Q&A

Q&A

Scott G. Silk, CEO of Action Engine, explains to Priscilla Awde why he believes the company's 'browserless' mobile application platform is leagues ahead of the 'browsered' competition

Thinking outside the box

Optimistic, enthusiastic, energetic -- these are somewhat rusty epithets when applied to what has been the ailing telecoms sector. However, they are fundamental to Scott G. Silk, president and CEO of American software company Action Engine Corporation, who sees the market as both extremely dynamic, and as attracting investors. As operators are beginning to understand their customers, and brands are beginning to understand this powerful medium, Silk expects the mobile applications and content market to grow exponentially.
Backed by New York venture capitalists Baker Capital, the company is a relative newcomer to the industry albeit one on which many are keeping a close eye. Founded in 2000, Action Engine spent the first four years in intensive R&D developing a software platform for mobile operators, enterprises and application developers which, it believes, is several years ahead of what Silk refers to as the 'big boys'.
Employing all the advantages of a small, entrepreneurial company, the Action Engine founders never accepted the prevailing wisdom that operating systems for mobile devices should or could be similar to those developed for the computing environment. While others made what he believes were predictable responses to the whole idea of accessing mobile data services, Silk believes his company had the vision to 'think outside the box', investing over 100 man-years of development, and raising over 25 million GBT of funding to date. The result is the Action Engine Mobile Application Platform, the company's one-touch, client server solution which eliminates 80 per cent of keystrokes and decreases network response times to make all applications 20 times faster than existing systems.
 "We didn't want to replicate a PC-like experience but to create a new paradigm," he explains. "Early on we knew that phones would inevitably follow Moore's Law, becoming more powerful and including more available computing horsepower which we wanted to exploit to make the mobile experience faster and applications easier to use.
 "We have shattered the mobile usability barrier: people can now execute rich computing applications on their phones at the same speed as they do on their laptops. But we have done it with a client server platform rather than using browser technology optimised for the computing environment."
The fundamental advantage of the system is that most of the choices are made offline on the handset using resident software either previously downloaded from the operator or embedded into the ROM of the device at manufacture. Users quickly navigate their way through a series of drop down menus on the phone to refine their search. Unlike most existing systems which involve numerous exchanges between the phone and the network before users finally get what they want, Action Engine saves time by only accessing the network with a specific request once the user has specifically defined all parts of the request and chooses to send it to the network. The result is that because users find it considerably faster and easier, they use mobile data applications more.
Business customers will now be more willing to use their phones to access corporate databases and applications such as CRM, diaries and corporate directories, whilst sales staff can quickly update files and retrieve specific and relevant up-to-the-minute information.
All of the popular data services (travel, news, financial data, sport and film clips plus fashion information), including location based applications (people, place and facility finder), are available faster and more conveniently, which drives up usage. Downloading a one minute music clip or full song for example takes 30 seconds compared to the more common eight minutes.
Action Engine has significantly reduced what was originally a relatively big software package so that it can run on all of the mid and high tier phones in the market. The architecture has now been optimised to run on Java handsets and this next generation is expected to be available in September.
The system is expected to have a knock-on effect as application developers will have more of an incentive to create innovative content and products to sell in to the operators.
Offering more inventive applications makes it easier for operators to differentiate themselves from competitors, whilst speeding up the user experience may increase average revenues per user and therefore overall revenues. Although third generation networks supporting higher speeds are rolling out, take up of 3G services has been slower than anticipated. Although successful in Asia, in Europe, all but the early adopters still need to be convinced of the value of mobile data and video -- even they may be deterred because access is difficult and time consuming.
Feature rich phones are becoming more popular but many people use only a fraction of the available functions which has a negative effect on the success of the mobile data market. Estimates are that 76 per cent of people do not use the data services capabilities of their phones because they are too complex to operate. Neither do people use their phones as much as they might which, considering that operators are under pressure to increase revenues, does little to contribute to overall profits.                                 Â©
"Mobile devices have the computing power to execute many applications but usability is hampered by slow speeds, small screens and keypads. Based on drop down menus, our system is designed for the mobile form and leverages the power of the handset," explains Silk.
