Stardust Global Ventures

Location based services (LBS) are all the rage today. From Foursquare to Gowalla to Yelp and more, the ability to check in, network and share tips via smartphones has captivated the attention of early adopters worldwide.

For those of us who live each day by our smartphones, that’s great, but we’re still in the minority.  There are far more standard mobile phones worldwide that smartphones. And while momentum is increasing, standard cell phones will continue to dominate the global market in many parts of the world.

Even with smartphones, there’s another aspect to location that technology can improve and automate – indoor positioning. A few months back Kevin Tofel wrote on GigaOm about a company that’s been working on patent pending location both indoors and underground to from 1-40 meters. As good as or better than GPS…for any cell phone – even those not equipped with GPS.

That’s right, with solid triangulation algorithms Aunt Suzy’s old flip phone can be located accurately too.

Here’s some info from a current press release:

GloPos, the developer of a breakthrough software-only positioning technology that makes all mobile phones location aware — outdoors, indoors, and even underground – has confirmed an indoor positioning accuracy of 7.7 to 12.5 meters in an independent test of its software conducted by VTT, The Technical Research Center of Finland.

Testing of the outdoor, indoor and underground accuracy of GloPos software was conducted by VTT at the Helsinki City Center on May 20, 2010. The GloPos application ran on a standard GSM-only mobile phone.

The stationary indoor and underground tests show that GloPos is capable of non-filtered average positioning accuracy of 15.1-23.9 meters. 75% of the measurements present an average position accuracy of 7.7-12.5 meters. With filtering, the indoor accuracy of GloPos technology is as good as the outdoor accuracy in an urban environment with a normal GPS embedded in mobile phones. When comparing with state-of-the-art cell positioning (Google Maps) the average accuracy is at least two times better and in some cases even ten times better (indoors).

“This successful test lays the groundwork for making all mobile phones location aware and opens up exciting, new opportunities in the personal navigation, social location, mobile search and personalized mobile advertising marketplaces,” said Mikael Vainio, CEO.

For those who remember Jaiku at its peak, location based on tower triangulation was becoming very important. It allowed a user created database of locations that Jaiku users with Nokia phones and the client software could then tag locations for future use.

That’s right, the model behind Foursquare and Gowalla was in live use with Jaiku long ago. The GloPos value really stems from honing accuracy for handsets that aren’t GPS-enabled. Remember those handsets are still SMS enabled. SMS is hugely popular and widely used.

We don’t talk about text a lot these days, but in 2008, in the US we sent 95.4 billion text messages. And we aren’t big text users. Many countries make optimum use of the lowest common denominator handset.

The truth is the Internet and value we get from it is really strongest when we support the the most basic end device – a standard cell phone.

GloPos potentially enables more granular location tagging that we see today in LBS. We can identify location not just to the store inside the mall, but which floor of the store someone is in.

GloPos makes location more important that ever in the mobile marketplace. it’s more ubiquitous than the other technologies we use today.

GloPos technology requires only a cellular network to make all mobile phones location aware. No additional hardware like GPS or W-LAN is required on a mobile device for achieving accurate positioning.

GloPos’ patent-pending, self learning algorithms can calculate an accurate position fix even in places where no W-LAN access points are available or no GPS can be used (i.e. in shopping malls, subways, underground parking, airports, sports arenas, exhibition centers). GloPos works wherever cellular network coverage is available.

GloPos Technology does not consume any extra battery life while operating as cell information is already being used to stay connected. GloPos enables longer device usage versus GPS and W-LAN, allowing battery power to be used for more advanced applications and driving more powerful processors.

We’re really just beginning to uncover the power and the value of location. Companies like GloPos are going to keep emerging as they bring new strengths to what we can do with technology we carry in our hands already.

My blogging here has been much lighter than in the past. It isn’t because I’ve lost interest in VoIP, unified communications or mobility. Theyve simply become smaller facets of what I’ve been working on and thinking about. I’ve become deeply entrenched in the realities and vision of real next generation networks in the large enterprise space.

