This is from an AT&T press release not so long back:
AT&T*, already the leading carrier deploying network Application Programming Interfaces (APIs) to developers,1 today announced it has launched an enterprise-focused API program that allows enterprise customers, wholesale collaborators and solution providers to innovate using AT&T network APIs.
Led by industry thought leader Laura Merling, VP of Ecosystem Development and Platform Solutions, AT&T is pursuing a telecommunications industry API opportunity expected to grow to $157 billion in global revenues by 2018.2
APIs are software interfaces that provide access to data and core functions within AT&T’s network. By opening up its APIs to customers, AT&T believes it can help them meet three key challenges: do more without spending more; harness technology to gain competitive advantage; and support their ability to create and deploy applications that can be used on almost any device around the world.
Some examples of how enterprises can use AT&T APIs include:
- Content formatting: Using APIs, video content from a company’s video library stored in the cloud can be easily optimized in near real-time for users to watch on almost any device and network.
- Communications services: To bring more efficiency and productivity to business operations, businesses can use APIs to automate voice and video calls, integrating speech and video services into applications.
I interviewed Alan earlier this week, and here is our joint “state of the telecom API nation” report.
MG: My early telecom API project crashed and burned, and past industry initiatives like ParlayX never took off. What has changed since the early 2000s that is triggering new and rapid growth?
AQ: Both the technology and the market have evolved. Large new developer communities have been created by Apple and Google, delivering value through those ecosystems. The need for such ecosystems and partnerships in telecoms is now driven by business demand, not technology supply, and thus is no longer seen as unusual or controversial.
Ten years ago there were developers, but the developer platforms were not as sophisticated. The technology was complex to consume, so you had to be a hardcore developer to use what was on offer. Today we have a mass developer market of people with Web development skills, and an Independent Software Vendor (ISV) market able to consume telecoms capabilities using their existing skills base.
The whole ICT industry – including ancillary services like consulting and equipment – is around a $5tn annual market. Yet it notably lacks a large-scale profitable developer ecosystem for networked service delivery. Why has it failed? Historically there have been too many silos, and too much friction to engage with them. What we are now seeing are companies like Apidaze, Bandwidth, OpenCloud, Plivo, Telestax, Tropo, and Twilio eliminating both of these. Lots of money is being spent on marketing to developers, creating a new business opportunity that telcos and broader ecosystem can take advantage of.
Notably this ecosystem is about more than just APIs. There's also the whole free and open source software arena too. Tools like FreeSWITCH, OpenCloud, Mobicents and WebRTC are becoming core to service innovation. Platforms like Tropo’s Ameche open up new opportunities for value-added voice services. We will be looking at the whole development stack at the Summit in Bangkok.
Who are the key consumers of telecoms APIs and what for?
Telecoms APIs are generally used by enterprises that are embedding communications into their core processes. The term “Communications Enabled Business Processes” was used in the past, but the name never took off, even if the concept did. As such, there is a quiet enterprise communications revolution going on. (See my recent articlefor more information.)
Lots of businesses are doing cool stuff, often to sell to other enterprises. These projects and platforms may not get much press individually, but collectively they add up to a significant market.
For example, Turkcell are a leader in this area of enterprise API delivery. However, they don’t talk about APIs, because it’s about the end user and the value from a better customer experience. They focus on promoting their enterprise services, all of which are (crucially) backed by sales team with technical support. Example services include FreeURL, where customers surf on your pages for free; customer device model and mobile number to support efficient and effective interaction regardless of end user device type; a “find the nearest store” capability to drive sales; and click to call services to capture leads.
That these telecoms services use APIs is about as interesting as them using electricity. The business value and innovation is in the enhanced customer experiences they enable.
Who makes money from producing telecoms APIs and how?
Everyone can! Telcos, intermediaries who work with the developers, enterprises and systems integrators. To make progress, however, telcos have to accept they can't do everything for themselves. For instance, you have to know what developers want – and that means Web scripting, not REST APIs. We will for the foreseeable future need middlemen who translate the value of telecoms APIs into a consumable form.
The greatest value is in customer interaction APIs. The need to communicate with suppliers and customers is fundamental to the human condition, we have been doing it for millennia, and will not stop any time soon. There are long-established markets like bulk SMS and automated calling, and these are ripe for new growth with new capabilities to interact and transact with customers.
What are the most promising areas for future growth?
The growth is around value-added services, notably around the current voice cash cow. It’s time for telcos to remember their heritage: you're the phone company. The distracting “digital lifestyle” stuff only makes money for the content companies. There are too many adjacent businesses being built where the telco doesn't have enough competence, and are competing against low-end competition (e.g. cheap webcams vs managed CCTV or home monitoring services).
Lots of consultants are selling future billion-dollar markets that don't exist. Telcos need to stick to the basic nuts and bolts of communications services, and do them better.
What are the key challenges facing this space?
The key challenge is that this game is that it requires an ecosystem, and telcos are islands. That doesn't mean they should copy Apple and Android, but instead they need to focus on segments where they have credible value and an advantage. A $5tn industry should be able to do this.
What it requires is a whole offering, including sales, business development and support. API-enablement is just a piece of technology, and this cannot be led from a network or IT function; it’s a line of business. The improvement and value to the customers has to come first, and getting the mindset right is hard. We have proof points that you can make money, thanks to companies like Telestax, Tropo and Twilio, if you build a whole supply chain.
Finally, Alan Quayle has posted his independent review of Telecom API's which is embedded below:
Do you have an opinion on Telecom API's? Feel free to add it in the comments.