 "Because all the applications are integrated on a common platform, data is shared between them and the software learns patterns of use. The result is a personalised phone experience, as, with use, the device gets smarter and remembers preferences. People have regular patterns to their lives: generally they travel to the same few places, on the same airlines or trains and eat similar foods wherever they are. Drop down menus reflect these choices making it still faster to navigate through the system."
However, even the most innovative content and services will not drive mobile data growth if the people cannot use them quickly and conveniently because response times are slow and the number of keystrokes and transactions is intensive. A case illustrated by the fact that although location based services and other sophisticated applications have been available for some time, take up is relatively slow. Silk suggests that what is missing and inhibiting rapid adoption of mobile data is the user experience -- the time it takes to download anything -- a situation he suggests is quickly remedied.
From his perspective, all operators have to do is buy and install a server and roll out the Action Engine Mobile Application Platform which is licensed to them on a server and per user basis. To make deployment even faster, Action Engine also offers a turnkey pack of pre-developed applications called Brand-n-Go. With Brand-n-Go, Action Engine has sourced the content, built the applications, and absorbed the hosting costs -- operators only have to choose from the Action Engine application catalogue, place their "brand" on the pack and "go" to market. Since the system logs and reports the number of users by application, operators can judge the success of each package making it easier to segment and target their customers and drive up revenues. The ultimate goal is to add value, and therefore profit, to mobile phone and data sales.
Action Engine is currently running trials in North America, Asia/Pacific and Europe. Two large American operators are planning to introduce a phone with pre-integrated software later this year. An Asian telco is trialling the mobile application client to deploy and test a suite of branded services and, if successful, plans to roll them out to its wider customer base. In Europe, Action Engine is working closely with a number of key operators and distributors and is developing specific trials for a Tier 1 and a Tier 2 operator, as well as working with a European mobile phone distributor to create a tailored application pack which can be sold direct to operators and consumers.
SMART Communications in the Philippines has launched its own version of the system and used the Action Engine Mobile Application Platform to create a suite of applications sold as Amazing Explorer. As well as successfully differentiating itself from competitors, repeat usage of data service on high-end devices has risen by nearly ten per cent. SMART can update or add new applications by seamlessly sending an over-the-air command to customers' phones and users can switch between phones to access the range of services.
The system was deployed in stages the first of which involved installing the server in the data centre and pre-installing client applications on a ROM. Location based services have been integrated into the system and users are able to control when they want to access the network. Seven new services were developed: movies; music; travel; celebrities; personal; sports and fashion/beauty and branded to target particular customers.
Amazing Explorer is not only driving data usage but also allows SMART to expand its products beyond SMS. Customers have on or off-line access to information and, by tight integration with the phone's dialling, PIM and messaging capabilities, users can make calls, save and send information with one-click.
Silk believes that the SMART experience is just the start of what is a global market of operators waiting for the tools to help increase their data revenues. Silk is positioning the company for growth and spent the last year investing in sales, marketing, and business development, and making the transition from a purely technology company into a marketing led entity. However, the company plans to continue investing heavily in technology to expand what Silk calls its "unfair advantage" in the market.
Estimating they are at least two years ahead of their competitors, and recognising that operators and end users are ready to deploy and consume more sophisticated applications, Silk is expanding Action Engine in Europe and appointed Mike Kent as his European VP. Offices are now open in Britain and France with plans to expand into more countries. The goal is to demonstrate the system, to sell in to the top 20 telcos and target handset manufacturers, distributors, content providers, and enterprises.
 "Europe is ahead of America in mobile data services and it is a particularly attractive market since there are a small number of relatively large players as well as a large number of smaller operators. Although others may eventually get into the game, we have at least a two year lead and, with all the advantages of being a small company, we are very nimble and entrepreneurial and can therefore move fast. Lots of technology is developed by smaller companies which tend to execute products two or three years ahead of bigger players," explains Silk who was brought in to add value and take Action Engine into a public offering.
 "We are in a position of one: there is no real competition today although we expect it to happen because the realisation of the mobile dream is to put PC applications on phones."
Having appointed what he believes is an aggressive team of pre-sales, sales and support staff, Silk says the company aims quickly to gain as much market share in Europe, Asia/Pacific and North America as possible before the big players start coming into the market.
When it was first proposed, many people responded to this 'browserless', client server system with disbelief, scepticism and even contempt but, suggests Silk, they may well have to seriously revise their opinions as they try to play a catch up game with Action Engine's early gains in what he believes will be a significant market.

