Click here to close now.




















Welcome!

SDN Journal Authors: Pat Romanski, Wai Lam, Cloud Best Practices Network, Elizabeth White, Liz McMillan

Related Topics: Containers Expo Blog, Java IoT, Linux Containers, @CloudExpo, @BigDataExpo, SDN Journal

Containers Expo Blog: Article

Uber Taxis and New Business Models

In a world of NFV we cannot easily map the businesses & business models of today onto the possible business models of tomorrow

A recent post by John Wilmes on the TM Forum website caught my eye for drawing a parallel between the Uber car service business model and the telecom service provider business model as network functions virtualization (NFV) becomes a reality. Wilmes uses this metaphor to remind us of the potential value of dynamic pricing as a tool in carrier efforts to match supply to demand. He also cautions service providers to be careful how they sell the message of dynamic pricing to their customers. So far, so good.

However, this gave me pause: "NFV will let them [operators] create more of almost any part of their infrastructure on the fly, and turn it off when no longer needed, but that too comes at a price - one that is proportionately much higher than what Uber faces. While Uber needs only to make minimal investments in drivers who furnish their own cars, operators also have to buy the ‘cars' up front, or at least reserve them from infrastructure providers."

The message seems to be that customers may face a future of higher prices, supply shortages or both, if surge pricing takes over thanks to NFV. This rather surprised me for two reasons. First, taxis and buses are more efficient in their use of road and energy resources than cars are, even if we still like to drive our own cars sometimes. Similarly, MetraTech became actively involved in the European Telecommunications Standards Institute (ETSI) NFV program mainly because we believe that NFV would result in a dramatically more efficient deployment of network resources and efficient resource allocation should, overall, reduce costs. Services would now be deployed in a cloud-like fashion, making customers happy and providing service providers with new revenue streams. Secondly, my experience is that, despite the small commotion over Uber's surge pricing plans, those of us who use Uber recognize that the system has made it easier and cheaper to get a cab in some locations. According to the drivers I have spoken to, they're driving more and waiting less, so they're more productive. Sounds like a win-win to me.

Wilmes' Uber metaphor suggests we think of Uber, the company, as the service provider, and the car owner and drivers who are contracted to Uber as being the equivalent of network elements, providing transportation from location to location. We could recast the metaphor, and perhaps come to a different conclusion. The car owner and drivers are in fact the service providers, and Uber is an agency that links potential customers to service providers more efficiently. The drivers, in fact, may not own their vehicles, and for some, the optimal business model is to lease a vehicle and set up a maintenance contract with the leasing company, just like bus companies and airlines do.

Perhaps in an NFV-driven world there could be many service providers - both small and large companies - that operate geographically, similar to taxi drivers in the Uber model. The service providers lease the technology from other businesses, whose job is to invest in the infrastructure, build it and run it, selling space in the system to all-comers who can then repurpose the technology at will, according to changing end-customer demands. And where is the future equivalent of Uber in this scenario? We need to think of Uber, not so much as a service provider to end users, but as an agent - a service provider to the service providers who serve the end customers.

Since we are talking about agents, let's remember that as the Internet of Things evolves, agents will effectively be apps that serve both humans and machines. Now, there's a coincidence. What is Uber? It's actually an application that allows end users and service providers to connect. Uber, the company, makes money when people use their app, which represents an old and comfortingly familiar business model.

There is a pleasing symmetry here. Just as chunks of technology in an NFV-driven network can have transient lives in different roles, end users and their service providers will have transient relationships that will last just as long as they are needed. This uber-flexibility, not just of hardware, but of business relationships, will create a competitive market that should benefit customers greatly. On the other hand, perhaps service providers will have a tough time for a period, just as traditional taxi companies stumbled for a time, attempting to use regulation to preserve their old business models instead of embracing the new.

The fun of thinking of the future in this way is that when we try to connect the dots from the present to the future, we can easily come up with something of a tangle. In a world of NFV (and software-defined networking [SDN] too, of course) we cannot easily map the businesses and business models of today onto the possible business models of tomorrow. Whatever we dream up could be wrong. But the biggest mistake of all is to assume that things stay unchanged.

