Internet Changes Everything: April 2006 Archives

April 25, 2006

Can There Be Too Much SOA?

April 24, 2006 10:42AM

Web services and SOA aren't the same thing; Web services is one way to get to the goals of SOA. Launched by the Worldwide Web Consortium (W3C), Web services is a set of standards that combine to create the path to SOA, a path that would be standardized enough for all to follow. With Web services, SOA solutions that would likely be as diverse as SOA definitions could converge on a single dazzling path

There's no question that SOA has what Wall Street calls "Mo," meaning "momentum." It's in the trade press, and the business press, and most important in the planning cross-hairs of a lot of CIOs. SOA, which stands for "Service-Oriented Architecture" is just plain hot, but it's also facing a kind of crisis. It's a crisis we've seen before in networking, but still one that may be hard to overcome, and if SOA can't overcome it, the concept may be marginalized.

What is SOA anyway? "Service Oriented" sounds a lot like a marketing slogan for a car wash or an airline. The basic notion of SOA, as it was originally devised, was that applications could be structured as a series of "services," or pieces of functionality, that would then be assembled as needed. Visualize a graphical user interface with a piece of CRM (customer resource management), a dab of Excel, and maybe a shot of data mining all mixed in.

Or visualize a server farm with a piece of functionality here, another there. A transaction can be a piece of CRM, or maybe materials requirements planning, or both. Publish a service, subscribe to it and others to assemble a capability, a business solution. Maybe you want to think of it as a kind of bus, a universal interface or a highway that information flows on. Drive on at Memphis and go all the way to sunrise in LA. Push a data quantity in and spread it as needed through the business.

All That and More

So which one is SOA? All of them. In fact, more than that, so vendors say. The popularity of the concept of SOA, combined with the wonderful vagueness of the term, lends itself to over-promotion. "Service" is a pretty generic term, after all. There's no shortage of jumpers onto the SOA bandwagon, even if their claim to SOA is as vague as the claims you get out of your average dating service. It's very possible that we've never had such a business commitment to a concept that people so broadly misunderstand. But it's not this semantic SOA purgatory that we're fearing; it's the more tangible problem that could arise in what might be the poster child of SOA implementation: Web services.

Standardization is a funny thing. Achieving the goal of a single approach often requires serving many masters. Every vendor with a stake in an issue has a stake in standards that impact that issue, and these vendors populate the standards bodies with well-funded contributions. There's an old saying that a "camel is a horse designed by a committee." Get the picture?

Web Services and SOAP

Web services, at the basic level, is a way for a client system to run a software module on a server and pass it a message that represents the data that's supposed to be processed. The module returns a message that represents the result. The whole process has been around for decades, and is based on the idea of a "remote procedure call," a way for one computer to run something on another. In Web services, this is done using a protocol called the Simple Object Access Protocol (SOAP).

SOAP is simplicity itself. You send a "service" (the remote module) a message that it processes, and it returns the reply. SOAP software generates the message at the client side, and at the server side activates the software "service" and passes it the message. How easy can you get? Not only that, the format of the message is agreed between client and server and published in an XML schema.

But then standards gurus started to think: How do we address the "service" or the user? Who is this person who's accessing the "service"? Are they allowed to? How about network reliability? Suppose a message gets lost? If we go to the trouble of authenticating a user, should we be able to vouch for that user with other services that need identity assurance? How can we tell if there's enough processing power to perform the service, or where that power might be?

In response to these issues, we've added features, headers, standards for both services and users. All Web services standards start with the prefix "WS-," and we've "WSed" ourselves into a fair flood of new capabilities. It's not that they aren't useful, even necessary. It's just that there are so darn many of them.

Standards Proliferation

Andrew Tannenbaum, an author from "my generation" (which is to say a kinder, gentler time) said that "the wonderful thing about standards is that there are so many to choose from." There's a simple moral here; if you have a bunch of choices of how to implement something that everyone has to agree on a single way to implement, you may as well have not bothered cataloging choices in the first place.

And that's what is happening with Web services, and thus with SOA.

Thirty years ago, the first international data networking standard, X.25, was launched. It was formally debated by international standards-writers, molded and shaped, changed and debated, and eventually settled ... sort of. Many things in X.25 were defined, but many were left to "implementation decisions." Two X.25 devices from two different vendors had about as much chance of going together and working as two builders in the proverbial Tower of Babel, each speaking different languages.

Officials at one health care company told me that they'd counted 71 different Web services implementations, combining different software pieces and standards from different vendors, and that none of them were fully interoperable. Assume that your company picks one, after earnest research. Your supply chain and distribution chain partners follow the process. There are about 14 chances in a thousand that a partner will select your approach. Two partners? 196 chances in a million. Three? Try 2,744 chances in a billion. Get to four and you're about the same range as two different people having the same DNA.

The other problem is that the odds are getting longer, independent of partner count, because the process is adding more and more standards to Web services. Even if there were only a couple of different ways to implement a single new standard, it would double the odds against conformance of everyone to a common interpretation of the total standards set for Web services. Every Web service standard probably exposes a half-dozen implementation interpretations, and many of these are seen as preferring one vendor or another, and each of these preferred vendors is sure to pick their favorite.

IBM, Microsoft, and other companies have recognized the risk of SOA/Web services anarchy, and attempted to create a kind of minimum subset called "WS-Star" (WS-*), a framework of Web services that's supposed to interoperate. Of course, this is viewed by other vendors as a sinister conspiracy to control the Web services market. Not that it would matter; there are plenty of interpretations of even this standard subset of Web services.

Repeating Mistakes of the Past

Those who forget history are condemned to relive it, so they say. The X.25 problems of the past were solved by coercion. Telenet and Tymnet -- two packet data network giants long-forgotten by most -- instituted a program of certification. Equipment vendors could say they were X.25-compatible till they were hoarse, but until they were "Telenet-certified" (or Tymnet, or both), they were barred from connection to the key networks of the time. So maybe we'll have to create certification authorities for Web services to save the universality of SOA.

Who certifies, though? Network operators, including the collection of partners we call "the Internet," simply carry Web services. It's an end-to-end concept, user to user. It may be that a user will end up having to provide the solution for the entire marketplace.

Open Web services -- open SOA -- is like the old concept of electronic data interchange (EDI). Trading partners have, for decades, agreed on formats to exchange commercial transactions for retail orders, shipping and payment.

