Welcome!

@CloudExpo Authors: Automic Blog, Pat Romanski, Liz McMillan, Kevin Jackson, Elizabeth White

Related Topics: Containers Expo Blog, Java IoT, Linux Containers, @CloudExpo, @DXWorldExpo, SDN Journal

Containers Expo Blog: Article

Uber Taxis and New Business Models

In a world of NFV we cannot easily map the businesses & business models of today onto the possible business models of tomorrow

A recent post by John Wilmes on the TM Forum website caught my eye for drawing a parallel between the Uber car service business model and the telecom service provider business model as network functions virtualization (NFV) becomes a reality. Wilmes uses this metaphor to remind us of the potential value of dynamic pricing as a tool in carrier efforts to match supply to demand. He also cautions service providers to be careful how they sell the message of dynamic pricing to their customers. So far, so good.

However, this gave me pause: "NFV will let them [operators] create more of almost any part of their infrastructure on the fly, and turn it off when no longer needed, but that too comes at a price - one that is proportionately much higher than what Uber faces. While Uber needs only to make minimal investments in drivers who furnish their own cars, operators also have to buy the ‘cars' up front, or at least reserve them from infrastructure providers."

The message seems to be that customers may face a future of higher prices, supply shortages or both, if surge pricing takes over thanks to NFV. This rather surprised me for two reasons. First, taxis and buses are more efficient in their use of road and energy resources than cars are, even if we still like to drive our own cars sometimes. Similarly, MetraTech became actively involved in the European Telecommunications Standards Institute (ETSI) NFV program mainly because we believe that NFV would result in a dramatically more efficient deployment of network resources and efficient resource allocation should, overall, reduce costs. Services would now be deployed in a cloud-like fashion, making customers happy and providing service providers with new revenue streams. Secondly, my experience is that, despite the small commotion over Uber's surge pricing plans, those of us who use Uber recognize that the system has made it easier and cheaper to get a cab in some locations. According to the drivers I have spoken to, they're driving more and waiting less, so they're more productive. Sounds like a win-win to me.

Wilmes' Uber metaphor suggests we think of Uber, the company, as the service provider, and the car owner and drivers who are contracted to Uber as being the equivalent of network elements, providing transportation from location to location. We could recast the metaphor, and perhaps come to a different conclusion. The car owner and drivers are in fact the service providers, and Uber is an agency that links potential customers to service providers more efficiently. The drivers, in fact, may not own their vehicles, and for some, the optimal business model is to lease a vehicle and set up a maintenance contract with the leasing company, just like bus companies and airlines do.

Perhaps in an NFV-driven world there could be many service providers - both small and large companies - that operate geographically, similar to taxi drivers in the Uber model. The service providers lease the technology from other businesses, whose job is to invest in the infrastructure, build it and run it, selling space in the system to all-comers who can then repurpose the technology at will, according to changing end-customer demands. And where is the future equivalent of Uber in this scenario? We need to think of Uber, not so much as a service provider to end users, but as an agent - a service provider to the service providers who serve the end customers.

Since we are talking about agents, let's remember that as the Internet of Things evolves, agents will effectively be apps that serve both humans and machines. Now, there's a coincidence. What is Uber? It's actually an application that allows end users and service providers to connect. Uber, the company, makes money when people use their app, which represents an old and comfortingly familiar business model.

There is a pleasing symmetry here. Just as chunks of technology in an NFV-driven network can have transient lives in different roles, end users and their service providers will have transient relationships that will last just as long as they are needed. This uber-flexibility, not just of hardware, but of business relationships, will create a competitive market that should benefit customers greatly. On the other hand, perhaps service providers will have a tough time for a period, just as traditional taxi companies stumbled for a time, attempting to use regulation to preserve their old business models instead of embracing the new.

The fun of thinking of the future in this way is that when we try to connect the dots from the present to the future, we can easily come up with something of a tangle. In a world of NFV (and software-defined networking [SDN] too, of course) we cannot easily map the businesses and business models of today onto the possible business models of tomorrow. Whatever we dream up could be wrong. But the biggest mistake of all is to assume that things stay unchanged.

Wilmes follows up his gloomy prediction with this thought: "And the business and technical agility that they need to amortize those costs more quickly with dynamic pricing is also expensive to acquire and maintain."

Perhaps this is what underpins his gloom: keeping track of NFV is going to be difficult and expensive. I have good news for him. Billing systems that enable dynamic pricing across a web of complex business relationships are already here, and when NFV is widely deployed, those systems, including MetraNet will have the industrial power, precision and scalability to handle whatever financial transactions NFV can throw at us. None of this will be trivially easy, but NFV itself is not a trivial exercise. If it were, we would have done it years ago, just like we would've developed Uber back when we still had horse-drawn cabs - if only we'd also had giant data centers, ubiquitous mobile data connectivity, smartphones, journey planning algorithms, GPS and flexible billing and settlement.