With deference and utmost respect for many friends and colleagues in the entrepreneurial space, much of the innovation we see today really targets the SMB (small-medium business) space rather than large enterprise. This is true for a number of reasons. SMB and enterprise business share a number of issues that differ only in scale. Enterprise business has unique requirements beyond scale. These might relate to requirements from regulatory agencies, business sectors, shareholders, Wall Street and global business realities. They are  very different animals, and this fact is often overlooked but high tech innovators. (See my recent post Skype in the Enterprise? Not without major changes for one example.)

For example, small businesses are looking at Google Voice, Skype and other VoIP services for their use. Large enterprise tends to look at carrier class services differently. Most enterprises source telecom and network services selectively from a small set of providers. Some will select more, some fewer. This is to reduce risk and force price competition among the providers. Other companies focus intently on the “one throat to choke” approach, insisting on a single provider

Enterprise 2.0 (E20) is a very popular buzz phrase today. I see the current state of E20 and what we call cloud computing as being very transitional to a more interesting destination from the large enterprise perspective. Let’s touch on where we’re at and where we’re headed beyond E20.

Today the enterprise looks for things like:

• Cost models that are flexible, break out all the different service elements and deliver consolidated billing.
• Shifting from per seat and per port costs to more demand or usage oriented billing.
• Tiered SLAs are becoming increasingly important.
• Network based, or hosted in the cloud based services are on the rise, particularly in the realms of VoIP, unified communications and collaboration (UCC) and call centers. Hosted in the cloud doesn’t necessarily mean by a service provider. Enterprise businesses are leading with private cloud hosting delivered by the enterprise today. It’s a bit movement.

Cloud based service really fall into three distinct categories today.

• Public cloud owned by the carrier with access via the Internet
• Community cloud hosted or managed by the carrier, shared by a consortium of organizations. This is typically accessed via the Internet or via VPN.
• Private cloud hosted by either a carrier or the enterprise itself.

Enterprise business really wants a hybrid of many clouds for load balancing, traffic bursting that mix these three models.

Software as a Service (SaaS) is a leading driver of cloud initiatives today. Whether is moving sales force automation (SFA), enterprise resource planning (ERP) or customer relationship management (CRM) to the cloud, there’s really one fundamental technology that enables this – virtualization. Server virtualization is big business. What we have today is maturation of virtualization technologies. The industry spins it as cloud computing but this is really only the first steps to a fully enabled cloud.

Communications as a Service (CaaS) is a growing trend. Leveraging VoIP, video and collaboration services (UCC), CaaS brings in call centers, conferencing, messaging and fixed mobile convergence. CaaS is an infant in the enterprise today. The best in breed solutions are built, run and maintained by the enterprise, for the enterprise. These are not solution any carrier can deliver as cloud based services today.

The next generation is something the carriers should be frightened of. It changes their business completely. I’ve long argued that Telco 2.0 was something of an oxymoron. Here’s one reason I believe this.

Infrastructure as a Service (IaaS) is a pretty new concept to be spoken aloud. It’s something enterprise architects have talked about for years behind closed doors. Now it’s something these architects are pushing toward providers. In a short time, it will become the de facto operating model telcos and other providers will have to operate under to win business. This will be a critical extinction event for many providers.

In the future that I’m loathe to call Enterprise 3.0, IaaS will be delivered by the real next generation carrier-class provider. It will bring some major differentiators that create an obvious gap from todays model.

• Carriers will provide more options on how services are billed and paid for. The idea of a fixed cost circuit will die, replaced with unbilled capacity (bandwidth) billed against usage, with some minimal billing requirement.
  • Enterprise organizations will routinely deploy 5-10 Gigabit capacity connections to support high demand as streaming apps grow more widespread. They can’t do that today because the billing for these circuits 24X7 simply precludes it as an option.
• Carrier neutrality will be a reality. This means carriers will have to interoperate, provide on-demand capabilities, and deliver on their SLAs like never before.
  • This environment will give the enterprise access circuits for the last mile, with flexible, on demand switching at the provider edge. If the carrier in use suffers a major outage, switching to an alternate carrier will be simple and seamless, even transparent.
  • This neutrality will make carrier services much like power brokerage in the energy sector today. Large businesses may even shift traffic day-to-day based on available pricing from carriers. Transport will truly become a utility.
• More enterprises will tackle co-management and self provisioning of the enterprise network and cloud. That’s right. More DIY in the enterprise because only the large enterprise truly understands and can meet their service delivery requirements.