There's an SOA effort to address EDI, and EDI was standardized by a few key retailers (General Motors, WalMart, etc.) who cut through the debate and told partners to conform or stop doing business.

"WalMart Certified"? In SOA, that may be where we're headed.

April 25, 2006 at 09:41 AM in Web/Tech | Permalink | Top of page | Blog Home

April 23, 2006

HP has spent a lot of money in this area - its CTO Jason Roualt tells us why.

Turning up the heat on identity management
http://www.techworld.com/features/index.cfm?featureID=2453&printerfriendly=1

Bryan Betts, Techworld April 24, 06

"Over 80 percent of authentication is still username and password - but there has to be change, because regulatory bodies are mandating it," says Jason Roualt, the chief technology officer (CTO) for HP's identity management group.

And that change is coming, as banks all over the world bring in two-factor authentication for their online customers, and as the US Federal Deposit Insurance Corporation mandates strong authentication for online banking by the end of this year: "If the banks implement that, it will touch a large proportion of the population," Roualt says.

"Strong authentication will be where things move to, but the act of authenticating involves user action, and people don't like change," he adds. "What form it will take is still up for debate - I think it will be something ubiquitous, such as a mobile phone."

HP's identity management group is one of its more recent creations. Selling its products under the OpenView Select brand, it's the result of several acquisitions that the company has made in recent years, according to Roualt.

"We identified identity management as a key technology to get into," he says. "We acquired access management from Baltimore, also TruLogica for identity provisioning, that became our Select Identity product. We OEM'd Trustgenix for federated identity and have now acquired them too, as Select Federation."

Automation and compliance
Roualt says that the business drivers behind identity management are the same across all industries, for example cost reduction via automating processes such as creating new accounts, deleting old ones, and password resets - plus a new one, namely regulatory compliance.

"A major driver for business is risk mitigation, and proving who had access to what at a particular time. You need to have process controls in place to satisfy the auditors. Without automation it takes IT managers an inordinate time to generate lists of who has access to what.

"The technology drivers are the ability to provide ease of use and effective change management, as organisational changes occur and the IT infrastructure changes, for example," he adds. "Identity needs to adapt to those changes in a way that doesn't require administrative intervention, so a line of business person could use them."

HP's interest is a result of the synergy between it sees etween identity management and its existing network and systems management framework, OpenView.

"We bring a lot of automation," says Roualt. "You might want a physical approval process, but there's still a lot you can automate, such as accounts for a new hire. We're connected into all the back-end systems, we know where the new user is and who they report to, and we know the business policies, so we can arrange access and accounts from day one.

"You can also compare your actions with business policy and remediate them if they're wrong. And when provisioning new servers, it's important to specify access control policy at the same time."

Enter the Federation
Roualt says that two of the most important developments in this whole area will be federated identity - HP is a member of the Liberty Alliance - and service-oriented architectures, or SOA.

"From an SOA point of view, identity will be exposed as services that can be consumed or requested. You are going to see identity management pushed down from the application level into the infrastructure - we think we can effect that change," he explains.

"It will be used and managed through network access control devices and also down to the servers and storage. It could go down to the chips on the motherboard. Mainly we're talking about user identity now, but it can be the identity of other services and so on.

"From a federation standpoint, the whole idea is that your identity is owned by a number of vested interests, such as your employer, your health company, and the organisation you're dealing with needs bits of those for the transaction. Using Liberty they can discover where that information resides and pull it in as needed, dependent on your privacy settings.

"It uses a discovery mechanism, it goes back to the identity provider and asks 'where can I get this information?' and the provider issues tokens which provide the reference and also the authentication to get that information."

That means you don't need to give all your personal or business information to every organisation you deal with. Instead, it goes to trusted third parties who can then say yes, you are who you say you are, and you indeed licenced to drive, set up direct debits, or whatever.

At liberty to choose
"Liberty wanted the consumer to be able to choose their identity provider, not only be offered one," Roualt says. "Right now, federated identity is more of a mesh, but I think it will work out to be fewer identity providers, such as financial services, credit unions, government bodies."

And if you thought federated identity was just a buzzword, think again: the protocols, such as the XML-based security assertion markup language SAML from OASIS, the Liberty identity federation framework (ID-FF), and the IBM and Microsoft-led web services federation language are already in place, with identity tools such as HP's Select Federation agnostically bridging between them as needed.

Roualt estimates that there will be two billion federated identities issued this year - not least because Liberty and OASIS member Nokia is shipping phones that support SAML and ID-FF.

"The technology is the easy part, it's the business processes that are the challenge - issues of trust, liability and so on," he continues. "Those issues have traditionally been dealt with by lawyers and contracts, but that's a process that doesn't scale well. People have been doing EDI for years though, so many of them are just going in and adapting those existing relationships."
This article was printed from Techworld : www.techworld.com The UK's infrastructure & network knowledge centre © 2006 : All rights reserved

April 23, 2006 at 10:39 PM in Financial Services | Permalink | Top of page | Blog Home

How Europe's banks can profit from loyal customers

The McKinsey Quarterly: How Europe's banks can profit from loyal customers

A new approach to identifying these individuals is the key.

Marc Beaujean, Vincent Cremers, and Francisco Pedro Goncalves Pereira

Web exclusive, November 2005

Europe's retail banks are missing out on what amounts to a sizable "loyalty bonus," according to McKinsey research. We examined the banking markets in Belgium, Germany, and Italy and found that loyal customers typically generate, over the life of their relationship with an institution, 30 to 70 percent more value than run-of-the-mill clients do. Loyal customers not only buy more products than their counterparts but also tolerate higher banking charges.

In our experience, most of the region's banks fail to identify and nurture these important customers, relying instead on segmentation models that are ineffective and even counterproductive. In fact, we believe that such miscues may be contributing to a growing sense of disenchantment among banking customers across the region.

Our research emphasizes what marketers in other retail industries already know: loyal customers—those who will recommend a bank to friends and family, feel that their expectations have been exceeded, and will without hesitation select the same bank to make a fresh transaction1—are more profitable. In practice, the mind-set of loyal customers is such that they will stick with a bank that treats them well and provides good value over the long term—even if it doesn't offer the best deal for every transaction. One bank we studied is able to charge its most loyal customers a premium of 20 to 30 basis points on mortgages, for example.

