Doing and knowing

by Thomas Howe

Today's service providers are real "doers." From business model to world view, carriers see the world in terms of what they can do for their customers. They excel at doing things like connecting two phones, sending a text message or creating a conference. Larger operators do things like write custom telephone applications or integrate enterprise software into call centers. In theory and in practice, today's service providers work off of a single business model : take a rare thing, and charge the subscriber for "doing" something with it. For years, this has been a lucrative path, and still widely is, but the tide has changed, primarily because the "doing" has gotten easier. Open source software, multiple transport paths such as cable, fiber and the myriad wireless options all contribute to an exponential rise in the number of service providers able to "do" something for businesses and consumers. This increased supply adds pricing pressure to providers, forcing them to seek better approaches and business models. 

Tomorrow's service providers will rely on a very different sort of model: "knowing."  Instead of generating value by "doing" things for people, they will generate value by "knowing" things that they learn by "doing" things for people.  Focused on data collection, the carriers will be experts at your social network, because your real social network exists in your call detail records.  They will be knowledgeable about where you spend your time, because they can track your cell phone. They will know what sorts of TV shows you watch, because they deliver video to your handset, or, because of quad play, they provide your home TV service as well.  Unlike "doing", which is rather easily replicated, "knowing" is nearly impossible to replicate.  Sure, a new carrier can start to collect your personal data, but they cannot recreate your past data. That sort of data is safe and sound in the walls of your current operator, and it's not going anywhere, and one day - because the data isn't moving - neither will you. 

What sorts of things can a service provider know? The obvious ones are personal information and context. The trusted billing relationship between carrier and customer provides information like address, age, family structure, gender and nationality. Only the carriers can really determine our life context: where we are, who we talk to, if we are in a moving car...  STL Partners identifies seven different categories of digital assets a carrier has access to, including information about relationships, interactions and devices. All of these assets are examples of things that carriers "know" - all things that are difficult to reproduce and all things are that are immensely valuable. 

The problem? Privacy. At this point, you hear the privacy objections immediately. Here's what's missing from that: permission. There are all sorts of times when users gladly give up their personal information, and there's no reason to think that this is going to be different here. When consumers see giving personal information up as a benefit, and they're asked for it, they will generally give it. Location based Apple iPhone apps are a great example: when I want to use Yelp to find a place to eat, and it asks to use my current location, I'm annoyed that it even asked. I'd rather it just do that automatically. The value I find from finding a great place to eat far outweighs my concerns about who knows where I am. One day, the carriers might power the Barnes and Noble member card service.  For a 10 percent discount on my purchases, I will allow the bookstore access to my data.  As I walk into the store, the carrier will notify the shop keeper that I've entered, and send coupons to my phone based on my past purchases.  Maybe they know my wife bought this book yesterday, or suggest one that a Facebook friend bought last week. As I walk up to the counter, my smart device will automatically pay for my purchase - no need to whip out credit card or member card.  For me, the consumer, it's all good. For the carrier, it's better than good - it's the final answer to the dump pipe problem. 

Thomas Howe is a long-time telecom consultant, writer and speaker who is the CEO of the Thomas Howe Company, providing expertise in improving the business process with real-time communications. His website is at http://www.thomashowe.com