY State Senate legislation database and find out the status of various bills. As the NY State Senate blog post author, Nathan Freitas, stated:
These services fit very well with the Office of the CIO’s vision for a fully mobile-accessible legislative body, where everyone from elected officials to their consituents can fluidly connect with eachother around issues that matter to them no matter where they are. Access of information via mobile phones also signficantly leverages the playing field when it comes to cost… a $99 iPhone is a pretty fantastic computing device.
Mark went into more details on his own blog in a post, “Leveraging the Government 2.0 Platform“, specifically noting that the exposure of an open API by the NY State Senate was the exciting part to him:
When governments make their data available in public formats, and expose APIs for querying such data, they are throwing the door open to outside developers to build useful things. That’s significant, and the NY Senate should get some major props for being among the first (if not the first) legislative body in the country to provide an API for their legislative information.
When governments make data available through an API, they are telling developers: “Use any platform or programming language you want to access our data.” The basic requirements for invoking an API like the NY Senate’s (or the District of Columbia’s 311 API) is the ability to communicate via HTTP and to parse XML, or JSON. Since pretty much every modern programming language and development platform can do these things, it creates opportunities for developers of all stripes.
But if APIs are platform and language agnostic, they are also modality agnostic – if the data exposed through an API is compact enough, there are lots of different ways to present this data to an end user.

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.