MONETIZING THE MOBILE APP. A Light Reading Webinar Sponsored by
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1 MONETIZING THE MOBILE APP A Light Reading Webinar Sponsored by
2 TODAY S PRESENTERS ANDY GRAY Moderator Heavy Reading CASSIDY SHIELD Head of Global Marketing Content, Cloud, Communications 2
3 AGENDA 1. Service Provider Dilemma/Opportunity 2. Applications Market and Perspective 3. Strategy Definition 4. Monetization your Strategy 3
4 AS IF SERVICE PROVIDERS DIDN T HAVE ENOUGH TO WORRY ABOUT New Ecosystems Cloud Services Video Everywhere New Business Models Mobile Broadband Acceleration How to Work With Over The Top Players 4
5 IT S TIME TO REGAIN CONTROL OF YOUR NETWORK 5
6 DATA TSUNAMI IS HERE AND GROWING MOBILE TRAFFIC (1H 2010) Other VoIP apps & IM 2% 3% P2P 15% Web browsing 29% HTTP download 16% Video streaming 35% Source: Allot Mobile Trends 6B Mobile Apps Downloaded in x M2M Connections in 5 yrs 30x Global Mobile Traffic in 5 yrs 400% 350% 300% 250% 200% 150% 100% 50% Global Mobile Data Growth (1H 2010) 200% SOCIAL NETWORKING AND VIDEO SHARING 310% 123% Source: ABI Research Source: Alcatel-Lucent 0% Facebook Twitter MySpace YouTube 6
7 THE CARRIER BUSINESS MODEL $500B MOBILE DATA REVENUES $260B 117x SMARTPHONE TABLET MOBILE APP REVENUES
8 HOW THINGS ARE DONE TODAY MONTHS Marketing requirements (wish list) Debate with Marketing Engineering Requirements (reality) Pick vendors several selected as engineering with SI and run project Project underway, customer integration and development Testing, debugging, new feature adds (scope creep/re-plan) Handover to Engineering UX Design by external party big thick document independent of technology selection Eventual Launch or cancellation 8
9 THE NEW WAY OF DOING THINGS SERVER SIDE WEB SERVICES REST SOAP JavaScript HTML CLIENT SIDE GET POST PUT DELETE Server Operating system ios Apple Android WEB Netflix DATA Customer Info Movie Reviews Movie Ratings MOBILE IPTV ipad 9
10 POLL QUESTION 1 WHAT IMPACT WILL THE GROWTH OF APPS HAVE ON YOUR NETWORK? Drive new services revenue Cause network congestion Strain business models Little or no impact 10
11 TO SUCCEED YOU MUST SCALE STRATEGIC PARTNERS APIs BUILDING A NEW ECO-SYSTEM FOR CUSTOMERS: INTERNAL, STRATEGIC PARTNERS, DEVELOPERS APPLICATION DEVELOPERS INTERNAL DEVELOPERS Telco owned distribution channel branded portfolio Internal developer Retail/closed approach Co-branding Trusted partners More collaboration Retail or Wholesale approach Blended portfolio Trial and Error Faster R&D 3rd parties distribution channels Community of developers Creative Innovation Mashups, Apps, Web 2.0 CLOSED TRUSTED OPEN 11
12 A SMART STRATEGY BEGINS WITH HEAD AND SHOULDERS NO NOT SHAMPOO 12
13 VALUE A NEW APPROACH TO DOING BUSINESS VOLUME 13
14 VALUE WHO IS YOUR AUDIENCE? HEAD Customers: B2B or B2C Employees Internal Business Units M2M Niche Markets VOLUME SHOULDER Existing Partners New distribution Partners Co-branding Opportunities Industry Vertical (Healthcare, Travel, Financial) M2M LONG TAIL Independent Developers Web, Gaming, Mobile and Widget developers Bloggers, Media Entities, Analysts M2M 14
15 VALUE WHAT IS YOUR INTENT? HEAD Core Network Exposure Improve customer access and Retention Focus on your core competency Make it easy for your developers Don t Overlook Internal ROI Competitive Differentiation Brand Reinforcement Time to Market VOLUME SHOULDER Platform Exposure Strategic Partners High touch collaboration Drive enterprise value Enterprise/IT specialists Support multiple pricing models Co-branding opportunities LONG TAIL Increase lead generation Higher level abstraction New distribution channels Low touch/self-service Drive API as a product Developer focus simplicity 15
16 WHAT IS YOUR STRATEGY FOR IDENTIFYING OPPORTUNITIES TO CREATE INNOVATIVE, BRANDED APPLICATIONS FOR YOUR CUSTOMERS? NEW DIRECT REVENUES HIGHER SERVICE TIER PREVENT REVENUE EROSION CUSTOMER RETENTION BUILD BRAND EQUITY 16
