Mobile Breakfast Series entered its 5th year of operation this week with our first event of the year in Seattle. The topic of discussion was Cloud, SDN, and the art of mobile computing.

2012 has been an incredible year for mobile. Despite the global economic doldrums, mobile is a $1.5 trillion economy with new entrants, new disruptions, new devices, technologies, networks, etc. One of the major shifts is in how the revenue is generated for the industry. Mobile operators around the world capture over 85% of the industry’s profits. However, if you take a look at the top 5 global players by profits – it is China Mobile, Apple, Verizon, AT&T and DoCoMo. Still dominated by service providers but Apple wasn’t on the list 2 years back. So, how will the list look like 5 years from now?

There is a clear shift going on what I call “the fourth wave” i.e. industry’s new revenues are going to come from services and solutions. And mobile operators are not silent participants on this wave. Players like Verizon, AT&T, Telefonica, and DoCoMo are going toe-to-toe with the OTT or Internet players. If you remember the early 2000s, mobile data wasn’t even registering on the revenue scale; 10 years ago mobile data revenues were less than $1 billion per year in the US. Last year, we reported $79 billion, this year it will grow to $90 billion. In fact, we might see a shift where data revenues > voice revenues this year in the US. It has already happened in Japan, over 65% revenue coming from data. But what happens when data saturates, the revenue is going to come from fourth wave services and solutions. You will start to see operators break out revenues from digital services.

So, the question is what those services are – cloud is on top of the list, big data and analytics is on the top of that list? How are these going to be supported – by LTE network, buy SDN enabled network infrastructure? To discuss all of this we assembled a great panel.

Mitch Lewis, Vice President, Juniper Networks

Biju Nair,  EVP and Chief Corporate Strategy Officer of Synchronoss

Randy Wagner, Executive Director, B2B Sales and Marketing, Verizon Wireless

Louis Brun, Senior Vice President, Marketing and Product Strategy, Guavus

Chetan Sharma, President, Chetan Sharma Consulting (moderator)

Before we began, Mitch Lewis gave a talk on “Seven Leadership Principles From Everest” .. yes, you read it right, Everest. Mitch has not only climbed Everest but each of the 7 highest peaks on the 7 continents. If that were not enough, he has run 7 marathons on these continents as well. It was indeed a thrill and a privilege to host my friend Mitch and have him talk about his experiences and the lessons from a dream that he accomplished over the course of 8 years. Just a phenomenal achievement.

Below is his presentation and a video from his talk. Enjoy and get motivated.

 

We could have just stopped there 🙂

But we had plenty to discuss on the state of mobile cloud computing and the emergence of SDN.

Below is the summary of the discussion:

Cloud Computing

• One can’t think about M2M w/o thinking cloud. The billions of sensors that will come onboard over the next few years will be talking to the cloud in some shape or fashion.
• While there is a lot of focus on enterprise cloud, Synchronoss has been focused on the personal cloud and how personal information from the device is backed-up, shared, and run analytics on to create new services and revenue opportunities.
• (Infinite) Mobile storage is really not free. One way or another consumer is going to pay and the provider is going to get the money either directly or indirectly.
• Health vertical is seeing great traction. Others like retail and transportation are also seeing good action.
• Some of the emerging markets and emerging operators like Bharti see 4th wave as an opportunity to leapfrog some of the traditional thinking and while access is important to them, they want to focus on digital revenues more aggressively than even some of their western counterparts.
• Hybrid clouds are going to be most prevalent.
• Security is hugely important for cloud, for both SMBs and large enterprises and while there are going to be vulnerabilities, it is going to be no different than how things are on the Internet and customers are getting more educated about security issues and best practices.
• While we have made significant progress with cloud solutions, video and associated bandwidth issues remain a problem and there is no specific solution in sight thought LTE-Broadcast seems to be on horizon.
• Cloud interoperability requirements will become much more important and companies are already working on abstracting the complexity of different competing clouds from the application.
• Consumers might not like their service providers but they trust them and hence the opportunity to provide cloud related solutions to them.
• The mobile network traffic for Dropbox is 25 times that of iCloud and 20 times that of Evernote.

SDN

• Juniper acquired Contrail Systems, Cisco acquired Cariden, VMware acquired Nicira – accelerating the interest in SDN and what it means to the infrastructure business.
• It is uncertain how SDN is going to impact the financials of the mobile operators and the infrastructure providers. Does the revenue stream just move up to software?
• SDN clearly provides flexibility and more manageability to the network and we can expect some deployments by the end of the year. There are a number of trials underway.

Privacy and Security

• Everything and everyone can be tracked even with the phone off. Keep that in mind next time 🙂
• Given that all this data is being sent to the cloud, one can expect that the security requirements to become even more strict.
• Security, scalability, and global IP backbone is how Verizon is differentiating with the likes of Amazon. Verizon has over 200 data centers around the globe.
• There is big internal debate at the operators as well as discussions with the regulators as to how big data should be used and monetized. How much privacy is enough? How do you make your partners also accountable for the data use? What information to sell and when? 2013 might provide some answers.
• Policy plays a significant role in managing privacy and security both in the network and at the device level.
• Identity is emerging as a service offering. We might get rid of the phone number and just use IP address (dynamic or static) for devices that are tied to the user. Dynamic SIM allocation based on usage could be introduced as well.
• For verticals such as Healthcare where HIPAA compliance is necessary, operators typically have private tunnels for added security.

Big Data

• Big Data has been around for a long time but we are starting to harness useful signals from the noise in real-time to make effective use of the intelligence in data.
• Mobile operators are using the data and exposing it for their own use as well as to the developers with APIs such as customer profile. Same data is also being used for churn management, network performance, etc.
• In Europe, big data is being used to offer insurance on mobile devices by effectively targeting consumers.
• TV stations are also using big data to target consumers when they engage with their content on mobile.

As usual, it was a lively discussion and with the added presentation from Mitch, a memorable one indeed. Mobile cloud has become a layer of computing just like security or connectivity. This fundamental capability has led to a thousand new companies looking to move the art of computing a bit forward. Software Defined Networking is slated to disrupt the infrastructure in a big way, provide more flexibility to service providers and developers to create even more compelling services and user experiences.

We also announced the date of our 2013 Mobile Future Forward. On Sept 10th this year, leaders of the mobile industry will gather in Seattle to brainstorm the future of mobile. As usual, it is going to be a delight to host the best and brightest. So mark your calendars, make your plans, and we hope to see you there later this year. More news to come in the coming weeks.

Thanks to all those who attended and thanks to Synchronoss for being our series partner.

Chetan