Wilmes follows up his gloomy prediction with this thought: "And the business and technical agility that they need to amortize those costs more quickly with dynamic pricing is also expensive to acquire and maintain."

Perhaps this is what underpins his gloom: keeping track of NFV is going to be difficult and expensive. I have good news for him. Billing systems that enable dynamic pricing across a web of complex business relationships are already here, and when NFV is widely deployed, those systems, including MetraNet will have the industrial power, precision and scalability to handle whatever financial transactions NFV can throw at us. None of this will be trivially easy, but NFV itself is not a trivial exercise. If it were, we would have done it years ago, just like we would've developed Uber back when we still had horse-drawn cabs - if only we'd also had giant data centers, ubiquitous mobile data connectivity, smartphones, journey planning algorithms, GPS and flexible billing and settlement.

More Stories By Esmeralda Swartz

Esmeralda Swartz is CMO of MetraTech, now part of Ericsson. She has spent 15 years as a marketing, product management, and business development technology executive bringing disruptive technologies and companies to market. Esmeralda is responsible for go-to-market strategy and execution, product marketing, product management, business development and partner programs. Prior to MetraTech, Esmeralda was co-founder, Vice President of Marketing and Business Development at Lightwolf Technologies, a big data management startup. She was previously co-founder and Senior Vice President of Marketing and Business Development of Soapstone Networks, a developer of OSS software, now part of Extreme Networks (Nasdaq:EXTR). At Avici Systems (Nasdaq:AVCI), Esmeralda was Vice President of Marketing for the networking pioneer from startup through its successful IPO. Early in her career, she was a Director at IDC, where she led the network consulting practice and worked with startup and leading software and hardware companies, and Wall Street clients on product and market strategies. Esmeralda holds a Bachelor of Science with a concentration in Marketing and International Business from Northeastern University.

