Enterprises want to understand mobile market What are the biggest challenges operators face right now?
SAP Mobile Services president John Sims: Each region is at a different stage, but overall operators’ traditional revenues are either under pressure or starting to decline. They all have a desire to find new ways to generate new revenue sources, and many of them are looking at the cloud as a potential opportunity that leverages a lot of their skills and fits their way of selling to the enterprise because a lot of them, when they sell to the enterprise, they call on the CIO organization. So in selling cloud services they can still call on the CIO organization.
I think where they struggle is moving beyond that, starting to call on the other lines of business within the enterprise, whether that’s the marketing line of business or for some of the cloud-based apps for different application areas such as finance, manufacturing, etc.
They have a tough time with that, so they tend to stick with things like cloud storage and cloud capacity, as opposed to getting into the application space. Although many of them have a desire to move there.
Some have started with things like mobile device management and mobile security. In fact, SAP partners with a number of them, where they take our mobile device management, mobile device security products, host them in the cloud then resell them to enterprises.
What are enterprises looking for from telcos?
We’ve been spending time talking to enterprises, which say they know their customers, or in the case of the public sector their citizens, are spending more of their lives on a mobile device, and yet they kind of feel like they’re in the dark about what they really do, how they do it, when the do it. So if the operators can help them get a better handle on that, they could be a lot more effective, and in the end the consumer or the citizen should find it more convenient, relevant engagement from these organizations.
Enterprises are asking for help in better understanding the mobile world. They’re trying to understand patterns of movement by time of day, demographics, location, and so on.
Are telcos in a position to provide that today?
We think that data is almost a kind of a dead asset sitting inside of the operators’ networks, which they’ve shunned away from, using the data a little bit to help them do network optimization kind of things, maybe to make sure they are billing for all the services that are delivered, or for revenue assurance functions.
But generally speaking for marketing, even their own internal marketing, they haven’t really used it that well. I think that’s because they’ve been intimidated by the size of the data. Even a medium-sized operator is putting out between 1 and 2 terabytes a day. So if you try acumulating one or two or six months, you start to get some pretty big numbers. And because of the amount, it’s also the cost, to take that and be able to perform reasonable analysis against is a pretty heavy upfront investment for a new revenue area that they’re probably not fully convinced about yet.
There are some operators that have done some things, but generally they do after-the-fact analysis, which is not close to real time and of limited value.
What’s the message from the multinational consumer companies?
When we talk to the the global brands, they say “we do business in a 100 countries, we can’t talk to 200 to 300 operators. So we need a way to have that simplified for us.” So for the enterprise side while they have a desire to get into this, it is an inhibitor for them. In the mean time what the enterprises are doing is relying on focus groups, they’re paying marketing agencies reasonably large amounts of money to do small focus groups, to pay people to put apps on their phones to monitor what they’re doing. Generally speaking those approaches get them certainly less than 1% of a market view, so it’s very limited in scale.
How is SAP attempting to bridge that gap?
Consumer Insight 365 is a cloud service based on SAP’s Hana in-memory computing platform, which is built for big data. For these kinds of analytics it’s 10,000 to 12,000 times faster than disk technology.
We partner with operators that provide us the data. Before they send the data, they enrich the information with some demographic data -- whether the user is male or female, what age they are. In the case of the US, we get the first two digits of the zip code, so we know generally where they’re from but we don’t know specifically, and we get location information of the actual usage, where they were when they were using the device. We don’t get their phone number, they hash that, and they anonymize anything else that would allow us to identify the individual.
How is the data shared?
They give us that data, and our goal is for that to be streamed to us straight out of their systems. In reality, in the beginning it’s going to be in batches on a daily bases and then we run analytics against that and make it available on a subscription bases, with different tiers.
Simple things like how many iPhones are in use in such and such operator’s networks at a particular point in time. We get pretty accurate information about different handset types and different operating systems and so on.
There are standard reports at the basic level and intermediate level, but at the top level you get those sorts of things as well as the ability to do custom reporting.
What kind of custom reports are you able to do?
They have a visual interface; you can take a map of the UK draw a triangle and say I want to know everything that’s going on in that triangle. So maybe there’s a concert going on somewhere. You can also find the demographic of people using mobile in areas, by age group, by gender and it would then show things like top websites, apps being used in each of those demographic groups, and you can change and switch them and you can compare them side-by-side.
What has been the reaction from telcos?
Some operators say, “I don’t know if I want to give my data to you, maybe I want to sell it”. Our view is if you give your data to us, we’re making all the investments in technology to be able to get you the analysis. But if you want to sell it, you can brand the analysis and take it to the market.
So in Asia, for example, you may be talking to an operator in Thailand and they say “I’m not going to be able to sell to the large global brands”. So SAP can help substantially with that. But the operator knows many Thai companies and has relationships with them, so maybe they can sell to the local market and SAP can sell on the global market. We view this as not being competitive with the operator at all, but rather something that enables them to start to develop this revenue stream.
We feel like this is a service that helps to bridge these two worlds. The others thing that enterprises tell us is that mobile operators tend to bamboozle them with an alphabet soup of standards and records. They said, “we don’t understand what they’re saying.”
Generally when we’re talking to enterprises about these sort of services we’re talking to people in CMO organizations, and likewise they’re not very well understood by the operators. So you got sort of two sides speaking two different languages, and another dimension of what we do is try to be that translator in the middle to help each side get what it needs out of it.
When will it be available in Asia?
We launched it in early June in the pilot phase, and we said general availability would be available in the third quarter, so by the end of September.
Since the hurdle we face are focus groups and surveillance apps, which covers less than 1% of users, we think that if we can get one operator that’s committed, we already have a viable service. But generally speaking, country by country we’re trying to get two operators.