Exhibit 1, based on an analysis of the profiles and saving patterns of about 1,000 people in each country, demonstrates how greater loyalty leads to higher wallet share and reduced churn. High-potential customers,2 acquired at age 30 and remaining loyal throughout their active lifetimes, are worth 30 to 70 percent more than the high-potential but nonloyal ones, whose value to the bank gradually erodes or who eventually leave the bank altogether. These loyal individuals buy, on average, 40 percent more products than their less enthusiastic counterparts do (2.8 to 1.7), although in some countries the difference is far greater. By age 55, they make a direct contribution to the bank's bottom line of €548 a year, on average, compared with €183 a year for customers from the lukewarm majority.

ex 1

Few European banks currently segment their customers by loyalty; most institutions rely only on factors such as age, stage in the life cycle (for instance, student, married, or retired), and other socioeconomic variables. This failure to track loyalty is, in fact, doubly damaging. Our experience suggests that in addition to missing the opportunity to target the most profitable customers, banks selling new products to less loyal ones (say, as part of an indiscriminate marketing campaign) risk alienating them, since they automatically assume that what's being offered is not in their best interest. Such efforts could ultimately drive customers away.

Banks might supplement existing customer data by establishing an index, or matrix, that specifically tracks loyalty. Every customer can then be placed in a zone by loyalty (anger, distrust, passive loyalty, active loyalty, and advocacy, for example) and by share of wallet (Exhibit 2).

ex 2

An analysis of the answers to four or five simple questions, posed through the bank's existing channels, can determine an individual's position in the matrix.3 Once a bank segments its customers by the nature of their relationship, it can tailor actions to specific clusters, take steps to move individuals up the loyalty curve, and aggressively market new products to them.

The success of a major Benelux institution using this type of relationship matrix as well as our preliminary work with other banks suggest the benefits of such an approach. To exploit this opportunity, however, a bank must take three factors into account.

* For new sales, a bank's frontline staff should target only those customers with whom it has established an intimate and trusting relationship.
* A bank must be proactive in developing such intimacy, in particular by focusing on high-potential customers who have not approached the bank in the past 6 to 12 months. Sales efforts tend to be more efficient when the sales representative knows the customer.
* A strong effort should be made by frontline staff to handle "moments of truth"—highly emotional interactions (positive and negative) that endure in the customer's memory over time and affect loyalty (Exhibit 3).4 The optimal management of such events means ensuring that salespeople recognize positive events as opportunities to cross-sell and respond appropriately in times of crisis (when a card gets swallowed by an ATM, for instance). Our experience suggests that banks can significantly improve their handling of moments of truth.

ex 3

Segmenting customers according to loyalty means going beyond the traditional approaches that most European banks use to devise effective commercial strategies. The process takes time—12 to 18 months to transform a full branch network, we estimate—as well as new frontline skills, but early findings suggest that these techniques are effective in extracting more value from existing customers.
About the Authors

Marc Beaujean is a principal and Vincent Cremers is an associate principal in McKinsey's Brussels office, and Francisco Goncalves Pereira is an associate principal in the Lisbon office.
Notes

1 Such a definition, while simple, goes well beyond customer satisfaction, the traditional proxy for loyalty used by many banks.

2 Those who are expected to become affluent by the age of 55.

3 Questions should be linked to customer behavior ("If the bank makes a mistake, would you leave the bank?") and not their perspectives ("Are you happy with the bank?"). Likewise, questions requiring either a "yes" or "no" answer are preferable to open- ended ones.

4 Marukel Nunez and Corey M. Yulinsky, "Better customer service in banks," The McKinsey Quarterly, 2005 Number 1, p. 30.

April 23, 2006 at 11:17 AM in Financial Services | Permalink | Top of page | Blog Home

April 22, 2006

Paid Content Growth: Sky's the Limit?

E-Commerce News: Must Read : Paid Content Growth: Sky's the Limit?

By Keith Regan
E-Commerce Times
04/20/06 5:00 AM PT

"Last year saw the type of growth that solidified the Web as an entertainment destination for U.S. consumers," said Pam Horan, Vice President of Marketing & Membership for the OPA. "Digital music led the entertainment category and, with the availability of new devices and video content, we expect this momentum to continue."

For years, one of the biggest struggles many Internet Get Linux or Windows Managed Hosting Services with Industry Leading Fanatical Support. companies faced was figuring out how to convince Web users to turn over their hard-earned money for content -- content that many believed was freely available elsewhere.

Whether it was music -- paid downloads versus file-swapping -- classified-style sales on Craigslist and other free sites versus paid eBay (Nasdaq: EBAY) Latest News about eBay listings, or premium news content, Web users long seemed committed to the notion that the Internet was meant to be a free-for-all -- literally.
As the Net Turns

That has clearly changed. Last year saw spending on paid Web content in the U.S. alone top $2 billion for the first time ever, a 15 percent increase over 2004. Many are predicting a long horizon of continued growth as the way people use the Internet to get news, information and entertainment continues to evolve. The evolution of mobile content may further ignite an explosion in content-related spending.

That paid content is expanding rapidly is no surprise, with the rising tide of online digital music alone -- best exemplified by Apple's (Nasdaq: AAPL) Latest News about Apple iTunes Music Store -- able to lift many boats in the paid content marketplace.

What's significant, however, is that paid content sales are up almost across the board. According to a report from the Online Publishers Association (OPA), online games, personal growth -- diet sites, for instance -- and paid research such as stock reports all saw double-digit growth last year.

That broad-based expansion is what has many analysts predicting big things for the market in the near and distant future.

Even content owners and providers well outside the realm of entertainment saw a strong year and will see more ahead. "Multiple content categories, including Personals, Business and Research, saw significant revenue gains and contributed to the record high revenues," Horan said.
Hey, Big Spender

Last year saw another important milestone reached, according to the OPA: The average online consumer spent more than $100 during 2005 on paid content.

While paid content still pales in comparison to other forms of e-commerce FedEx e-Commerce Solutions for Online Retailers., that $100 level is seen as a key mark because in many cases it is made up largely of micro-purchases, such as 99-cent music downloads or modest monthly fees for subscription services.

"All signs point to very strong and steady growth for paid online content," said Horan. "In each of the last five years, we've seen record revenues and record numbers of consumers paying for content. With only 12 percent of the total Web population purchasing online content, enormous opportunity for growth continues to exist."

