The Future OSS, in Larry Dennison’s eyes

[Carriers] will always have that last-mile connectivity, to begin with. A two-sided business model is emerging: They’ve got the relationship with the end customer and possibly with a lot of people who want access to that end customer. How do they approach thinking about that platform in the middle? Quite often carriers will try to retain too much of the interface to the end customer. Do they see value in just being the platform? Which relationship does the end user value more: the relationship with the carrier or with their app supplier?

Do you think about buying content from your local carrier? Not really. You think about content being supplied elsewhere. Insofar as [carriers are] good distributors, people are happy [with them]. But the models here are a bit fuzzy. [Telco] business offerings start out with hosted Exchange and a few other simple commodity offerings. If you try to move up the food chain, the application universe explodes too quickly for carriers to become an effective channel. There are way too many apps out there. So carriers pick and choose what is universally appealing. They have a much harder time with specialized things.

On open platforms: Open-source communities provide a lot of innovation basically for free. MySQL started out as open-source software; Sun basically got the rights to it, and as a result, it disrupted Oracle a bit. They had to move down-market and address these open-source projects. You’re seeing a whole raft of people interested in developing free software apps. Apple gave up trying to produce apps for the iPhone. They have some, but they created a community for people to develop apps. They reduced all the barriers for people creating apps such that your average programmer can develop an app, insert it into Apple Marketplace and sell something. These micro app developers are a potent force in some markets. In the OSS space, companies like Salesforce.com are trying to encourage a raft of [micro-developers] to write things for the software platform. This is a new emerging model: How do you create an open platform to launch an attack at a particular problem?

On selling service quality with open platforms: [Carriers’] brand identity is at stake. It’s like in content delivery: We get DirecTV and Comcast here. I’m pretty sure on both you’ll find the Playboy channel. Somehow carriers have to disassociate their brand identity from some of the content they’re carrying. A similar thing is true [for open app platforms]: They have to be careful about what they’re selling. Are they serving as transport or a way to access those things without condoning them or [their service] quality? Carriers could add value through security, availability, up-time, etc., and create a brand identity around that without necessarily saying they know anything about your favorite app.

On telco OSS in the cloud game: The phone companies are really good at making money off of very small bills, which is why the whole usage-based accounting thing ought to be appealing to them. We’ve heard historically that carriers are so efficient at that, they’re actually much better than the credit card companies. So there’s a marketplace for the carrier among people that really care about that 1% to 2% spread between a credit card and a phone company. If you’re operating a low-margin business where you’re making 15% on the sale, that 1% to 2% overhead adds up really fast.