I find it fascinating that there are over half a million apps (and growing every month) that iPhone and Android users can download to their phones. The average user is downloading between 3-7 apps per month. A single game, Angry Birds, has driven millions and millions of downloads from users all over the world. App developers are raking in venture capital dollars by the truck load, and several larger app developers have either launched successful IPOs or are heading down that path.
So where does that leave telecom companies? Clearly wireless providers are beneficiaries and active supporters of the emerging app eco-system, but what about the wireline providers? Wireline service providers do benefit tangentially by virtue of their networks being used to access the apps stored in servers and data centers around the world. They also benefit in supporting the backhaul connectivity needs of the wireless providers. But I would argue that within the app value chain these are but small slices of a pie that seems to grow by leaps and bounds on a daily basis. So towards that end I have been wondering whether there is a more direct role that wireline providers can take in our increasing app-centered world.
When one considers the types of products that traditional telecom companies have produced since the beginnings of the telephone industry there are two large buckets – voice and data. Against the unceasing flood of apps for everything in our daily lives I do wonder whether voice and data telecom products can ever be app-tized.
Pondering this issue leads me to the conclusion that the telecom industry by default plays in the app space but doesn’t market products like VoIP as standalone apps – even though they really are. So are we in the industry truly embracing the notion of the app? I think we really need to in order to continue growing the wireline industry. The notion of just offering customers the proverbial “dumb pipe” does not sit well with me, and so I see the need for the industry to begin re-thinking its business model such that the development, deployment and marketing of apps as value added services becomes second nature. XO Communications is doing just that by offering customers a series of VoIP based applications, launching its Application Performance Management (APM), Hosted PBX and Hosted Security product lines, as well as announcing the availability of the Concentric Cloud Solutions (CCS) cloud based products. XO understands that the telecom business model is rapidly evolving and that the notion of apps being developed and sold by wireline telecom providers is something that is critical for its continued growth.
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Category : Industry Trends