The establishment of micropayments is seen as a key development in the online payment world. Even though the OPA says subscriptions remain the dominant online content pricing model, it said revenue from single payments jumped 61 percent last year and now make up more than 20 percent of all online paid content.

Such small payments have long been seen as a stumbling block in propagating more paid content use by consumers. That people have begun to get comfortable using credit or debit cards, PayPal or other online payment services to buy music downloads or play a round of an online video game bodes well for the future, especially as more content is available through mobile handsets, said In-Stat analyst Neil Strother.

Other barriers remain, Strother said, including still weak demand seen when consumers are asked about watching video and other multimedia content on their mobile phones, but having a micropayment system in place will help the content industry pounce when consumers are ready.
What's News?

One vexing paid content riddle has been in the news area, where newspapers have tried a variety of approaches to get consumers to pay for content with mostly mixed results. Spending on the general news category was down by 11 percent in 2005, the second straight year of decline.

Analysts attribute the drop to the continued increase in choice for consumers, with thousands of blogs and RSS news feeds now competing with paid news sites.

Still, some publishers have not given up on the pay-to-read model. The New York Times, which has long made its content available for free, last year began to offer a premium package with access to the work of columnists and free archives searches for about $50 a year.

Others, however, have moved back to offering content for free after attempting to charge for it.

Fixing that problem may take a backseat, however, as content sites seek to capture the coming video wave. According to the OPA, online video viewing "has become commonplace" in the past year.

"While humorous videos seem to get the buzz, it's hard news that is most frequently watched by Web users," Horan noted. The OPA estimates that nearly a quarter of Web users watch online video at least once a week and nearly half do so monthly.

Meanwhile, many Web businesses are seeking to strike the right balance between selling content and leveraging content to drive traffic and advertising revenue.

For instance, some four years ago, Yahoo (Nasdaq: YHOO) Latest News about Yahoo made a major gamble on paid content, but kept most of its portal free, a move that has allowed it to benefit from the recovery in online advertising, Forrester Research analyst Charlene Li told the E-Commerce Times.

"Having a balanced approach to content lets a Web company target a range of audiences," Li said. "Different people are willing to pay for different things."

April 22, 2006 at 03:27 AM in eCommerce | Permalink | Top of page | Blog Home

April 21, 2006

SOA Technology Enters the Mainstream

SOA Technology Enters the Mainstream - Integration -

April 18, 2006 10:34AM

Although SOA certainly has crossed the chasm, there is still work to be done before the technology settles into a steady-state maturity. For example, respondents in a recent survey were divided on what constituted the best strategy for deploying SOA.

Every new technology goes through an early shakeout stage before it crosses the chasm, where it is adopted by mainstream organizations. It's safe to say that service-oriented architectures (SOA) and the services-based approach to information systems have crossed the chasm and are ready for prime time.

According to a recent survey by Research Concepts LLC of Berlin, MA, SOA has already been deployed at more than 50 percent of their organizations. Thirty-three percent have implemented at least one project, and another 20 percent are in the process of implementing their first, while 30 percent are planning an SOA implementation. Only a small minority, 16 percent, have no SOA in their plans. That puts SOA squarely in the I.T. mainstream.

Companies are turning to SOA, according to the survey, for the numerous benefits it delivers for both I.T. and the business itself, starting with greater business process flexibility. Other benefits include greater adaptability of applications, shorter time to deploy new applications, and increased reuse of application components.

Reuse has the potential to deliver substantial hard-dollar savings over time, while faster application deployment enables the organization to quickly seize opportunities. More than half the respondents (58 percent) cited increased customer satisfaction as a primary driver of SOA.

FirstMerit Corp, a financial service firm based in Akron, OH, initially turned to SOA to revamp its Internet banking channel. The services approach allowed it to quickly make its hard-to-use mainframe functionality accessible to customers through the Internet and the Web, explains Larry Shoff, executive vice president and CTO.

The ease with which the company could do that, however, opened up an entirely new opportunity for the company: small-business Internet banking. "We could take what we had done for Internet banking and quickly turn it into a new banking product for small business," says Shoff. That is the power of the SOA approach.

Although SOA certainly has crossed the chasm, there is still work to be done before the technology settles into a steady-state maturity. For example, survey respondents were divided on what constituted the best strategy for deploying SOA. Although 26 percent opted to mix and match SOA products from multiple vendors -- the best-of-breed approach -- almost an equal amount (23 percent) are turning to a single provider for an integrated solution. Even more (29 percent) use a combination of approaches.

FirstMerit, for example, relied primarily on a single vendor, DataDirect, which provided the tools and middleware to turn mainframe applications, primarily CICS functions, into Web services that could be assembled into Microsoft .NET applications by the company's developers. The results were standards-based Web services using WSDL and SOAP.

Despite the success of many companies with SOA, some challenges remain. The biggest of these is security, cited by 66 percent of survey respondents. Other challenges cited by respondents included performance (59 percent), compliance and governance (58 percent), and enforcement of business rules (53 percent).

Standards are critical to the success of SOA. SOA works because it provides a standardized way to access functionality and exchange data that otherwise reside within incompatible systems.

Although key SOA standards, such as SOAP, WSDL, XML, and UDDI, are in place, more are needed. The vast majority of survey respondents (93 percent) felt that the industry needs to speed up the development of standards. Not surprisingly, then, where SOA projects failed to meet expectations, just over half the respondents (51 percent) attributed the problem to insufficient standards.

The best practices for SOA success, according to industry analysts, are straightforward. They include the need to define the business value at the outset, identify enterprise-wide reusable services, focus on the architecture, and plan for security and governance from the start.

Even though more needs to be done, SOA clearly is ready for enterprise prime time, according to the survey respondents. Already large, leading financial services firms have deployed SOA applications that securely handle a million or more transactions a day with the kind of performance and reliability customers expect. Pretty soon everyone will be doing that.

April 21, 2006 at 07:37 PM in Web/Tech | Permalink | Top of page | Blog Home

April 13, 2006

Google Pins Hopes on Calendar

For all of the hoopla surrounding Google's products, the company sure has struggled to generate smash hits outside of Web search. Sure, Google's maps, with their eye-catching satellite imagery, have been a scorching success. But many other ventures, from shopping site Froogle to social networking hub Orkut to Google Talk instant-messaging client, have generated little enthusiasm.

