Wednesday, February 10th, 2010

In the following article, Professor Reg Coutts discusses ”Agile Product Development” – the next big thing in telecommunications.

Telecommunications networks find that launching innovative new products is extremely difficult due to the highly integrated nature of their core systems and support infrastructure.

In this article, Professor Reg Coutts tracks the progress of the introduction of intelligent networks and the role they were supposed to play in product development. Red Button proposes a new solution and introduces the concept of “agile product development”.

It will mean that small innovative players can launch network level products along side the big telcos. Time to market will be measured in months - not years.

An agile product development platform like Red Button’s Connectivity Server™ encourages new thinking because it reduces the cost of innovation and hosting dramatically.

Red Button’s Connectivity Server™ technology presages a trend toward developing new products off-network. Once they have proven themselves in light-weight, low cost clouds, carriers can then integrate them on to their internal IN platform to gain the economies of scale.

The telco stumbling block
The last 30 years has seen fantastic innovations which have combined with market liberalisation to dramatically reduce prices and drive innovation in Telecommunications services.

The advent of mobile communications and the Internet has changed the world. However, telecommunications carriers, particularly the larger more established operators, have found it difficult to ride these waves of innovation for the benefit of their network infrastructure.

The stumbling block is mammoth network infrastructures consisting of more than just vast networks of transmission and exchanges but includes IT support and billing systems which are in continual development.

Given their highly interconnected infrastructure, Telecommunications carriers rely on large global telecommunication equipment vendors for much of their innovation.
In-house engineering capability has long since been relinquished in favour of global scale, and standardisation. In the competitive telecommunications market place, carriers achieve differentiation through tariff packaging coupled with reducing costs via economies of scale and scope.

Intelligent networks
Network liberalisation began in the 1980s. Telecommunications carriers responded seeking to differentiate and become more innovative using new network services developed via the Intelligent Network (IN) concept developed in the United States.
The IN is a separate network platform within a carrier’s individual overall network of ‘dumb’ switches that provides a platform to support new smart service products without affecting the efficiency of the main network.

For example national 1300 services that connect you to the nearest local pizza shop are the sorts of services that were developed on the fixed network exploiting this IN strategy.

The dominant carrier usually developed new services and made them generally available to other carriers either by regulatory pressure or through market need.
While most telecommunications carriers today have an IN within their overall network, the interconnectedness of their network infrastructure including their billing engine makes it practically impossible to develop new innovative services cost effectively or in realistic time frames particularly without being confident about how the market might respond.

Overall the IN with the intelligence within the network was only partially successful in stimulating innovation in new telecommunications services.

The Internet changes everything
However, the Internet from the mid 1990’s revolutionised telecommunications networks and the industry. A new breed of ‘internet service providers’ (ISPs) entered the market. These people were generally IT folk from outside the telecommunications culture and by definition saw things differently.

Many industry commentators describing the trend refer to the telecommunications network as the Dumb Network where all the innovation happens at the edges in new Web based services or on computer equipment connected to the network.

Mobile phones
This same trend happened for the mobile networks although there was no distinct IN stage unless you regard a mobile network as intrinsically intelligent!

In just over 20 years mobile networks have morphed through three generations of network technology to the current 3G with 4G in the wings. However, the most successful network innovation in mobile networks has been the Short Message Service (SMS) ‘cooked up’ by European Telco geeks in the late 80’s to be a half baked ‘tele-bearer service’. Many in the mobile industry at the time (in the 90’s) thought SMS, which initially did not operate between networks, was a nuisance and one operator in Australia wanted SMS disabled! SMS today is THE most profitable service on the mobile carrier menu and still comes in only one flavour. No market research would have predicted such a market response!

Mobile phone innovation has been focussed on the most visible manifestation - handsets. Enabled by global standards and insatiable market demand the mobile has evolved from ‘the communicating brick’ in the late 80’s selling for over $5,000 to the iPhone of today for less than $1,000.

The leading smart phone (the iPhone) is in itself a mobile Internet development platform supporting smart software developers creating hundreds of new innovative applications.

Nokia had developed an earlier version of an ‘open platform’ for its smart phone range but not to the same dramatic extent.

The trouble with developing at terminal level is compatibility. Its Apple vrs IBM all over again – but worse. In addition not all consumers are tech savvy and many worry that downloading software will end in tears (four hours on the phone to a non-English speaking person who insists that he is talking to you from Melbourne).

Maybe there is a new way to deliver product innovation without handset discrimination and without futzing with software. Read on.

The impact of social media
The next stage in this revolution is a platform that supports development of innovative services harnessing the ubiquity of the Internet and the power of mobile communications.

