Alcatel-Lucent's ng Connect Program

Telco equipment manufacturer finally asks businesses and customers what they want and whether they'll pay for it.

by Alex Goldman ISP-Planet Managing Editor [February 17, 2009]

I get cynical when I hear pundits say that universities need to earn money by delivering profitable research. I imagine a computer course in which students learn one company's CLI. Shouldn't the companies be paying for this, and conducting the research outside the university?

Alcatel-Lucent is doing it, says Derek Kuhn, the company's vice president for emerging technology and media. He participates in the University Innovations Program. He is on the board of the Entertainment Technology Center at the School of Cinematic Arts of the University of Southern California.

"It gives me tremendous insight into how leaders from the technological side of entertainment are looking at connectivity," says Kuhn.

Alcatel-Lucent presented a global effort yesterday to connect businesses, customers, and internet technology at this week's Mobile World Congress in Barcelona. It's called the ng Connect Program and the press release says it's "dedicated to establishing a rich and diverse ecosystem of infrastructure, devices, content, and applications for both mobile and fixed broadband networks including 4G, Long Term Evolution (LTE), GPON, and other ultra high bandwidth technologies."

Market research
I see it as the sort of basic market research that the phone companies should have been conducting ten years ago. Better late than never.

When I mention this to Kuhn, he points out that companies were conducting this kind of market research ten years ago. He chaired the Broadband Content Delivery Forum which, on January 1, 2005, merged with the Service Creation Community to create the Broadband Services Forum.

I nevertheless argue that the ng Connect Program could have delivered value ten years ago.

The program involves taking ideas from universities and customers and businesses and testing them in the facilities that Alcatel-Lucent has, worldwide, as well as in partners' facilities. "We use lab environments to validate and test ideas," Kuhn explains. "We do focus groups and conjoint analysis studies."

What's a conjoint analysis study? "Essentially, we ask potential customers a list of questions focused on, for example, their willingness to pay and then subject those answers to detailed statistical analysis."

Asking customers if they'd be willing to pay for something before you try to sell it to them? Brilliant!

Applications
But I stop laughing at the program once Kuhn explains the results so far (and the program is in its infancy).

One example is called "augmented reality." "Augmented reality is essentially cloud computing surrounding image recognition," Kuhn says. "Here's the simplest example: if you're in a movie rental store, you can use your mobile handset to view the trailer for a movie you're interested in, or download a coupon related to it. The network uses image recognition to determine what you're looking at and feeds relevant data to your mobile device."

Another is next generation music. "I have a playlist at home that's essentially like an Excel spreadsheet," says Kuhn. "There is a tremendous interest in rebuilding the community that's associated with an artist. We want to get back to that feeling you had when you had a record sleeve with information about the band, but from a digital perspective. Many artists are blogging about their experiences. It allows the artist to interact with fans and build brands."

Here's my advice to record labels: stop suing customers, students, and universities.

There's also an idea that came from Alcatel-Lucent's Bell Labs: a digital surgery suite. Kuhn says that a physician could use a connected tablet to consult with another physician anywhere in the world if they encountered something unexpected.

Finally, Kuhn mentions the automotive industry and this is the most interesting example because the other examples are ideas that have been talked about for as long as there's been an internet, but this one is new. Kuhn says that cars need firmware updates too, nowadays, and that installing the update requires scheduling a time and uploading the software in a garage. Car companies would prefer to deliver updates over the wireless internet. If they could do so securely, they could save millions of dollars each year.

The goal of the ng Connect Program is to improve time to market and delivery of revenue for applications in all industries. "My team has been working over the last few years on the changing user experience," says Kuhn. "We have conducted tons of consultations with customers and companies."

He adds that the automotive industry has worked with ISPs for some time, noting that GM's OnStar is Verizon Wireless' biggest customer.

It's an opportunity, but are the telcos ready?
Kuhn said that the ng Connect Program is different from what standards bodies are doing, but, I ask, won't you need a standard once you find a valuable application? Won't you need a standard to deliver a firmware update to a car or a surgical image to a hospital tablet?

"There are many standards organizations doing good work already," Kuhn replies. "But they're not going beyond the technical aspects; they're not looking at business models. We're creating a feedback loop with customers and finding out what applications [have a reasonable expectation of being adopted]."

It's a great idea. There are two types of great ideas: those that are brilliant and difficult to explain, and those that seem so obvious that you wonder why nobody thought of them before. Alcatel-Lucent's ng Connect Program falls into the latter category.

Coincidentally, doing this is part of the advice contained in the Telco 2.0 Manifesto, which is well worth reading. One sentence in particular stands out, the recommendation that telcos make the following change: "A shift to servicing universal business processes performed across many industries, rather than competing with services specific to verticals (e.g. finance, entertainment, IT services) that inevitably compete with entrenched suppliers."

The final sentence of the Manifesto is exactly what the telcos need and don't have. It asks telcos to "work with existing partners, and collaborate across the industry, to create the transaction networks needed to support these value-added and 2-sided market services."

The ng Connect Program will build valuable applications, but there's no reason to believe that the telcos will deliver them. I predict smaller and more nimble organizations, such as VARs, integrators, and local ISPs will be ahead of the telcos in delivering the fruit of these projects.

— End