Why Telcos Need Web 2.0

NXTcomm News Analysis Craig Matsumoto, Editor-in-Chief, Light Reading 6/1/2007

IMS might not be the answer, it turns out.

Service providers looking to create new revenue-driving applications will instead have to adapt to the Web 2.0 world, using the concept of "mashups" to quickly create new Web-based services, according to the latest Services Software Insider report, Telco Web 2.0 Mashups: A New Blueprint for Service Creation.

The alternative -- using telecom-oriented standards such as IP Multimedia Subsystem (IMS) and the Session Initiation Protocol (SIP) -- just won't be fast enough, analyst Caroline Chappell argues in the report.

"To beat the Internet companies at their own game, a growing number of network operators believe they need to find a way to harness the service creation potential of Web 2.0 and steer it toward making money," Chappell writes.

What's at stake is the operators' place in a Web-driven world. The services realm is getting hijacked by non-telcos like Google (Nasdaq: GOOG) and Yahoo Inc. (Nasdaq: YHOO) -- often called "over-the-top" providers -- that are beating telcos to the punch when it comes to creating hip new services.

"SIP servers or no SIP servers, telcos cannot -- on their own or even with select partner ecosystems -- build all the services the long tail of users and niche markets will possibly want," Chappell writes.

Mashups are browser-based applications that draw content from multiple sources on the Web, and they're often created by third-party developers that are given the chance to tinker with applications. Mashups are the key to the speed at which Web 2.0 moves, because you've got so many developers trying out new ideas. Telcos should embrace the concept if they want to keep up, Chappell argues.

BT Group plc (NYSE: BT; London: BTA) is trying the idea in pilot mode with what it's calling Web21C, a service aggregation environment for the 21CN network project. Web21C supports "normal" telco services as well as Web 2.0 services, as BT expects it will need both.

The project has taken some serious commitment. In laying out a case study of Web21C, Chappell notes that BT had to quickly develop an "agile" development process "significantly different from the 18-month, waterfall-based lifecycles common among telcos."

Web21C isn't generating much money yet but has attracted 2,500 developers, Chappell writes.

The report also includes an overview of mashup design tools from:

— Craig Matsumoto, West Coast Editor, Light Reading

The report, Telco Web 2.0 Mashups: A New Blueprint for Service Creation, is available as part of an annual subscription (12 monthly issues) to Light Reading's Services Software Insider, priced at $1,295. Individual reports are available for $900. To subscribe, please visit: www.lightreading.com/servsoftware.