17 HOW TO MONETIZE THE HEAD 1 The classic bundle. Add unique value to data access. (customer pays either more, or not less) 2 Subscription. Add service above data plan. Tough to do on mass market basis; potential for niche services. (customer pays above base service offering) 3 Two-Sided Business Model. Co-branded offer from a go-to-market perspective. Typically a highly targeted marketing approach. (partner pays or no one directly pays as it s a win-win) Note: For this model, pay per use or transaction based payments typically don t work well with core services. 17
18 MONETIZING THE HEAD EXAMPLES TV, COMMS, COMMERCE 18
19 HOW DO YOU ENGAGE WITH ENTERPRISE AND STRATEGIC PARTNERS TO CREATE NEW VALUE FOR THEIR CUSTOMERS? SIMPLIFY INTEGRATION REDUCE DEVELOPMENT TIME INCREASE CUSTOMER ENGAGEMENT OFFER PERSONALIZED AND DIFFERENTIATED SERVICES ENTER NEW MARKETS 19
20 HOW TO MONETIZE THE SHOULDER Software as a service infrastructure. Reduce your development time and speed innovation. Reduce Partner implementation costs and improve new partner onboarding. Custom development is no longer offered. Onboarding of new partners is more efficient. New markets are reachable because APIs become standardized widgets (ie billing) to gain economies of scale. Multiple Business Models. Flat monthly fees, bandwidth and data storage, Tiered user volume. APIs create an opportunity for service providers to resell services to non subscribers at scale. Twitter, Facebook, Google; est $.0002/trx 20
21 MONETIZING THE SHOULDER EXAMPLES STRATEGIC PARTNER 21
22 HOW DO YOU ENGAGE DEVELOPERS TO CREATE NEW VALUE FOR THEIR CUSTOMERS? CUSTOMER ACQUISITION LARGER AUDIENCE REACH NEW DISTRIBUTION CHANNELS SCALE FASTER INNOVATE AT THE SPEED OF THE WEB 22
23 HOW TO MONETIZE THE TAIL 1 2 Simplicity. APIs are a product that need to be documented, packaged and promoted. Making it simple and straightforward for people to begin using your API is critical to achieving mass adoption. Documentation. Making it simple and straightforward for people to begin using your API is critical to achieving mass adoption. One great approach to API documentation is to allow partners to interact directly with your APIs without risk. 3 Usage based pricing models. Developers are entrepreneurs create a pricing model that is simple and only charge developers for usage so their costs can scale with their product. 23
24 MONETIZING THE TAIL EXAMPLE: TWILIO PROVISIONS LOCAL AND TOLL FREE PHONE NUMBERS IN REAL TIME. Phone number provisioning $1 per month $2 per month Toll Free phone number xxx xxx xxx3 Reporting Customer Banner Ads Websites Search Engine Advertising Remote Customer Care Agent 24
25 POLL QUESTION 2 WHAT STRATEGY ARE YOU GOING AFTER? Head Shoulder Long Tail A Combination 25
26 WAYS TO MEASURE SUCCESS BUSINESS IMPACT CONSUMER EXPERIENCE PROGRAM PARTICIPATION CUSTOMER RETENTION LATENCY PERCENTAGE OF ACTIVE PARTNERS REVENUE NEW PROJECTS ACTIVE PARTNERS AVAILABILITY TRANSACTION BY SUBSCRIBER TIME TO DISPLAY RESULTS BY API APIs IN USE BY APPLICATION NUMBER SERVICES USED BY PARTNER REDUCED COSTS ENGAGEMENT (WHERE AND WHEN) API CALL VOLUME GROWTH 26
27 APPLICATION ENABLEMENT A NEW FRAMEWORK FOR TRANSFORMATION FROM CLOSED TO OPEN BUSINESS RELATIONSHIPS Define strategic relationships that drive common KPIs, integrated teams, sharing risk & rewards across the organization and the partner ecosystem Risk Sharing Cloud Ecosystems FROM CORE NETWORK TO CLOUD and WEB 2.0 MODELS Leverage cloud an vertical layers to create opportunities for faster time to market; delivery new services faster, compete with OTT players FROM CLOSED ECOSYSTEM TO PARTICIPATION IN ECOSYSTEMS Transform the notion of owning every part of the ecosystem to leveraging third party partners to gain momentum and reach for consumer and enterprise ecosystems 27
28 WOULD LOVE TO LEARN MORE ABOUT YOUR THOUGHTS ON APPLICATION ENABLEMENT PROGRAMS, GOALS AND CHALLENGES Cassidy Shield, Head of Global Marketing Content, Cloud, Communications Scott Monson, VP Business Development Application 28
29 Q & A Session Please submit your questions!
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