The company hopes to better the record on Apr. 13 when it launches Google Calendar -- a free, Internet-based calendar that helps users keep track of important dates, events, and information.

Early indications are promising. Several analysts who have tried the product believe Google (GOOG) may be on to something. Google Calendar differs from most other online calendar services because it lets users publish and share the information, as well as overlay events from other calendars.

SYNCED SCHEDULES. Google Calendar users, for example, could sync their own calendars with those of a spouse and children to more efficiently plan a summer vacation. "Our goal is to reduce the burden of running a calendar," says Google Product Manager Carl Sjogreen.

That may be just the start. Google's goal is to make this not just an end product, but rather a platform for organizing events and sharing information, analysts say. "Google has rethought the entire role of a calendar," says Forrester Research analyst Charlene Li. "It recognizes you have several calendars to manage and that you have to interact between them."

Calendar could thrust Google into other new areas, including territory occupied by the likes of Evite, owned by Barry Diller's IAC/InterActiveCorp (IACI). Google Calendar lets users plan events, including sending out invitations and reminders, keeping track of RSVPs, and interacting with potential guests.

ADS FOR EVENTS. Although Google has not announced how it plans to make money from the calendar offering, event planning could provide prime real estate for advertisers. A local costume store could advertise in conjunction with an invitation for a Halloween party, for instance. "Events are highly monetizable," says Li.

Google will initially integrate its beta calendar product with its two-year-old e-mail service, Gmail (see BW Online, 10/26/05, "Gmail: Just a Bit Too Quirky"). The fledgling e-mail service could use the shot in the arm that may accompany added features. Despite a sleek interface and free, jumbo-size accounts, analysts estimate that Gmail has attracted about 10 million users. Not bad, but it's less than 10% of the amount of e-mail users at Yahoo or Microsoft's Hotmail, say the analysts.

Elgin is a correspondent in BusinessWeek's Silicon Valley bureau

April 13, 2006 at 12:55 AM in Portals | Permalink | Top of page | Blog Home

April 12, 2006

OECD Broadband Statistics, December 2005

OECD Broadband Statistics, December 2005

The number of broadband subscriptions throughout the OECD continued to increase during 2005 from 136 million in June 2005 to 158 million by December 2005. Broadband penetration growth in the OECD held steady at 15% in the second half of the year reaching 13.6 subscribers per 100 inhabitants in December.

Main highlights from the second half of 2005 are:

In December 2005, four countries (Iceland, Korea, the Netherlands and Denmark) led the OECD in broadband penetration, each with more than 25 subscribers per 100 inhabitants.
Iceland now leads the OECD with a broadband penetration rate of 26.7 subscribers per 100 inhabitants.
Korea’s broadband market is advancing to the next stage of development where existing subscribers switch platforms
for increased bandwidth. In Korea, fibre-based broadband connections
grew 52.4% during 2005. This switchover effect is evident by the net
loss of DSL (-3.3%) and cable (-1.7%) subscribers during the year.
The strongest per-capita subscriber growth came
from Iceland, Finland, Norway, the Netherlands and Australia. Each
country added more than 6 subscribers per 100 inhabitants during 2005.
Japan leads the OECD in fibre-to-the-premises (FTTP) with 4.6 million fibre subscribers at the end of 2005. Fibre subscribers alone in Japan outnumber total broadband subscribers in 21 of the 30 OECD countries.
DSL is still the leading platform in 28 OECD countries. Cable subscribers outnumber DSL in Canada and the United States.
The United States has the largest total number of broadband subscribers in the OECD at 49 million. US broadband subscribers represent 31% of all broadband connections in the OECD.
Canada leads the G7 group of industrialized countries in broadband penetration
The breakdown of broadband technologies in December 2005 is as follows:

     o DSL: 62%

     o Cable modem: 31%

     o Other technologies (e.g. satellite, fibre and fixed wireless) : 7%

Last updated on 11 April 2006

Data 2005

Broadband subscribers per 100 inhabitants, by technology, December 2005

	DSL	Cable	Other	Total	Rank	Total Subscribers
Iceland	25.9	0.1	0.6	26.7	1	78 017
Korea	13.6	8.3	3.4	25.4	2	12 190 711
Netherlands	15.7	9.6	0.0	25.3	3	4 113 573
Denmark	15.3	7.2	2.5	25.0	4	1 350 415
Switzerland	14.7	8.0	0.4	23.1	5	1 725 446
Finland	19.5	2.8	0.1	22.5	6	1 174 200
Norway*	17.8	2.9	1.2	21.9	7	1 006 766
Canada	10.1	10.8	0.1	21.9	8	6 706 699
Sweden*	13.3	3.4	3.6	20.3	9	1 830 000
Belgium	11.3	7.0	0.0	18.3	10	1 902 739
Japan	11.3	2.5	3.8	17.6	11	22 515 091
United States	6.5	9.0	1.3	16.8	12	49 391 060
United Kingdom	11.5	4.4	0.0	15.9	13	9 539 900
France	14.3	0.9	0.0	15.2	14	9 465 600
Luxembourg	13.3	1.6	0.0	14.9	15	67 357
Austria*	8.1	5.8	0.2	14.1	16	1 155 000
Australia	10.8	2.6	0.4	13.8	17	2 785 000
Germany	12.6	0.3	0.1	13.0	18	10 706 600
Italy	11.3	0.0	0.6	11.9	19	6 896 696
Spain	9.2	2.5	0.1	11.7	20	4 994 274
Portugal	6.6	4.9	0.0	11.5	21	1 212 034
New Zealand	7.3	0.4	0.4	8.1	22	331 000
Ireland	5.0	0.6	1.1	6.7	23	270 700
Czech Republic**	3.0	1.4	2.0	6.4	24	650 000
Hungary	4.1	2.1	0.1	6.3	25	639 505
Slovak Republic	2.0	0.4	0.2	2.5	26	133 900
Poland	1.6	0.7	0.1	2.4	27	897 659
Mexico	1.5	0.6	0.0	2.2	28	2 304 520
Turkey	2.1	0.0	0.0	2.1	29	1 530 000
Greece	1.4	0.0	0.0	1.4	30	155 418
OECD	8.4	4.2	1.0	13.6		157 719 880

Notes:

* Data are preliminary estimates

** The OECD statistics for the "Other Broadband"
category of the Czech Republic include a large number of fixed wireless
broadband connections provided over mobile networks. Broadband
subscriptions over 3G networks are not included for other countries but
an exception was made for the Czech Republic because the connections
make use of "fixed" equipment in a home and offer speeds greater than
256 kbit/s to individual users. The Czech market is particular due to
the high number of these wireless broadband connections as a percentage
of total connectivity. It is important to note that there is continuing
debate in international circles as to whether this type of wireless
connection (numbering 188 000 in CZ) should be included in
international broadband comparisons.

