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Transforming telcos to an "app economy" – Alcatel-Lucent Buys ProgrammableWeb – Quick Analysis

Alcatel-Lucent announced their acquisition of ProgrammableWeb today. The hope is the further build out a platform that helps carriers provide mobile apps on-top of their services, hoping to compete with the iPhone and other “smart phones” that separate customers from cash with “apps” instead of “phone.”

Open APIs

Learning from the web

The idea of an “open API” comes largely from the web where free, simple access to services and data provided by many web sites is used to build popularity and valuable communities (which are then either solid for glorious exits, or milked for ad revenue or VC funding in hopes of said glorious exits).

ProgrammableWeb has long cataloged these open web APIs. In theory, buying ProgrammableWeb helps extend Alcatel’s open API initiatives more in the web space: much of the API usage that fuels mobile apps are done with web APIs anyhow. Technologically, many of these APIs shouldn’t care if the client access them are web sites, servers, or mobile devices.

The Motivation

Creating more reasons for customers to spend money.

What Alcatel is looking to bring to its customers is a richer pot of honey to attract developers with: those developers come to a carrier’s slice of the mobile world, develop apps using the various APIs, and if the apps are popular, they help retain and gain customers. Carriers are always at pains to draw down the high turn-over rate among customers, and gaining new customers is an even sweeter goal.

The larger context for Alcatel-Lucent is this: As a technology dealer for carriers and telcos, Alcatel-Lucent is trying to modernize carriers with technology open APIs. They want carriers to lure mobile application developers and get those developers to start interacting with the carrier service. The idea is to build out “value add” on-top of the traditional voice and data services, creating “apps” (to use the iPhone parlance) for users and revenue streams for both carriers and developers.

Mobile Context

The transforming mobile space: beyond data and voice.

In the post-iPhone era (at least in the US), carriers are feeling the pressure to deliver applications in addition to their usual voice and data “services.” Granted, current revenues in these services may dwarf whatever whacky stuff is happening in the smart phone era, but the writing seems to be on the wall: eventually, the category of “smart phone” will go away and all phones will be little computers in people’s pockets. There’s still loads of pre-paid and “burner” phones out there, but when you can get an iPhone for $99 (granted, with a two year contract) at Wal-mart, it seems just like a matter of time before all phones are smart.

In that kind of world, it’s all too easy for carriers to become dumb pipes and stupid networks: commodified services that can only compete on price and (though AT&T’s piss-poor quality shows the opposite when desire-fulfillment monopolies are created) quality of service, not features and functionality. No one wants their fat and happy industry to become a cut-throat, miserable world of competing on price like the US airline industry.

So carriers need something beyond data and voice to sell: apps. Buying ProgrammableWeb is a very small part of that, but it’s a good bucket of developer culture and technology to bring to the table.

More

  • Official press release: “Alcatel-Lucent Acquires Leading Web 2.0 API Repository ProgrammableWeb.”
  • Alex Williams at ReadWriteWeb covers the buy – I spoke with him for the story so you can see some of the above in the peice.
  • Sam Diaz at ZDNet – “There’s a puzzle being built by Alcatel-Lucent, one where an application development ecosystem will eventually reside on the network. Slowly, the company is putting together pieces of this puzzle to drive toward that goal.”
  • Ray Le Maistre takes an extended look at the carrier cultural landscape and “AlcaLu’s” attempts to modernize them – “Just as big a task, though, is to get the carriers on board. [The president of AlcaLu's global developer strategy, Laura Merling, a former independent consultant who joined the vendor six months ago] admits it’s still a relatively small number of operators that are being proactive at present, but there are pockets of interest in particular markets, such as France, the UK., and across Asia/Pacific in general, where the carriers, collectively, are looking to move the market forward.”
  • John Musser speaks to ProgramableWeb’s future: ” In addition to remaining the independent home to APIs, this partnership gives us the resources to scale by delivering more timely and focused coverage, expanding our directory, and adding new services for developers. By joining with Alcatel-Lucent we are part of an organization with a compelling vision to be a bridge between developers, enterprises, and service providers, which neatly fits our long-term strategy.”

Disclosure: Alcatel-Lucent is a client.

Categories: Development Tools, Quick Analysis.

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Continuing the Discussion

  1. [...] arms-dealers like Alcatel-Lucent are working on their own platform, and I’d expect to see more telco ecosystem folks – handset manufactures, telcos, [...]

  2. [...] In the history of things, this would have been a long-shot in the mashup-crazed days of a couple years ago (remember “mashups”?), but now with cloud and mobile driving a return to heavy API usage (really, a sort of “son-of client/server” model of development in the case of the later) the usefulness of an API abstraction layer is obvious. As an example, see the hopeful strategy driving Alcatel-Lucent’s buy of ProgrammableWeb from awhile ago. [...]