Priscilla Awde is a freelance communications writer

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Action Engine

Cerillion CEO, Louis Hall, explains to Lynd Morley why he believes the company is on the fast track to success in the highly competitive convergent billing market

Agility is the key

The concept of the lean, responsive organisation, flexible and adaptive to client requirements, may not be entirely new, but it is certainly experiencing a strong re-birth in the current telecommunications marketplace. It is not always an easy brief for an industry rooted in the conservative 24/7 service provisioning ethos to fulfil, but it is certainly one that, according to its customers, convergent billing specialist, Cerillion Technologies, is delivering.
Louis Hall, Cerillion's CEO, is undoubtedly keen to foster the image of an agile organisation, able to answer the complex and urgent needs of operators, but it is the testimonials of satisfied customers that ultimately give gravitas to any marketing claims. Chris Hall, Managing Director of Manx Telecom -- a long-standing Cerillion customer -- for instance, notes: "We telcos are being dragged into becoming much more customer centric and marketing focussed. That's why it's imperative that we have flexible systems. It's no good having a great marketing idea to stimulate sales if it's going to take two years to execute it.
"That's where Cerillion score so highly. They listen to their customers. They are invariably very constructive, very positive and, probably more importantly, they deliver, going from concept to execution very quickly."
Formed in 1999, following the management buyout of the in-house billing and customer care division of Logica, Cerillion provides carrier grade billing, CRM, interconnect and mediation solutions to fixed, mobile, IP and convergent operators worldwide. Having grown from an organisation of some 18 people, with a $4.5 million turnover, to a staff of over 140, and figures for the financial year ending September 2004 showing a 46 per cent increase in turnover to $17.5 million, Cerillion and Louis Hall are feeling, understandably, bullish.
"Certainly if an operator is looking for a small, flexible, responsive, customer focussed organisation that has a credible carrier-grade solution, we're pretty much all there is in that space -- most of our serious competitors having been merged into large corporations."
To date, a wide variety of companies, from Cable and Wireless, Jersey Telecom, Tele2, Manx Telecom and Tele Greenland, to Caudwell Communications, Maltacom, Go Mobile, Redstone Telecom and MobiCom Corporation have made exactly that choice.
In terms of its solution, Hall explains, Cerillion is very much focussed on breaking down the traditional paradigm between end-to-end and best of breed, and concentrating on what he terms a 'bundled components' approach.
He stresses that the Cerillion system supports any deployment model. The end-to-end model, for instance, offers workflow embedded as an integral part of the system, while the systems modules are all pre-integrated encompassing everything from rating, CRM and billing, through to mediation, point of sale and directory management.
"But we're equally comfortable with a mixed deployment project," Hall explains. "Our modules can be easily replaced by third party packages where desired to meet specific project needs, allowing for seamless evolution with no restrictions on an organisation's future growth. For Bulldog Communications Ltd, a subsidiary of Cable and Wireless in the UK, for instance, we installed our rating and billing modules alongside their own in-house Order Management System.
Add to these solutions, best-of-breed, managed service solutions, or indeed, bespoke developments, and the view of Cerillion as a truly flexible provider appears to hold water.
"I think that what we offer tells quite a different story to what the rest of the market is doing -- and that's partly why we're being so successful," Hall notes. He goes on to underline the fact that the success is based on a number of new contract wins (as opposed to upgrades of existing systems) -- including Cable and Wireless and Caudwell Communications in the UK, BTC in Bulgaria, and Gamtel and Gamcell in Gambia, the latter reflecting Cerillion's experience in both wireline and wireless markets as it undertakes to migrate more than 200,000 fixed and mobile subscribers from two separate legacy systems into the new convergent solution.
Based in Central London, with offices in the US and -- more recently -- Singapore, the company operates in both mature and slightly more 'emerging' markets, answering a wide variety of requirements.  But 'mature' Hall says, does not necessarily denote 'sophisticated'.
"In mature markets we are, in many ways, seeing simplification rather than sophistication," he comments.  "Many operators are really focussed on price and a fairly commoditised service. This is obviously partly a result of having been hit by the telecoms downturn, but it is also because there's a limit to the appetite among users for ever more sophisticated features."
He goes on to stress that, going back over, say three years, much of the hype generated by industry analysts and the press, stressing the promise of ever increasing sophistication of services through 3G, has not yet fully materialised.
"3G has, arguably, still not found a market," he comments. "A lot of the services available in 3G that are actually selling, are also available in 2.5G. Users are tired of hearing the 'next great thing' being continuously trumpeted, so the operators' focus is now much more on price and delivering the services customers actually want and believe they can get."
