The network API model needs developers

Send developers. And a line of code?

As Verizon becomes the latest operator to say that it will collaborate with a vendor on APIs – in this case with Ericsson’s Vonage – there are still several outstanding issues to resolve for business models built on network exposure via APIs. Deutsche Telekom also has a deal with Vonage to offer its APIs. BT is working with Nokia to use its platform, as is Dish, and eight other operators, according to Nokia.

“As we evolve our API journey, we welcome collaboration with companies like Vonage who share our passion to make network capabilities available to developers for the advancement of the connected world,” said Verizon’s Srini Kalapala, SVP of technology and product development, in a release.

The business model in Verizon’s release was left out. Presumably there’s some sort of revenue share involved, although there may be a wholesale traffic element involved. However, it seems unlikely the operator will want to be a mere conduit for Vonage’s business.

There’s also another outstanding issue for the API platform model. It will require enterprise developers to write applications and services that use those APIs.

The Verizon release says that the plan to integrate the Verizon network services into Vonage’s platform “will enable enterprises to create deeper engagement with consumers across the customer journey to drive a better overall experience and brand loyalty”.

For that vision to work, those enterprise developers will need to access the APIs and integrate them into their services in the same way that Twilio’s developer community does. Telcos need to work with developers. Where are they?

TMN Quarterly, TMN’s magazine, covered the topic in depth in an issue published in November 2023. Here we publish segments from two interviews carried out for that issue – with Oracle and with Totogi. To receive the full feature in the issue and all our other issues, sign up now for a magazine subscription…

Totogi

Danielle Royston is CEO of Totogi, a cloud-based billing software vendor with big ambitions to make telco billing platforms more flexible. For her, even if the telco does move to a cloud-based network with the automated functions and exposure capabilities it needs, there’s still a big unresolved question.

For Royston, the main issue with the API monetisation route is not technical, it’s commercial. How are telcos going to access developers to write services to their APIs? “I think technically, we have the skills to go build that. Let’s just say everyone is instantly on public cloud and you’ve built it the right way and it works and it’s ready today. The problem with APIs is there’s a network effect. It’s a little bit like Uber; if you just had drivers and no riders you would have no revenue. And if you had riders and no drivers, the same.”

“For APIs that problem would be good – if we had huge demand we would have a business case right now. But we don’t have any drivers, which in telco is developers. Where are we going to get developers? I think that’s a fair question.”

I’m going to steal the developers from Twilio and help telcos get them.

Royston uses Twilio as an example.
“Twilio has the most basic case of a programmable communications API, which is sending an SMS to confirm an appointment or whatever else. It’s the most basic easy thing. It’s boring almost. But they’ve built a developer ecosystem of 10 million developers. They are a $4 billion company, $11 billion market cap.

So how did they do that? They spent a tonne of marketing dollars – pizza parties, hackathons, trawling Slack and GitHub, to go where developers reside.

“Are telcos going to build it themselves? Hackathons and whatnot? Let’s just pretend all the APIs are amazing. They’re designed perfectly. They’re interconnected, open gateway, blah, blah, perfect. We still need developers.

“So from my position, even before you even get to talk to tech and all that stuff, that’s a real problem. Before we run off and build all these crazy network exposure functions, we’ve got to make sure we have a business case. And for the business case we need developers – and we’ve really got to solve that.”

And with some suggesting that partnership models could be a way forward for telcos, Royston questions why telcos’ proposed partners would “hand over” their developers.

“That’s a valuable commodity. Owning those devs mean that you own the code bases. And once your code is compiled, working, tested, and sending out billions of messages a month or whatever it is, that’s highly booked revenue. Why would they give telcos developers? To
be nice?”

Similarly Royston doubts telcos would “hand over” their APIs on a partnership model.“They’re going to hand over their network exposure function APIs to AWS? I don’t know that I would. I mean, isn’t that your secret sauce?” Royston has a different idea, with an API-based service from Totogi she is calling Whoosh! And that she describes as a plug and play set of replacement Twilio APIs.

“I’m going to steal the developers from Twilio and help telcos get them. Twilio definitely won round one on boring SMS: they built a developer community and all that code is trapped in thousands of enterprise workloads and applications. “And so I bought Kandy out of bankruptcy for $6.7 million – and they had the CPaaS technology, but it was not Twilio compatible. So we asked, can we reposition those APIs to be Twilio compatible, so that they are frictionless? It has to be simple.” Royston outlines the goal.

“If we were able to take an application like appointment confirmation and in one line of code, recompile it, change the traffic from Twilio – which least cost routes, and probably uses the internet as much as possible – and use owners’ economics to redirect that traffic to use as much of my [telco] network as possible, that is a win for the telco. I would capture the enterprise code and developers so that I can monetise my super valuable local location API.” Royston concedes that it’s a complicated strategy.

“I’ve got to sell it to the telco, and then the telco enterprise sales group needs to sell to enterprises – hard. Not simple, not a no brainer. And then the enterprise has to put my one line of code in there for this to all work.

“I’m making an assumption that because Twilio has essentially won, most enterprises are using Twilio. So yes if they’re using Vonage or Sinch, this doesn’t work. But most enterprises aren’t. Most enterprises are using Twilio. So I’m just going after the 800 pound gorilla.”