These are some of the thing I’m working on lately. They are coming. In some cases they’re here in pilots, prototypes and trials. If you think the tech sector has been interesting so far, hang on for an exciting ride ahead in the enterprise space.

The last few days I’ve seen several posts talking abut how Skype is now going to run rampant through the enterprise world. While some posts were from people I know and respect, those folks are simply off the mark.

I know we love Skype. I love Skype. For personal use. But as an enterprise architect with thirty years experience (in the large enterprise), it’s not going in my network. And ongoing discussions with my colleagues in network and security fields confirm Skype isn’t showing up in their networks either. The common response remains “not on my watch.”

The popular opinion that Skype will take over the enterprise is widely held, but I’d call it an urban myth. Popular because we love Skype. Popular because we love free. The notion is particularly popular among entrepreneurs and startup visionaries. In their business it does make good sense. But they aren’t designing, operating, maintaining or securing an enterprise business network. Many of them have never worked in that environment, and simply don’t grasp the ramifications.

There isn’t one single reason. This isn’t a problem that one change in Skype will fix.

First and foremost, the heritage of Skype will always be Kazaa. The Chief Information Security Officer (CISO) of every enterprise is going to remember that for a long time. It isn’t just P2P, it’s the DNA Skype was formed from. We’re three generations of CISOs away from embracing the core of Skype and forgetting the heritage.

Second, there are zero business controls. None. For enterprise business to adopt Skype, the whole supernode architecture will have to change dramatically. Clients will have to be pointed at a specific supernode or set of supernodes. And the client can’t ever be promoted or escalated into a supernode. In essence, the supernode of today will have to be more like a PBX with configuration and management controls that don’t exist today. And the client will have to be revamped to provide controls that also don’t exist.

Third, the encryption deployed in Skype positively precludes it from enterprise adoption. Key escrow doesn’t exist. The algorithm is a black box. Enterprise business can’t buy a magic black box. HIPAA, SOX, ITAR, and a host of other regulations require audit and configuration controls that simply don’t exist. Some organization must either have and document or submit to third party key management systems that Skype  doesn’t use, support, or from all I’ve seen, even acknowledge.

There are several more sound business reasons, but I won’t prattle on endlessly. I think I’ve made my point.

Skype is a renegade telco. As consumers, we love that. We’re ebullient about it. But praise gone wild sounds like technologists deluding themselves into thinking an enterprise that isn’t using Skype is being foolhardy. The opposite is true. An enterprise business has to protect shareholder value and make sound business choices about technology.

There are two phrases that come to mind. There ain’t no such thing as a free lunch (TANSTAAFL) and you get what you pay for. Both are applicable to enterprise adoption of Skype.

Enterprise business simply can’t afford Skype, at free, or at any price in its current design. The enterprise value proposition simply isn’t there, no matter how much many of my friends and colleagues might wish it.

Don’t mistake the enterprise passing on Skype for being backwards or slighting VoIP. VoIP is big and growing in the enterprise, although not quite as quickly as industry pundits proclaim. But it’s growing globally and will continue to accelerate in deployment.

Skype,  on the other hand, is at least 4-5 technology generations from being the right fit for enterprise business. And to get there will require Skype hiring the right people, and listening to the real-world requirements of the enterprise from people who design, operate, maintain and secure those large networks. I haven’t heard anyone in that space say they’ve had any discussions with Skype. And none of the leading architects, designers and developers of real enterprise scale voice services have been in the “just moved to Skype” news that I’ve seen.

I’ll preface this by stating the obvious. I’ve yet to drink the koolaid, but I do have an opinion.

I’ve been reading all the glowing warm fuzzies from many colleagues and friends proclaiming Skype’s new 3G call support as perhaps the greatest innovation from mankind since Jonas Salk gave us a vaccine for polio. Or something akin to that.