More Stories By Esmeralda Swartz

Esmeralda Swartz is VP, Marketing Enterprise and Cloud, BUSS. She has spent 15 years as a marketing, product management, and business development technology executive bringing disruptive technologies and companies to market. Esmeralda was CMO of MetraTech, now part of Ericsson. At MetraTech, Esmeralda was responsible for go-to-market strategy and execution for enterprise and SaaS products, product management, business development and partner programs. Prior to MetraTech, Esmeralda was co-founder, Vice President of Marketing and Business Development at Lightwolf Technologies, a big data management startup. She was previously co-founder and Senior Vice President of Marketing and Business Development of Soapstone Networks, a developer of resource and service control software, now part of Extreme Networks.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@CloudExpo Stories
Digital transformation is about embracing digital technologies into a company's culture to better connect with its customers, automate processes, create better tools, enter new markets, etc. Such a transformation requires continuous orchestration across teams and an environment based on open collaboration and daily experiments. In his session at 21st Cloud Expo, Alex Casalboni, Technical (Cloud) Evangelist at Cloud Academy, explored and discussed the most urgent unsolved challenges to achieve f...
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, discussed some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he covered some of the best practices for structured team migration an...
Recently, WebRTC has a lot of eyes from market. The use cases of WebRTC are expanding - video chat, online education, online health care etc. Not only for human-to-human communication, but also IoT use cases such as machine to human use cases can be seen recently. One of the typical use-case is remote camera monitoring. With WebRTC, people can have interoperability and flexibility for deploying monitoring service. However, the benefit of WebRTC for IoT is not only its convenience and interopera...
SYS-CON Events announced today that Synametrics Technologies will exhibit at SYS-CON's 22nd International Cloud Expo®, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Synametrics Technologies is a privately held company based in Plainsboro, New Jersey that has been providing solutions for the developer community since 1997. Based on the success of its initial product offerings such as WinSQL, Xeams, SynaMan and Syncrify, Synametrics continues to create and hone inn...
"WineSOFT is a software company making proxy server software, which is widely used in the telecommunication industry or the content delivery networks or e-commerce," explained Jonathan Ahn, COO of WineSOFT, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
There is a huge demand for responsive, real-time mobile and web experiences, but current architectural patterns do not easily accommodate applications that respond to events in real time. Common solutions using message queues or HTTP long-polling quickly lead to resiliency, scalability and development velocity challenges. In his session at 21st Cloud Expo, Ryland Degnan, a Senior Software Engineer on the Netflix Edge Platform team, will discuss how by leveraging a reactive stream-based protocol,...
Modern software design has fundamentally changed how we manage applications, causing many to turn to containers as the new virtual machine for resource management. As container adoption grows beyond stateless applications to stateful workloads, the need for persistent storage is foundational - something customers routinely cite as a top pain point. In his session at @DevOpsSummit at 21st Cloud Expo, Bill Borsari, Head of Systems Engineering at Datera, explored how organizations can reap the bene...
The past few years have brought a sea change in the way applications are architected, developed, and consumed—increasing both the complexity of testing and the business impact of software failures. How can software testing professionals keep pace with modern application delivery, given the trends that impact both architectures (cloud, microservices, and APIs) and processes (DevOps, agile, and continuous delivery)? This is where continuous testing comes in. D
The dynamic nature of the cloud means that change is a constant when it comes to modern cloud-based infrastructure. Delivering modern applications to end users, therefore, is a constantly shifting challenge. Delivery automation helps IT Ops teams ensure that apps are providing an optimal end user experience over hybrid-cloud and multi-cloud environments, no matter what the current state of the infrastructure is. To employ a delivery automation strategy that reflects your business rules, making r...
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software. They hope to capture value from emerging technologies such as IoT, SDN, and AI. Ultimately, irrespective of the vertical, it is about deriving value from independent software applications participating in an ecosystem as one comprehensive solution. In his session at @ThingsExpo, Kausik Sridhar, founder and CTO of Pulzze Systems, discussed how given the magnitude of today's application ...
Sanjeev Sharma Joins June 5-7, 2018 @DevOpsSummit at @Cloud Expo New York Faculty. Sanjeev Sharma is an internationally known DevOps and Cloud Transformation thought leader, technology executive, and author. Sanjeev's industry experience includes tenures as CTO, Technical Sales leader, and Cloud Architect leader. As an IBM Distinguished Engineer, Sanjeev is recognized at the highest levels of IBM's core of technical leaders.
Digital Transformation (DX) is not a "one-size-fits all" strategy. Each organization needs to develop its own unique, long-term DX plan. It must do so by realizing that we now live in a data-driven age, and that technologies such as Cloud Computing, Big Data, the IoT, Cognitive Computing, and Blockchain are only tools. In her general session at 21st Cloud Expo, Rebecca Wanta explained how the strategy must focus on DX and include a commitment from top management to create great IT jobs, monitor ...
The 22nd International Cloud Expo | 1st DXWorld Expo has announced that its Call for Papers is open. Cloud Expo | DXWorld Expo, to be held June 5-7, 2018, at the Javits Center in New York, NY, brings together Cloud Computing, Digital Transformation, Big Data, Internet of Things, DevOps, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...
"Digital transformation - what we knew about it in the past has been redefined. Automation is going to play such a huge role in that because the culture, the technology, and the business operations are being shifted now," stated Brian Boeggeman, VP of Alliances & Partnerships at Ayehu, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Continuous Delivery makes it possible to exploit findings of cognitive psychology and neuroscience to increase the productivity and happiness of our teams. In his session at 22nd Cloud Expo | DXWorld Expo, Daniel Jones, CTO of EngineerBetter, will answer: How can we improve willpower and decrease technical debt? Is the present bias real? How can we turn it to our advantage? Can you increase a team’s effective IQ? How do DevOps & Product Teams increase empathy, and what impact does empath...
You know you need the cloud, but you're hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You're looking at private cloud solutions based on hyperconverged infrastructure, but you're concerned with the limits inherent in those technologies. What do you do?
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...