October 2007 | Volume 2 / Number 5
The IMS Ecosystem
By Marc LeClerc
Filling the pipeline
Giving users a much broader offering of content and applications will require a significantly expanded value chain with cross industry partnerships as well as a major increase in the number of parties involved in developing new content and service ideas. To achieve this, it will be essential to engage members of the media community as well as the application development community. This presents a dilemma, as the telecommunication community has limited channels within these communities, and they in turn have limited awareness of the commercial opportunities made possible by telecom-enabling their content and applications.
Luckily, multimedia content and services developers don't work in isolation. In fact, these days they rarely work alone, participating in a broad network of platform vendors, tool suppliers, open source communities, aggregators and hosted application services. This is called the ecosystem approach and, as with a biological ecosystem, it works best when all members fulfil their role in the chain by filling their specific niche efficiently.
How ecosystems work
In the world of electronic content and applications, instead of energy, food, oxygen, habitat and safety, the ecosystem provides markets, capital, technologies, suppliers and channels. As in biological ecosystems, the success of the entire chain is contributed to by each member in turn, and when the ecosystem is healthy all members share in that success. So how can the telecoms community use these principles to build a content and application ecosystem that can thrive in the world of networked multimedia?
Markets, like other ecosystems evolve over time, reacting to changes in business climate, technologies and consumer behaviour. New markets start simple and gain greater depth and complexity as new and existing players discover niches that provide them competitive advantage. These niches present new business opportunities to network operators, but can they be exploited while minimizing the business risks involved? As some of these opportunities involve unfamiliar industries, how can operators build the competencies they need in order to compete? And how will they get content and application providers to see telecoms as their channel of choice for bringing their offerings to market?
An ecosystem approach makes it possible to take a gradual approach in entering these markets and build a position of strength by means of progressive investment in that market and acquiring the network of partnerships needed. The first step is to identify a market or activity where network access can offer obvious value to end users and an incremental market or an obvious advantage to content and application providers. Let's take ring tones as an example for the music business. Ring tones and call back tones brought a completely new set of revenues to the music industry long before operators considered offering full track music downloads. The ring tone market provided users a new way to express their individuality and musical affiliations, and it also led to first contact between telecoms and music providers. Though it was sometimes a bit rough to work out the revenue split, it was an obvious win-win-win scenario for users and both industries.
Another market building strategy used in the ecosystem approach is for vendors (and sometimes network operators) to offer assistance to content and application developers in the form of software development kits (SDKs), market knowledge and market access. In particular, the SDKs provide highly abstracted application programming interfaces (APIs) that allow developers to quickly integrate network features into their applications. These are often accompanied by validation programs and promotional activities meant to build an initial awareness and demand for the applications - and thus network traffic.
No one can go it alone
At first the supply chain is very shallow with only a few parties involved. The next step in an ecosystem approach is to work on increasing the efficiency of the supply chain. Sometimes this takes place by introducing middle-men who engage in a very small part of the overall solution delivery chain, but who take advantage of economies of scale, finance or simply being faster or less expensive for their own small part. Here we can see aggregators, hosted service providers and brokers. These additional parties in the chain take a portion of the revenues, but free up time and capital for other members that can then be focused on core competencies and cost reduction so that even by sharing the margin the other members still make more.
It is also worth looking at companies that would sometimes be considered competitors to see if by working together in some areas there is a chance to significantly boost the overall market, i.e. making the pie bigger for everyone makes each competitor's slice bigger (even if their market shares remain the same). This is called the co-opetition market model, which came to prominence in the IT market, where larger scale compatibility and interoperability led to major advances in the usage of computers, the Internet and the World Wide Web. It has even led to the Open Source movement that created Linux and many of the tools and services used in developing applications and offering services over the Internet. A good example of this approach is Ericsson's contribution of IMS SIP container source code to the Glassfish Project, an open source application server activity originated by SUN Microsystems. Ericsson's motivation for this effort is to get more IT developers utilizing IMS based network features in their applications.
Give me the service I want, when, where and how I want them
Another factor favouring the ecosystem approach results from the increasing emphasis on network convergence. In a convergent scenario, users have the convenience to consistently access any of the content and services they want no matter which network is providing access and what terminal device is being used. In the triple play (cable, Internet, mobile) or quadruple play (cable, Internet, mobile and fixed voice via VoIP) scenario, the convergent network operator can gain economies of scale by using the same infrastructure to deliver services to all access types. Of course each access type also has its own advantage. With IP-based TV for example, the TV screen (with a broadband set-top-box) offers high-resolution image quality, the PC lets you more easily do searches and interact with media content. And with mobile TV, you can watch your programs whenever you have a few minutes, even if you're on the move. Getting all of this from one entity potentially simplifies the user's life by having a single bill to pay, avoiding the need to maintain several separate identities, getting the same services everywhere and making it much easier to keep all these services synchronized.
The hard part is that doing all of this requires common standards across network types, interoperability across vendors and operator boundaries, and inter-working with legacy systems from all these different access networks. This is a job that would be prohibitively expensive should a single company try to do it alone. However, by standardizing key network interfaces, such as was done across mobile, fixed line and cable industries by the adoption of IMS, the different parties involved in those separate ecosystems can combine efforts to build common offerings by partnering with each other.
Another major benefit is that it provides a broader market for content and application developers, reducing their business risk and thus hopefully attracting more developers. This will make it far more likely that operators with have available to them a critical mass of services with which to compete effectively in their chosen markets segments.