Time Series

Broadband subscribers per 100 inhabitants, 2001-2005

	2001	2002	2003	2004	2005
Australia	0.9	1.8	3.5	7.7	13.8
Austria	3.6	5.6	7.6	10.1	14.1
Belgium	4.4	8.7	11.7	15.5	18.3
Canada	8.9	12.1	15.1	17.6	21.0
Czech Republic	0.1	0.2	0.5	2.5	6.4
Denmark	4.4	8.2	13.0	19.0	25.0
Finland	1.3	5.5	9.5	14.9	22.5
France	1.0	2.8	5.9	10.5	15.2
Germany	2.3	4.1	5.6	8.4	13.0
Greece	0	0	0.1	0.4	1.4
Hungary	0.3	0.6	2.0	3.6	6.3
Iceland	3.7	8.4	14.3	18.2	26.7
Ireland	0	0.3	0.8	3.3	6.7
Italy	0.7	1.7	4.1	8.1	11.9
Japan	2.2	6.1	10.7	15.0	17.6
Korea	17.2	21.8	24.2	24.8	25.4
Luxembourg	0.3	1.5	3.5	9.8	14.9
Mexico	0.1	0.3	0.4	0.9	2.2
Netherlands	3.8	7.0	11.8	19.0	25.3
New Zealand	0.7	1.6	2.6	4.7	8.1
Norway	1.9	4.2	8.0	14.8	21.9
Poland	0.1	0.3	0.8	2.1	2.4
Portugal	1.0	2.5	4.8	8.2	11.5
Slovak Republic	0	0	0.3	1.0	2.5
Spain	1.2	3.0	5.4	8.1	11.7
Sweden	5.4	8.1	10.7	14.5	20.3
Switzerland	2.0	5.6	10.1	17.5	23.1
Turkey	0	0	0.3	0.7	2.1
United Kingdom	0.6	2.3	5.4	10.5	15.9
United States	4.5	6.9	9.7	12.9	16.8
OECD	2.9	4.9	7.3	10.2	13.6
EU15	1.6	3.4	5.9	9.7	14.2

Graphs

	Broadband subscribers per 100 inhabitants, by technology, December 2005
	OECD broadband subscriptions, by technology, December 2005
	Broadband subscriber net additions per quarter, millions, OECD
	OECD Broadband penetration (per 100 inhabitants) net increase Q4 2004-Q4 2005, by country
	Broadband penetration, historic, top five OECD countries, December 2005
	Broadband penetration, historic, G7 countries
	Total broadband subscriptions, percentage of OECD, top 5 countries, December 2005
	OECD broadband penetration and population densities
	OECD broadband penetration and GDP per capita

April 12, 2006 at 08:41 PM in Internet evolution | Permalink | Top of page | Blog Home

April 10, 2006

Call Forward voip

http://www.financetech.com/printableArticle.jhtml?articleID=184429045

Apr 05, 2006
URL: http://www.financetech.com/showArticle.jhtml?articleID=184429045

With promises of cost savings, enhanced functionality and stronger business continuity capabilities, Voice over Internet Protocol (VoIP) and IP telephony burst onto the scene more than five years ago. But fears about call quality and reliability kept the emerging technology mostly waiting in the wings. Now that it has matured, however, insurance carriers are expected to embrace VoIP and IP telephony solutions more widely in the next two years, according to experts.

"Currently, 27 percent of insurance companies in the United States have implemented IP telephony and 23 percent have applied VoIP," reports Lisa Pierce, vice president at Forrester (Cambridge, Mass.), who predicts that "50 percent of the insurance market will deploy this technology before 2010." Insurers are using the technology within branch environments to bring mobility to agents and brokers who move from branch to branch as well as to enhance customer service in the call center, she explains.

"The technology matured significantly in the last five years," relates Julien Courbe, managing director of service technology at BearingPoint (McLean, Va.). No longer bleeding-edge, VoIP and IP telephony -- the routing of voice conversations >> over the Internet and other IP-based networks in which voice data flows over a general-purpose, packet-switched network instead of traditional dedicated circuit-switched voice transmission lines -- also is no longer plagued with the quality issues it exhibited when it first appeared on the scene in 1998. "The major difference between VoIP and IP telephony is that with VoIP, you keep the legacy environment, whereas IP telephony represents the integration of a telephony application within the corporate environment," Courbe explains.

Both approaches offer opportunities for cost savings, as the technology enables both data and voice communications to share the same network, resulting in a simplified infrastructure and, consequently, streamlined network management. Further, it enables firms to avoid traditional phone charges by routing long distance calls over the Internet. But the advanced functionality, and resulting productivity gains, that VoIP enables may be emerging as an even more important business driver for the technology's adoption.

Feature Rich

For example, with the addition of tools that allow calls to be taken from virtually anywhere -- including via e-mail or BlackBerry devices -- and to be transferred automatically to knowledge experts within a call center, IP telephony provides opportunities for enhancing the overall customer experience. "No individual user needs all 400 features in IP telephony, but all of the options allow companies to choose which functionalities fit their enterprise needs," says Tony Kleckner, director and practice leader of financial services for Avaya, a Basking Ridge, N.J.-based VoIP and IP telephony vendor. Other vendors of converged communications solutions include Cisco (San Jose, Calif.), Nortel (Brampton, Ontario) and Vonage (Holmdel, N.J.).

VoIP can be deployed on any IP network, including those lacking a connection to the rest of the Internet, such as local area networks (LANs), using IP private branch exchange (PBX) ports and legacy digital PBX ports. Methods include connecting traditional telephones to VoIP converter boxes, installing IP-based phones that connect directly to the Internet or deploying "softphone" software that allows users to make calls from any personal computer using a headset or microphone.