So far, Royston claims, “everyone likes it”.

“You know, I wouldn’t say I have tier ones beating down the door, but you know, I had an enterprise customer that’s in cable, and they have an MVNO with a tier one. And they send out 300 million SMS a month on Twilio and said they would like that price to be half of what it is, going through aTier One in the United States. They said,“Can you do that?” And I have got to get the Tier One to say yes. But I’m bringing them a new customer. That’s millions of dollars in revenue. So there you have the impetus to add my one line of code – if you just get the Tier 1 to say yes.”

Oracle

Another company that has been thinking about how to bring the network to developer communities is Oracle.

The database giant is also a major provider of cloud-native functions to telcos, as well as of course having a large cloud and IT presence in many industry verticals. 

Shirin Esfandiari, Senior Director of product marketing at the Oracle Communications Global Industry Unit, says, “When we talk about programmability or network as code, all of that simply means providing a frictionless way for others to consume what a service provider has, and creating a service around that.

The conversation that we’re having is that there needs to be a broader set of scope to really open this up and help the monetisation question and the business model question. As an industry there’s still a huge question mark in terms of how are we going to monetize this and what those business models are going to look like? 

Programmability itself relies on the construction of a cloud-native, automatable network. But for Esfandiari, the more salient question is how operators exploit those capabilities in a business environment.

That means asking questions such as, “How do I expose these services? How do I open this up to this developer community, to all of these interactive enterprises?”

“Driving transformation across industries means you need to have the right level of API exposure and the applications and strategy that goes with that.”

Esfandiari points out that Oracle has 21 industry-specific business practices where it is “in the midst of solving some of these transformation challenges”, calling out areas such as healthcare and manufacturing. That puts Oracle in a position to bring that ecosystem to the service providers, “because fundamentally their customers are looking for solutions that are that are specific to their industry.”

For Esfandiari, industry API programmes such as CAMARA and the TM Forum’s are useful and good, and Oracle is involved – indeed it is on the board at CAMARA. But she says that, looked at from the viewpoint of the developer ecosystems in its 21 industrial verticals, their needs go beyond simple access to an API.

When you talk to the service providers, they have maybe a subset of APIs. When you talk to developers, those APIs’s look different, their needs are broader

“What we’re seeing is that these business outcomes are going to expand the scope of TM forum and CAMARA.

“The conversation that we’re having is that there needs to be a broader set of scope to really open this up and help the monetisation question and the business model question. As an industry there’s still a huge question mark in terms of how are we going to monetize this and what those business models are going to look like? 

“When you talk to the service providers, they have maybe a subset of APIs. When you talk to developers, those APIs’s look different, their needs are broader. So we are in a position where we tend to bridge that gap internally for ourselves, because we have the comms, we have those developers in house from an Oracle perspective..

Esfandiari gives one example. Working with “state and local” authorities on first responder services. 

“These first respondents need to have situational analysis. They want to have real time video audio feeds when they go into an emergency situation. So, Oracle provides the wearables, the actual systems, the applications that are installed in the car so that these guys can do all of that analysis in real time rather than all of the paperwork that goes afterwards. All of that is sent back to the dispatch centre. And depending on what the emergency situation is, even to the jail management booking system.

“So there’s a mobility aspect here – the car that’s moving around. There’s a real time audio video conferencing aspect here. There are edge applications processing data at the edge.

We have brought these communication capabilities to a solution that is GA today. 

“The main point is that we worked with their API developers. They’re telling us, ‘You need to expose these sets of APIs from the network so that we can ensure that our application is going to work seamlessly. This is what we need to consume’.” 

Esfandiari says Oracle is doing the same work with a totally different industry, which is food and beverage. Here the company is looking at providing a restaurant in a box experience to some of the tier three tier four smaller restaurants.

“Working with that industry they’re telling us these are the APIs that we have and this is what you need to expose, in order for us to be able to get the comms inside and capability that we need to make this application successful. 

“Those are the conversations that we’re having when we’re talking about disparate service providers saying hey, this is what these APIs require. What are the investments you’re going to have to make in your network? Be mindful of what analytics and exposure are going to be needed in this framework. These are the set of capabilities that you’re going to need in OSS BSS. These are some other sets of capabilities that you may need when it comes to exposing some of your partner management systems. So it’s a much more outside in view.”

Esfandiari says that right now Oracle is active in the forums. 

“CAMARA at MWC announced 12 APs that the Consortium of service providers are agreeing on. So then the question is, are those the ones that that are really going to open up the door for the developer community? And what are all of the considerations that needs to be done there?”

In her final point, Esfandiari points out that perhaps it is companies like Oracle that can act as the abstraction layer that Vodafone CTO Scott Petty identified as critical to the fortunes of telcos like Vodafone.

“The point we’re making is that we being Oracle, we can offer that industry perspective. And we are also part of the community – we want to make it a success. So potentially, we could look at what’s available from a network centric perspective, but abstracted and make it relevant for the industries.”

Comments

0

Leave a Reply

Your email address will not be published. Required fields are marked *