Light Reading

Microsoft Gives Telefónica an Apps Edge

Ray Le Maistre
LR Mobile News Analysis
Ray Le Maistre, Editor-in-chief
3/28/2011
50%
50%

Telefónica SA (NYSE: TEF) has teamed up with Microsoft Corp. (Nasdaq: MSFT) to offer 6 million .NET applications developers what they believe is an easy and affordable route to the international operator's mobile customer base. (See Telefonica, Microsoft Team Up.)

The partnership, if successful, could create a de facto model for operator/developer relationships as all parties in the chain -- Telefónica, Microsoft, the developers and the mobile customers -- stand to gain in some way. And it's clear, from developers that attended a press conference in London this morning, that the model proposed by Telefónica and Microsoft is a significant improvement on previous efforts from the telecom sector.

Here's how it works. Telefónica's BlueVia unit provides .NET developers with a software development kit (SDK) optimized for use with Microsoft’s Visual Studio development environment and the software giant's Azure cloud services platform. That SDK includes application programming interfaces (APIs) to Telefónica's network resources (currently its messaging platforms). This allows developers to build applications that utilize the mobile giant's network capabilities, as Telefónica outlined in February when it unveiled its BlueVia initiative. (See Telefonica Shows Developers the Money .)

For its part, Microsoft provides .NET development support and, if an application is accepted by Telefónica, hosts the application on its Azure cloud services platform for a recurring entry-level fee that grows only if the applications becomes successful and requires more capacity and support. Microsoft also provides additional support for developers targeting Windows Mobile-based devices and other Microsoft platforms, such as the Xbox, though the applications can be developed for use on multiple mobile device platforms.

For the developers, life is made as simple and easy as possible, with the prospect of recurring revenues if an application becomes successful. There are no up-front costs to use the BlueVia SDK; Instead the two parties forge a revenue-sharing deal that results in the developer taking, for example, 10 percent of any messaging-related revenues generated by the use of the service.

So as a service becomes more popular, Telefónica and the developer both see their revenues grow. Microsoft also benefits from popular services, as while the cost to the developer for being hosted on Microsoft's Azure cloud services platform starts at a low entry point, it grows as an application becomes more popular and requires more capacity to meet demand.

The idea is to encourage developers to create new services that utilize Telefónica's network capabilities, rather than developing a one-time application that is paid for and downloaded once. By building an application that, for example, makes use of the operator's text messaging platform -- such as the secure, location-based taxi-booking service in London called Taxistop -- revenues for both the operator and developer grow each time the application is used.

To date, the perception of telcos by the developers has been "very negative," noted the head of BlueVia José Valles, because the developers have been treated as potential sources of revenue (through charges for use of SDKs). This model, he said, is different, as it treats developers as partners for new revenue growth.

Currently, applications developed through this partnership can be offered by Telefónica's mobile operations in Spain, the U.K., Mexico and Argentina, covering about 80 million mobile subscribers in total. By the end of the year, the BlueVia team, which built its SDK and exposes its network assets using a service delivery platform developed with Huawei, aims to have extended that to Telefónica's nine largest markets that serve more than 200 million mobile users.

Of course, any applications developed will be available only to Telefónica customers, therefore making it a limited market. And the benefits of this partnership are targeted specifically at .NET developers. Microsoft says it's prepared to host applications developed using other platforms such as Java, though this sounded more like lip service than an olive branch.

Why this matters
Despite its limitations, the basis of this partnership could prove groundbreaking in the ongoing development of relationships between mobile operators and application developers.

According to developers that have already made use of the BlueVia and Microsoft assets, Telefónica is leading the way in terms of providing an attractive environment for the applications community, because it's not demanding money up front for access to its network resource APIs. In addition, this model provides the potential for recurring revenues rather than one-time payments for application downloads.

For Telefónica it provides extended access to the developer community and the opportunity to cultivate a reputation as a company that's looking to work with and help developers rather than exploit them. And if the model works, it could lead to data service growth and customer "stickiness."

For Microsoft it's an opportunity to get even closer to Telefónica and to further develop its Azure platform in terms of use and revenues. It's also an opportunity to enhance its reputation among the telecom operator community. BlueVia's Valles told Light Reading that Microsoft's Communications Sector team had been "very easy to work with. It has changed. Microsoft has lost the arrogance it used to have."

And for the mobile market in general it may point the way toward a model that can help operators engage more quickly with developers following years of frustration.

For more
Operators have been trying to figure out how to broker a meaningful relationship with applications developers for some time.

— Ray Le Maistre, International Managing Editor, Light Reading

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
digits
50%
50%
digits,
User Rank: Light Beer
12/5/2012 | 5:09:17 PM
re: Microsoft Gives Telefónica an Apps Edge


A comment worth remembering... even if it does only pertain to Microsoft's Communications Sector.

Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
From The Founder
Network architects aiming to upgrade their networks to support agile, open, virtualized services in the 21st century need to consider new criteria when choosing between technology suppliers.
Live Streaming Video
BTE 2015 Sponsor Keynote: HP
Dr. Prodip Sen, CTO, Network Functions Virtualization, HP
LRTV Custom TV
Red Hat Demo

7|2|15   |   10:53   |   (0) comments


Red Hat's Nicolas Lemieux demonstrates how Red Hat is driving innovation through open source communities.
LRTV Custom TV
Red Hat's Approach to OpenStack Adoption

7|2|15   |   5:17   |   (0) comments


Red Hat's Radhesh Balakrishnan outlines his company's open source strategy for both enterprises and telcos.
LRTV Custom TV
The New IP Goes Mobile With vEPC

7|2|15   |   1:12   |   (0) comments


Heavy Reading's Gabriel Brown discusses results of a Light Reading survey sponsored by Brocade that shows a clear commitment by mobile operators to move quickly to virtual EPC deployment.
LRTV Custom TV
Making Business Sense of SDN

7|2|15   |   1:42   |   (0) comments


Results of a Brocade-sponsored survey show that CSPs have a clear sense of SDN use cases but are wrestling with the business case. Sterling Perrin of Heavy Reading looks behind the numbers.
LRTV Custom TV
NFV Will Be Here Sooner Than You Think

7|2|15   |   2:22   |   (0) comments


Forget the usual ten-year cycle for new technologies – NFV will be a core part of CSP networks in five years, based on results of a Brocade-sponsored survey, says Heavy Reading's Caroline Chappell.
LRTV Custom TV
The New IP Gains Traction With CSPs

7|2|15   |   1:42   |   (0) comments


Roz Roseboro of Heavy Reading analyzes results of a Light Reading survey sponsored by Brocade showing that CSPs are getting serious about making the transition to the New IP era.
LRTV Custom TV
It's (Real) Time for Analytics

7|2|15   |   1:42   |   (0) comments


Heavy Reading's Jim Hodges looks at how CSPs say they plan to use analytics to deploy new services in real time as part of The New IP, based on results of a survey sponsored by Brocade.
LRTV Documentaries
IoT in Action

6|30|15   |   1:39   |   (8) comments


Two co-workers discuss the benefits of IoT technology.
LRTV Interviews
Ericsson Opens Up on OPNFV

6|30|15   |   14:16   |   (1) comment


Martin Bäckström, VP and head of industry area Datacom at Ericsson, talks to Light Reading founder and CEO Steve Saunders about the emergence of OPNFV, the importance of standards and Ericsson's OPNFV plans.
LRTV Custom TV
NetNumber Founder Discusses NFV/SDN Impact on SP Networks

6|26|15   |   4:15   |   (0) comments


NetNumber Founder Doug Ranalli examines why SPs need a new network infrastructure for service agility. While NFV and SDN are the tools, the old ways of thinking about signaling control are inhibitors. Doug provides his recommendations.
LRTV Custom TV
Orchestrating NFV vCPE Services Across Multivendor Networks

6|26|15   |   5:46   |   (0) comments


Nirav Modi provides an overview of vCPE, the fastest-growing NFV use case, showing how Cyan's Blue Planet orchestrates vCPE services across a multivendor infrastructure to rapidly deliver new managed services for business customers.
LRTV Custom TV
ZTE at LTE Summit Amsterdam 2015

6|26|15   |     |   (0) comments


As one of the leading global telecommunications providers, ZTE presented its cutting-edge technology at LTE World Summit 2015 in Amsterdam. On display at ZTE's booth were the latest R&D achievements in wireless, 5G development, HetNet, deep convergence of FDD and TDD, and RCS/IMD/iSDN/vCN.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
All Upcoming Live Events
Infographics
Hot Topics
Who's Feeding Fiber to LinkNYC Hotspots?
Mari Silbey, Senior Editor, Cable/Video, 6/29/2015
Colt to Jettison Ailing IT Business
Iain Morris, News Editor, 6/30/2015
What's a Gigabit Good For?
Carol Wilson, Editor-at-large, 7/1/2015
Eurobites: Activist Investor Takes Stake in AlcaLu
Paul Rainford, Assistant Editor, Europe, 6/30/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Casa Systems has been going from strength to strength over the last couple of years. In 2013, it became the first vendor to ship an integrated CCAP device -- the ...
Cedrik Neike, SVP of Global Service Provider, Service Delivery, at Cisco, talks to Light Reading founder and CEO Steve Saunders about solving service provider customer problems in a virtualized, DevOps world, including multivendor support and the future of network procurement.
Cats with Phones