However, what does the demand for services such as Face Book teach us?
Science fiction writers of the 20th century imagined technology would change human nature. Cumbersome emotions would become superfluous as technology ironed out life’s bumps, though predictably the opposite is the case. The vast majority of the internet is a seething mass of humanity - warts n’ all.

The Internet is mostly a conduit for human communication. There are many new ways to think about why we communicate, with whom and how we communicate! And hardly surprisingly, users (people) don’t want to be locked in to a particular carrier’s network or restricted to the latest single mobile phone; it’s sort of a liberty thing.

Paradigm shift
Red Button Technologies, an Australian based start up chaired by Professor Reg Coutts, industry veteran and former member of the Government’s NBN expert panel, has initiated a paradigm shift.

Red Button Technologies has developed a novel but robust telecommunications platform they call a Connectivity Server™. In many ways conceptually the Connectivity ServerTM is like the telephone IN of the past but is less integrated with Telco’s networks, interconnected to them and more integrated with the Internet.

As Professor Coutts explains “we’ve sort of put it over the fence. It can come over and play any time but it lives next door.”

Further unlike the IN, the Connectivity Server™ supports the development of network services that integrate voice, messaging and data and is independent of any particular carrier’s network.

How does all this work?
“Simply, the world is becoming more interconnected. You can host new applications and services on a reasonably priced box and although it’s on the other side of the world, you would think it was in the same building. And this interconnectedness will only get richer” said Professor Coutts.

Putting fears of “the machines” taking over the world aside, in the meantime the world will enjoy vast innovation in integrated communications.

Red Button has coined the term “agile product development”. Red Button’s Connectivity Server technology presages a trend toward developing new products off-network. Once they have proven themselves in light weight, low cost clouds carriers can then integrate them on to their internal IN platform to gain the economies of scale.

Red Button doesn’t envisage agile product development competing with Telco’s but working with them to achieve speed to market with significantly reduced product development risks.

“We see telcos as our number one development customers,” said Chief Executive Justin Wearne.

The Connectivity Server™ will launch new innovative services that don’t rely on users having the latest terminal such as the iPhone.

Integration of voice, data, internet and SMS technologies enables a new paradigm. Current products tend to be “mode faithful” acting with minimal interdependence. Voice services tend to be developed within voice service boundaries, SMS tends to be used for SMS. But vast power is derived when these technologies are interbred. Like when a voice mail message is stored and an SMS notification is sent.

The Connectivity Server™ encourages unlimited product development along these lines cross-pollinating voice, data, SMS and web applications to create truly exotic telecommunication product off-spring.
“We can’t stress how important we see this new innovation. Agile Product Development is the next big thing. It will mean that small innovative players can launch network level products along side the big telcos. Time to market will be measured in months, - not years.” said Professor Coutts.

An agile product development platform like Red Button’s Connectivity Server™ encourages new thinking because it reduces the cost of innovation and hosting dramatically.

One colleague referred to the Connectivity Server™ as enabling ‘integrated messaging on steroids’! Agile product development could become all the rage.

Breathing Life into Old Products
In addition Red Button’s initial product to be developed on the Red Button platform, Assure ConnectTM promises to re-invigorate many existing network products such as the basic fixed or mobile phone and particular network based services such as Telstra’s Delayed Hotline service.

“But the real opportunity is simultaneously reducing the demand on 000 services while improving 000 effectiveness. That is one of the most significant and surprising findings to emerge from our independent market research” said Professor Coutts.

When asked to elaborate further professor Coutts was elusive: “You will just have to wait until our market launch in a few months.”

Contact Profile

Red Button Technologies

Red Button Technologies Pty Ltd was formed in 2006 through a partnership between telecommunications expert Professor Reg Coutts and technology specialist marketer Justin Wearne.

Professor Coutts was a member of the expert panel formed by the Federal Government in 2008 to provide advice on the National Broadband Network which lead to the announced policy to invest $43 billion on the national network. He is an Emeritus Professor of telecommunications at the University Adelaide.

The company received an AusIndustry COMET Grant in February 2009 to develop the Connectivity Server prototype and to assist with commercialisation of the venture.
In December 2009, Red Button announced that it had received a $500k investment from Melbourne based firm Optimation Software Engineering and have entered into an agreement to develop and commercialise Red Button’s Connectivity Server platform.

Further information
Justin Wearne
Chief Executive Officer
[email protected]
Mobile 0414 744 481

Prof. Reg Coutts
Chief Technology Officer and Chairman
[email protected]
Mobile 0414 477 766
Justin Wearne
P: (08) 8359 3066
M: 0414744481

Prof. Reg Coutts

M: 0414 477 766


telco, telecommunications, product development, red button


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