Light Reading

Microsoft Gives Telefónica an Apps Edge

Ray Le Maistre
LR Mobile News Analysis
Ray Le Maistre, Editor-in-chief

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
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
From The Founder
Steve Saunders provides an overview of white box networking and introduces a new "slim line" version of the OSI 7-layer model.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
Centec on Ethernet Switching

11|26|15   |   09:58   |   (0) comments

Centec CEO James Sun talks to Steve Saunders about Ethernet switching and the white box revolution.
LRTV Custom TV
Delivering Service Agility in the Virtualization Era

11|25|15   |   5.41   |   (0) comments

Interview with Massimo Fatato, WW OSS Business Lead, Hewlett Packard Enterprise.
Wagner’s Ring
How Might Open Source Fail?

11|24|15   |     |   (10) comments

Open source, SDN, and NFV are looking inevitable – but performance, standards proliferation and regulatory capture could derail the movement.
LRTV Custom TV
NFV Lifecycle Orchestration – a Fresh Vision for Telco

11|23|15   |   6.40   |   (0) comments

Simon Osborne, CTO Comptel, and Heavy Reading's Caroline Chappell reveal the business impacts of new SDN and NFV, and what the term service orchestration actually means. Together they define Lifecycle Service Orchestration and how the virtualized future will look for telecoms operators.
Between the CEOs
Cisco's Virtual Role in Saudi

11|20|15   |   12:15   |   (2) comments

Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
LRTV Huawei Video Resource Center
Huawei Leads With Kubernetes for Cloud PaaS

11|19|15   |   08:26   |   (0) comments

Huawei is looking to Kubernetes as a key tool for building robust open source technologies for customers and partners, said Ying Xiong, chief architect of cloud platform at Huawei, in an interview with Light Reading West Coast Bureau Chief Mitch Wagner at the recent Kubecon conference.
Women in Comms Introduction Videos
WiC in London: The Highlight Reel

11|19|15   |   5:33   |   (1) comment

NetCracker's Mervat El Dabae headlines an inspiring morning in London with help from leading women from Vodafone, TalkTalk, Hyperoptics and Ciena.
LRTV Documentaries
Why Saudi's So Hot for New Tech

11|19|15   |   05:07   |   (0) comments

Light Reading's Steve Saunders reports from Saudi Arabia, a hyper-competitive market desperate to embrace the next generation of communications technologies and services.
LRTV Custom TV
Why Data Models Deliver More Value Than Information Models

11|19|15   |   5.08   |   (0) comments

Stefan Vallin argues that more automation is needed to manage end-to-end services and the hybrid networks they run on, and that data models are key to achieving this.
Telecom Innovators Video Showcase
SDN Management & Orchestration in the WAN

11|17|15   |   7.20   |   (0) comments

Carol Wilson and Packet Design CTO Cengiz Alaettinoglu discuss CSPs' SDN service delivery and assurance requirements. Learn about a modular approach to building automated control, orchestration and management functions for the WAN that are policy- and analytics-driven.
LRTV Custom TV
Flash Networks: Optimizing for Radio Spectral Efficiency

11|17|15   |   3:34   |   (0) comments

Today most optimization vendors only focus on optimizing voice or data. Ofer Gottfried, Flash Networks' CTO, shows how improving data throughput and maximizing spectral efficiency reduces capital and operating expenses while also providing a platform for user engagement.
LRTV Custom TV
Making Pay-TV User Experiences Millennial-Friendly

11|16|15   |   6:42   |   (0) comments

The unique challenge of reaching and engaging Millennials is driving pay-TV video experience transformation that can include higher quality UIs, viewing of multiple content streams at once and seamless transitions between handheld devices and the television.
Allot MobileTrends Report H2/2015 reveals how daily online behavior can be used to discover smarter ways to profile customers and propose valuable, real-time offers to them.
Hot Topics
Samsung to Sell Wireless Networking Unit?
Dan Jones, Mobile Editor, 11/23/2015
Samsung: No Sale of Wireless Unit
Dan Jones, Mobile Editor, 11/25/2015
How Might Open Source Fail?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/24/2015
Sprint to Get $1.2B From New Leasing Venture
Dan Jones, Mobile Editor, 11/23/2015
Networking Shines in HP's Gloomy Final Earnings
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/25/2015
Like Us on Facebook
Twitter Feed
December 15, 2015
Virtualizing Cable Services
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Centec CEO James Sun talks to Steve Saunders about Ethernet switching and the white box revolution.
Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
Cats with Phones
Can't Find the Phone on Thanksgiving? Click Here
Check under the cat! (hint: bottom right)
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and for copper plant evolution and the various deployment possibilities for FTTH/B.