VoIP grew from 1.2 million business subscribers in 2004 to 4.2 million business users in 2005. In the insurance industry, the seemingly sudden surge in VoIP and IP telephony adoption actually began several years ago, but companies only recently have finalized updates to legacy network technology that were originally initiated to maximize VoIP functionality and ensure network security.

"In the past year, VoIP grew eight fold," relates Kevin Kalinich, a consultant and national managing director of professional risk at Aon (Chicago). "Insurance carriers are looking at the advantages from a business standpoint and focusing in on network risk prior to implementation -- anticipating the vulnerabilities to security and exposure," he explains.

Yet, security has been the major challenge for insurers adopting VoIP. "Voice data is different from regular data, and CIOs have to devise network plans to include voice encryption, authentication and VoIP-specific firewalls," says Kalinich. The danger is that it is relatively easy to eavesdrop on unencrypted VoIP calls using open source solutions such as VoIPong or Vomit. As a result, many companies implement separate encryption and authentication tools to prevent hacking and eavesdropping.

Although most VoIP vendors include security solutions as part of their VoIP packages, "Security is a big issue," confirms Forrester's Pierce. "Most companies don't deal with security issues very well, and there are a lot of risks out there -- viruses, worms and hackers."

Money Talks

Still, most experts agree that with proper planning and network support, the benefits of VoIP outweigh the risks. In general, phone service via VoIP costs less than traditional landline service because users only need to maintain a single network. "With IP telephony, outgoing costs can be reduced by 15 to 20 percent of the recurring expenses of the matching legacy telephony environment," asserts BearingPoint's Courbe.

Cost was the initial reason St. Paul Travelers (St. Paul; $113.2 billion in total assets) adopted VoIP, according to Jamie Libow, telecommunications director for the carrier. "Initially, it was just cost savings that drove us to look at VoIP as a replacement for legacy phones," he explains. "The market was starting to move toward VoIP, and we knew the time would come soon so we needed to get our feet wet."

Libow began running internal pilots on several VoIP vendors' products in 2000. "I was looking for a stable platform with the utmost performance," he says. "In 2000, the system uptime wasn't what we were looking for."

Libow and his team eventually found more-robust products to meet the needs of the business. They decided that by combining Avaya's S8700 Media Center call center solution and Cisco's CallManager for agents and interoffice use, St. Paul Travelers would be able to maximize both stability and cost savings. "We decided to implement both vendors' solutions during a renovation in Hartford, Conn.," explains Libow. "We were able to run both on one [network] wire with IP telephony instead of two, and that proved to be enough of a cost justification."

By implementing VoIP, the company saves 33 percent of what it was spending on traditional telecommunication. But, gradually, St. Paul Travelers realized other benefits of the VoIP system besides cost. Softphones have enabled the mobile workforce to be more accessible while traveling between the carrier's two key locations in Hartford and St. Paul. "All of our agents can now be reached at a single number internally," says Libow. "Next, we will continue to roll out more functionalities for remote agents."

Cost also was the primary reason Johnson Inc. (more than U.S. $600 million in annual premium), a St. John's, Newfoundland-based personal and group home, auto, and travel insurer, decided to switch to IP telephony. "We wanted to get back some of the communication costs," says Glen Ryan, the carrier's coordinator of technical communications. "We have 43 office locations across Canada, and to keep things flowing on a daily basis was very expensive." Because Johnson Inc. had the existing infrastructure to support Cisco's VoIP product, in April 2003 Ryan tapped Cisco's CallManager for internal communications, and IP Cisco Express and Cisco Unity for the company's contact centers.

Initially, Johnson Inc. implemented the technology at six regional offices. To deploy the solution, the insurer first had to remove rented telephone equipment from Telco (Kfar Netter, Israel) and install a whole new network at each branch location, for which it contracted Aliant (Saint John, New Brunswick). "We decided that trying to merge any old technology with new technology would only cause more of a hindrance," explains Ryan. "Since we were renting, it was just easier to spend on the equipment to get more of a return on investment." Aliant also installed Cisco's solution for Johnson Inc. The entire initiative took two years to complete.

Johnson Inc. already has experienced a significant savings. "Before, our communication costs were around $2.4 million [CAN, approximately U.S. $2 million] annually, and right now we are running at about $1.6 million [U.S. $1.37 million]," according to Ryan. But Johnson Inc. also has recognized the customer service benefits offered by VoIP. Currently, it is working to tie Cisco's contact center features into the carrier's e-business strategy. "We have a 24-hour call center service that allows live chat with representatives," says Ryan. "We want to make sure we are offering the best customer service we can."

Stay on the Line

As Johnson Inc. is discovering, VoIP's benefits extend beyond cost savings. The technology enabled Northbrook, Ill.-based Allstate ($156 billion in assets) to service its customers at a critical time -- after Hurricane Katrina ravaged the Gulf Coast, including several Allstate facilities. With many offices and customers affected by Hurricane Katrina, Allstate was able to immediately transfer call center activity to other locations around the country. "Our business is about putting people's lives back together," says Catherine Brune, CIO for Allstate. "Because of VoIP, we were there for our customers when many of our competitors couldn't be."

But like many other companies, Allstate first looked at VoIP as a cost-savings play. "It has become much more than I think we ever envisioned it," notes Brune. "It is truly an enabler of a new business process and business continuity."

Allstate began exploring VoIP in 2000 and by 2003 decided the technology had matured enough to make the investment. Because Allstate already was using Avaya for telecommunications, the carrier's executives decided to deploy Avaya's Communication Manager in a customer-facing call center in Northern Ireland. "In the U.S., we struggled with how we could build a business case, holistically across the enterprise," explains Clay Roberts, enterprise architect for Allstate. "We figured if we could deploy this properly internationally, we could deploy this properly in the U.S."

Since the IT department had been testing VoIP products internally for several years, implementation went fairly smoothly, according to Roberts. By the end of 2004, Allstate built a business case on the benefits it gained from VoIP in Northern Ireland and decided to roll out the technology on a year-to-year basis. Since then, Allstate has implemented IP telecommunications throughout 20 Allstate service and call centers. "Now, we are in the process of rolling out IP telephony to a majority of contact centers," relates Roberts, who adds that the initiative is scheduled to continue over the next few years.