I’m more critical. I’m also more grounded in enterprise business than most of the folks I’ve read effusive praise from. Then again, Skype over WiFi from a mobile is barely, mildly interesting, if nearly useless IMHO. I’ve made two mobile Skype test calls since switching to the iPhone a few months ago. They were ok. They were phone calls. They worked. I have no reason to make more.

I’ll grant that allowing Skype to run in multitasking mode on the iPhone could make it mildly more interesting. Again, mildly IMHO. A Skype phone that has to be front and center in a mobile computer (what the iPhone really is) is an impediment to productivity, not an aid.

But, I’m working to keep an open mind here. I really am. So people who buy the most expensive, top-of-the-line phone, and pay for unlimited data, can’t afford enough minutes to make a phone call? Or do they call a high volume of minutes overseas? I never run over the minutes I pay for. The rollover bank is full of more. But I can understand the need for Skype for international calling.

What I don’t understand is what percentage of Skype users see this as so necessary. What percentage has to have this capability over 3G because they’re never at their computers? Sure, I know a few business people who live on international travel and would find this quite helpful. That they’re in a position to afford the calls at going rates doesn’t matter. They want them free on an all-you-can-eat data plan. Ok, I get that.

What percentage of Skype’s user base is this service aimed at? Not my jet-setter colleagues and friends who live in frequent flier clubs and spend their time hopping from conference to dinner to conference to meetup. I’m talking about everyman – the user that made Skype the behemoth it believes itself to be.

I just looked at Skype and according to my client, there are currently 12,665,667 people online. 12 million people, and I’m guessing that a miniscule percentage of those people are mobile. And a miniscule percentage need 3g HD Voice on a cell phone.

So where’s the beef?

Oh wait, I know my friends and colleagues will jump up to say “but have you heard it?” Did you hear that amazing HD quality?  On that I have two thoughts. One backed by facts and the reality of the telecom world. The other is just my opinion.

It’s a fact that callers won’t pay for audio quality. Ask Sprint how those “You can hear a pin drop” ads are doing. I can tell you the pin drop on stage in the Mormon Tabernacle in Salt Lake City is far more effective and impressive. If callers cared about call quality, the PSTN with it’s wired landlines wouldn’t be in a death spiral as users go for portability, mobility and ubiquity. We won’t buy audio quality and we’ve proven that with 140 years of  telecommunications in North American. Buying patterns don’t lie.

As for my opinion, let me ask a question – how do you spend your time on the phone? Mine is spent in two ways. I spend a bit of time on phone calls with people I know – customers, colleagues, family and friends. None of us ever have issue with the fidelity of a call. I also spend an inordinate amount of time on conference calls.

If you’re in conference call hell, do you give a rabbit’s fart about getting better audio quality? Be honest. If you’re on a computer, this 3g smokescreen isn’t a factor. You’re doing email and other work while you’re on the call. And if you’re mobile, you’re driving, or doing something else as well.

Again, where’s the beef? Improved audio quality during conference calls is somewhat  akin to my dentist playing nicer music during a root canal. I’d prefer to change the experience in a more compelling way.

Sure you can tell me the SILK codec is wonderful and we’re early adopters and this is a taste of the future. Maybe, but I don’t think it’s a 3G future. I think it’s perhaps 4G version 2.0 at best before most callers will notice or care.

On the other hand, what problem is it solving? More 3G footprint? Better coverage? Reduced cost? Options? I don’t think so.

Skype 3G HD voice calling is a solution without a problem. It’s hype too far ahead of the curve. it’s a proof of concept without a market. And to me, that makes it just a tad boring.

Skype has been an innovator and disruptor. Note I said “has been” in the past tense. This isn’t terribly innovative. It isn’t the least bit disruptive. It is the sound of a bell ringing. It’s the bell heralding Skype as Telco 2.0. Not AT&T. Not Verizon. Not Qwest. Not BT. Not Telstra. Skype is the first to become Telco 2.0.

That may be a good thing, and it may not. Your mileage may vary. But don’t mistake it for innovative disruption of an industry that’s still ripe for real reinvention. And real reinvention will send all the carriers scurrying for safe ground.