Mobile Sands

March 28, 2009

Open Access Makes Networks Valuable Platforms – Not Dumb Pipes

Filed under: Android, App Store, iPhone, LTE, Mobile Apps, New business models — Tags: — AJ @ 2:13 am

“Open” is in the air 

Recently AT&T chief Ralph de la Vega talked about open development platforms with FierceWireless. In his view, handset platforms are not open if they use proprietary APIs to access handset capabilities and he stressed the need for open APIs within handsets. A friend at Verizon reminded me earlier this week about Verizon’s Open Development Initiative (ODI) which allows third-parties to get hardware certified to work on Verizon’s network and Verizon’s upcoming 4G innovation lab

Among handset vendors, Nokia wants to open-source Symbian and Google is already doing so.  Google’s Android, in particular, is widely regarded as open. In contrast, many industry commentators, including FierceWireless editor Sue Marek, call iPhone and Blackberry closed because Apple and RIM will not license their OS to other handset vendors.

 Defining “open”

 If we are willing to accept the Internet as the gold standard of openness, the more a system resembles the internet, the more open it is. Therefore an open system is one that

  1. Anyone can access on equal terms
  2. Anyone can build content and applications on equal terms
  3. Anyone can distribute their content and applications on equal terms

Based on this definition, Apple’s iPhone provides a remarkably open platform for application developers and consumers, even while Apple keeps its OS closed to other hardware manufacturers. In a sense, iPhones are a similar to Sun Servers that power large parts of the Internet – a proprietary hardware/software combination that is available on equal terms to users and developers.

 “Open” does not mean “free”

Since the terms “open source” and “free software” have been used interchangeably, it has created the impression that free means open. This is not true in general. For example, free broadcast TV is actually a closed system.

On the other hand, two of the most valuable “open systems” we all use – the electricity grid and the phone system – are not free. However, they are open because everyone can access them on equal terms. Anyone can create applications and end-points for them (cordless phones, answering machines, refrigerators) and can distribute these applications. Technical standards that require patent holders to contribute IPR under a FRAND regime are open in the same way.

 The “dumb pipe” misnomer

Whoever came up with the term “dumb pipe” did a tremendous disservice to the mobile industry. Imagine how people at facebook would have feel if they were dubbed  “that dumb online directory” for offering open access to application developers. Instead facebook have been celebrated as a “platform”. In the same vein, the right way to describe a network that provides open access on equal terms is not “dumb pipe” but “platform.”

Once network providers start thinking of themselves as platforms, they will see the benefit of allowing huge number of third-parties to create applications on their platform.  Most of these applications will fail, but the applications that succeed will not only make the developers who creat them rich, but will also make the network  incredibly valuable for consumers, and for the investors who own the network.

 

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