A Fresh Start

The same advanced VoIP functionality that appeals to established carriers like Allstate also can help start-up insurers provide high-level customer service. And since start-ups don't have legacy systems to deal with, many -- such as Calabasas, Calif.-based Insurance Neighborhood, which was incubated by Indianapolis-based WellPoint ($41.8 billion in total assets) -- are leapfrogging into VoIP. "Since our consumer promise is convenience of the Internet and the service of the local agent, we need to have a local network from Day 1," says Alan Katz, president and CEO of Insurance Neighborhood, who notes that the carrier deployed ShoreTel's (Sunnyvale, Calif.) VoIP solution because of the scalability and expandability of the system's features.

And carriers such as New York-based Integro Insurance Brokers ($300 million private placement) realize that converged communications can provide a competitive advantage right out of the gate. "The telephone is critical in our business," says Craig Lowenthal, CIO for Integro. "VoIP offers a combination of products and services for our employees to be accessible to our clients." The company, which started up in May 2005, chose Nortel's CS1000 platform for telephone switches, Call Pilot for voicemail, MCS 5100 multimedia server for audio and video conferencing, and the IP 2007 Phone -- VoIP phones that can be integrated with each employee's computer. "With this technology, our brokers can collaborate with each other as if they were all local," says Lowenthal. Currently Integro is live with VoIP in nine offices. It is in the process of implementing VoIP in five more offices and extending its features.

Of course, start-ups aren't the only organizations with an opportunity to build a VoIP network from the ground up. As part of an effort to migrate to a new core system, Safeway Insurance (Westmont, Ill.; $15.7 billion in total assets), which first began investigating VoIP in 2001, recently adopted the technology. "We didn't feel comfortable with the technology until recently, where we found ourselves in a unique position," says Mike Leather, network services manager for the insurer. "We were moving one of our offices and decided to investigate VoIP to replace one of our legacy systems." Safeway's legacy telecom system from Tadiran (Port Washington, N.Y.), located in the carrier's Monroe, Calif., office, "was an expensive system because we needed to call someone in to implement any changes," explains Leather.

In June 2005, Leather decided to implement ShoreTel's VoIP solution in the Monroe office. "Although we looked at a couple other vendors, it pretty much came down to ease of maintenance and the ability to manage the system ourselves," he says. The ShoreTel system, which runs on Safeway's Microsoft (Redmond, Wash.) Windows 2003 servers, is a distributed, scalable solution layered on the IP network. Along with ShoreTel's system, the carrier elected to implement Power-over-Ethernet (PoE) switches, which allow technicians to run just one Ethernet cable to the access point for supplying both power and data. Implementation took two days.

Leather relates that Safeway chose to purchase the system with every available feature, including call center forwarding and digital messaging. "In the future, we plan to exploit more features of VoIP, like screen pops, to provide better customer assistance," he explains, adding that the insurer is in the process of rolling out the system to nine more of its offices, a project that should be completed by May. "This is a great investment for Safeway," says Leather. "Overall, the cost of maintenance on the legacy system alone was going to be more than deploying this system."

April 10, 2006 at 09:00 PM in Telecommunications | Permalink | Top of page | Blog Home

April 08, 2006

Brits to spend £1.7bn on downloads by 2010

Netimperative - Brits to spend £1.7bn on downloads by 2010

By Staff
24-03-2006 04:27 PM
Related:
UK consumers will spend £1.7bn a year on downloading music, films and ebooks from the internet and on mobile phone content by the end of the decade, according to research.

The study, from online payments system PayPal, shows that spending on internet and mobile phone downloads and online gaming could account for as much as 10% of all online retail spending in the UK by 2010.

The biggest growth areas for digital downloads are the mobile and music industries, which will account for nearly nine in ten (89%) of all consumer spending on digital content.

However, by 2010, film downloads and online gaming will have become substantial markets and the e-book sector is also expected to be showing early signs of development.

Consumer spending on online music downloads will total £379m in 2010 according to the research.

The market in the UK was worth £35m in 2005, but is expected to grow ten-fold in the next five years as legal download sites such as iTunes gain greater traction.

The growth in value of legal music downloading will mean that Internet music will account for around 15% of all music sales by 2010.

The report predicts that the average UK web user will download 25 tracks and spend £15 on Internet music content in 2010 – average per-track prices will come down to around 60p as record companies continue to embrace the Internet and levels of competition between service providers increase.

Increased content and flexibility of packages are also likely to encourage more people to download more music, the research found.

Carl-Olav Scheible, general manager, UK Merchant Services for PayPal Europe said: “Consumers are going to shift more of their music purchasing to online services as devices change and digital storage becomes more prevalent and CD-use becomes less widespread.

“It will also be interesting to see what the mobile players and established online content portals do in the music arena – driving greater mass-market take-up of digital music downloads.“

Mobile services including music, movie clips and mobile TV services will create a market for digital content worth £1.14b by 2010, the report predicted, going on to say the market will grow three-fold from £380m in 2005 as the rise of 3G mobile will spur consumer spending on mobile services.

In 2005, ringtones, realtones and screensavers accounted for around two-thirds of mobile content spend, with games accounting for the majority of remaining revenues.

However, full-track music will account for an increasing proportion of content spending – UK consumers will spend over £200m mobile music in 2010. Video downloads will also increase in popularity, accounting for around 11% of mobile content spend within the next 4 years.

Meanwhile, eBooks and online gaming will be areas where substantial growth will be seen, according to the report.

The UK online film download market will be worth £109m by 2010, rising from virtually nothing today. PayPal expects online downloads in the large part to supplement rather than replace traditional means of obtaining film content (DVD purchase, DVD rental and subscription/digital TV).

However, it is likely that services such as iTunes film download will create a market for film download and that new players offering streaming “film on demand” will have started to make inroads by 2010.

UK gamers will spend £67m online in 2010, which represents 70% growth from today. The market is currently worth £39m, derived in the main from subscriptions to PC-based online services.

However, by 2010 spend on services within games – buying new levels and characters – is likely to increase to around £9m. Subscriptions for console-based services such as Xbox Live are also likely to rise dramatically.

Brits will spend £8.9mlion on eBooks in 2010 – making it the smallest of the digital content markets in five years’ time.

The Digital Content research was conducted in March 2006 for PayPal Europe by Datamonitor

April 8, 2006 at 06:02 PM in Business Models | Permalink | Top of page | Blog Home

Internet Changes Everything