You can view her other blogs at www.metratech.com/blog.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@CloudExpo Stories
SYS-CON Events announced today that DataClear Inc. will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. The DataClear ‘BlackBox’ is the only solution that moves your PC, browsing and data out of the United States and away from prying (and spying) eyes. Its solution automatically builds you a clean, on-demand, virus free, new virtual cloud based PC outside of the United States, and wipes it clean...
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome,” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Any Ops team trying to support a company in today’s cloud-connected world knows that a new way of thinking is required – one just as dramatic than the shift from Ops to DevOps. The diversity of modern operations requires teams to focus their impact on breadth vs. depth. In his session at DevOps Summit, Adam Serediuk, Director of Operations at xMatters, Inc., will discuss the strategic requirements of evolving from Ops to DevOps, and why modern Operations has begun leveraging the “NoOps” approa...
SYS-CON Events announced today that G2G3 will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based on a collective appreciation for user experience, design, and technology, G2G3 is uniquely qualified and motivated to redefine how organizations and people engage in an increasingly digital world.
This Enterprise Strategy Group lab validation report of the NEC Express5800/R320 server with Intel® Xeon® processor presents the benefits of 99.999% uptime NEC fault-tolerant servers that lower overall virtualized server total cost of ownership. This report also includes survey data on the significant costs associated with system outages impacting enterprise and web applications. Click Here to Download Report Now!
SYS-CON Events announced today that Micron Technology, Inc., a global leader in advanced semiconductor systems, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Micron’s broad portfolio of high-performance memory technologies – including DRAM, NAND and NOR Flash – is the basis for solid state drives, modules, multichip packages and other system solutions. Backed by more than 35 years of tech...
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies leverage disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advance...
SYS-CON Events announced today the Containers & Microservices Bootcamp, being held November 3-4, 2015, in conjunction with 17th Cloud Expo, @ThingsExpo, and @DevOpsSummit at the Santa Clara Convention Center in Santa Clara, CA. This is your chance to get started with the latest technology in the industry. Combined with real-world scenarios and use cases, the Containers and Microservices Bootcamp, led by Janakiram MSV, a Microsoft Regional Director, will include presentations as well as hands-on...
Cloud and datacenter migration innovator AppZero has joined the Microsoft Enterprise Cloud Alliance Program. AppZero is a fast, flexible way to move Windows Server applications from any source machine – physical or virtual – to any destination server, in any cloud or datacenter, using its patented container technology. AppZero’s container is also called a Virtual Application Appliance (VAA). To facilitate Microsoft Azure onboarding, AppZero has two purpose-built offerings: AppZero SP for Azure,...
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Organizations from small to large are increasingly adopting cloud solutions to deliver essential business services at a much lower cost. According to cyber security experts, the frequency and severity of cyber-attacks are on the rise, causing alarm to businesses and customers across a variety of industries. To defend against exploits like these, a company must adopt a comprehensive security defense strategy that is designed for their business. In 2015, organizations such as United Airlines, Sony...
Red Hat is investing in Tesora, the number one contributor to OpenStack Trove Database as a Service (DBaaS) also ranked among the top 20 companies contributing to OpenStack overall. Tesora, the company bringing OpenStack Trove Database as a Service (DBaaS) to the enterprise, has announced that Red Hat and others have invested in the company as a part of Tesora's latest funding round. The funding agreement expands on the ongoing collaboration between Tesora and Red Hat, which dates back to Febr...
IBM’s Blue Box Cloud, powered by OpenStack, is now available in any of IBM’s globally integrated cloud data centers running SoftLayer infrastructure. Less than 90 days after its acquisition of Blue Box, IBM has integrated its Blue Box Cloud Dedicated private-cloud-as-a-service into its broader portfolio of OpenStack® based solutions. The announcement, made today at the OpenStack Silicon Valley event, further highlights IBM’s continued support to deliver OpenStack solutions across all cloud depl...
With the proliferation of connected devices underpinning new Internet of Things systems, Brandon Schulz, Director of Luxoft IoT – Retail, will be looking at the transformation of the retail customer experience in brick and mortar stores in his session at @ThingsExpo. Questions he will address include: Will beacons drop to the wayside like QR codes, or be a proximity-based profit driver? How will the customer experience change in stores of all types when everything can be instrumented and a...
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes ab...
Culture is the most important ingredient of DevOps. The challenge for most organizations is defining and communicating a vision of beneficial DevOps culture for their organizations, and then facilitating the changes needed to achieve that. Often this comes down to an ability to provide true leadership. As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership ab...
WSM International, the pioneer and leader in server migration services, has announced an agreement with WHOA.com, a leader in providing secure public, private and hybrid cloud computing services. Under terms of the agreement, WSM will provide migration services to WHOA.com customers to relocate some or all of their applications, digital assets, and other computing workloads to WHOA.com enterprise-class, secure cloud infrastructure. The migration services include detailed evaluation and planning...
In today's digital world, change is the one constant. Disruptive innovations like cloud, mobility, social media, and the Internet of Things have reshaped the market and set new standards in customer expectations. To remain competitive, businesses must tap the potential of emerging technologies and markets through the rapid release of new products and services. However, the rigid and siloed structures of traditional IT platforms and processes are slowing them down – resulting in lengthy delivery ...
The Internet of Things (IoT) is about the digitization of physical assets including sensors, devices, machines, gateways, and the network. It creates possibilities for significant value creation and new revenue generating business models via data democratization and ubiquitous analytics across IoT networks. The explosion of data in all forms in IoT requires a more robust and broader lens in order to enable smarter timely actions and better outcomes. Business operations become the key driver of I...
U.S. companies are desperately trying to recruit and hire skilled software engineers and developers, but there is simply not enough quality talent to go around. Tiempo Development is a nearshore software development company. Our headquarters are in AZ, but we are a pioneer and leader in outsourcing to Mexico, based on our three software development centers there. We have a proven process and we are experts at providing our customers with powerful solutions. We transform ideas into reality.