In the Spotlight: Azuki co-founder Cheng Wu

Cheng Wu

One month after emerging from stealth mode with a new mobile tool kit to enable personalized and interactive rich-media services, Azuki Systems has been quickly learning the ins and outs of the mobile media services market. The company was co-founded by serial entrepreneur Cheng Wu, who previously started three ventures, ArrowPoint (sold to Cisco for $5.7 billion), Arris Networks (sold to Cascade Communications for $217 million) and Acopia (sold to F5 Networks for $210 million). Now deep into his first foray in the mobile realm, Wu spoke with Associate News Editor Sarah Reedy about the opportunities and challenges in the market for mobile services.

On opening up the market for content: The market has seen quite bit of momentum, driven by a couple of things. One is the iPhone is driving quite a bit of intelligent, open-content-type access. We are also seeing that carriers are increasingly more open about focusing on increasing the data-plan traffic. Those two factors together seem to be pointing to some sort of deployment for content services that are more open and that allow customers or users to create what we call mashup solutions at their discretion to be able to collaborate on content much more freely. What we’ve learned from the past couple of months is really that the content providers are extremely interested -- almost no one would be an exception in this case -- in going beyond just marketing their premium content, saying, ‘The more we can generate activities around the content, maybe in the form of social networking-type collaboration or user-generated-content-type syndication, that will increase a lot of traffic.’ From there, they have the view that that traffic will drive other types of revenue, and that’s becoming quite a different model from the traditional model of their content.

On breaking through mobile’s roadblocks: From a content provider perspective, obviously there is the desire to try to open up more for more traffic and more services that can meet the requirement for their content. The challenge is that they want to see that additional services can be created without creating a burden to their IT operation. We find out that those people have a very simplistic way of porting our services. The challenge will be how to create a set of services for content that will be derived from how they operate the content today. From a carrier perspective, I think what they are looking for is a way to increase their data plan traffic. The challenge right now is the business-model issue of how to tie that desire with other activities together that they feel convinced that their data traffic will increase and their revenue will increase as a result of that. I think the challenge is really to get two parties, the content providers and carriers, to understand and embrace the additional business opportunities that might be ahead of them by opening up. There is, on one hand, fear of cannibalization of their existing revenue. On the other hand, there is the desire to try to keep traffic up to increase revenue. The question for those two factors is which side will grow faster than the other?

On the influence of Apple’s entrance into mobility: From a carrier perspective, there is a lot of pressure to provide iPhone-like services. People started with iPhone-like handsets, but I think the issue here is not to create a handset that is more iPhone-like but to create services that are more iPhone/iTune-type services that are emerging. There is a gradual recognition that that is the game that needs to be played and that increasingly more and more bandwidth is needed for services that are mimicking the behavior of iPhone-type services.

On following the Internet’s example: Especially on the content side, there is an increasing recognition that the downloadable application-type paradigm is just simply too difficult to make content ubiquitous enough. I say that in the context of mobile device on-portal, where people have the notion that if you have an on-device portal, you should be able to support all different types of portal content. It turns out to be a very niche market. The reason being: As you try to deploy that, you’ll find out that there are main differences in terms of the handset capability, player and encoding, that make the technology – from a deployment point of view – less than straightforward. What really is needed is a simple way that is ubiquitous, that people know for sure works, especially for content. I’m pretty confident that browser-based content deployment with a browser-based playlist will probably be much easier from a deployment point of view.