He points out, for example, that the success of the CPS (carrier preselect) and MVNO (mobile virtual network operators) models is based in their targeting of very specific segments of the end user base. 
"So, the CPS provider offers SME businesses, for instance, really neat packages that suit them perfectly.  The SME is not confused by the choice of some 40 different offerings, but can concentrate on what really works for him. Now that is getting close to the customer!"
The focus on price, of course, has led operators to pay considerable attention to their BACC systems, not only in terms of function, but also with regard to the cost of building, installing and running such systems. One solution, of course, is to outsource the whole procedure, taking up the offer of managed service billing operations from an outside provider.
Tele2 Ireland recently joined Tele2 UK in using Cerillion's managed service offering. The system is located in London's Docklands and is managed entirely by Cerillion staff. Bill Butler, CEO of Tele2 UK notes that by using this approach, the company has been able to launch the new Ireland service both quickly and efficiently.
Outsourcing the billing function is not, however, particularly widespread in Europe, despite the fact that it may seem an obvious solution for operators determined to concentrate on their core competencies, get closer to the customer, and keep a tight hold on the bottom line.
"There is a much greater trend towards outsourcing in the US," Hall comments, "particularly as billing is regarded very much as a commoditised service there. 
"The problem elsewhere is that the billing system is seen as the revenue generation engine, and if something goes wrong with that, it impacts directly on the bottom line. So there's an issue about control here.
"The other issue, of course, is security of data -- many European players still don't feel comfortable about giving up that information."
Certainly, given that many senior managers in telcos across Europe grew up in PTTS where so much of the data they held was government information, which they were charged with guarding, it is hardly surprising that they are still instinctively highly protective of their data.  In addition, data protection legislation in a number of countries across Europe specifically forbids the moving of certain data outside their borders -- so any managed service could only be run from within those countries.
Hall notes, however, that he believes there will be a lot more movement in the managed service space over the next three to five years.
"One of the great advantages that running the managed service give us is that we have the same experience as our non-managed service customers, dealing with the day-to-day operation. And that means that we're closely involved in how the system operates in a live environment. As a result of that first-hand experience, we can improve it to everyone's benefit."
This notion of using a specific development or experience to work to the benefit of all its customers, is a central plank of Cerillion's reputation among those customers. Manx Telecom's Chris Hall notes:
"I view Cerillion as a partner, not a supplier. I know a lot of people aspire to partnership with their clients, but for me, of all my suppliers, Cerillion are among the few that have actually achieved it.
"They do have an excellent product, but one of their great strengths is their people. They put real effort into understanding what we're trying to achieve, and they're very responsive. We have loads of good ideas, and we want to get them out to the market quickly, and Cerillion will find a way of doing it.
"Indeed, the resulting work will often go into their general release, so the whole club of Cerillion users is effectively working together, putting new innovations into the system, from which we all profit."
Having established a sure footing, both in terms of turnover and customer base, Hall sees his company moving increasingly centre stage to work with the larger operators. "In today's market" he comments, "productised solutions increasingly make sense for telcos. In cost-based organisations -- which telcos are now undoubtedly becoming -- there really is no option. This procurement model, which was always used by the smaller companies, is now moving up to the larger operators."
To date, the company has traditionally been focussed on Europe, but now has a growing customer base in the Americas, and is looking to the Asian market with the opening of its Singapore office.
"I believe we'll see a great deal of activity in the Americas, and particularly in the Caribbean, over the next couple of years," says Hall. "There are a lot of legacy systems out there, and a lot of billing vendors that have gone under, and that's left many operators high and dry. Certainly it's a highly competitive marketplace, with a lot of operators such as AT&T and Cable and Wireless establishing themselves in the region.
"At the same time, the growth in the holiday industry has meant that the corresponding growth in the roaming traffic is massive. There are operators running services in the Caribbean just for roaming -- because, obviously that's where the money is. We're currently in discussions to start work with three operators who are doing just that."
Setting up the Singapore office is a longer-term investment. Hall believes that while the region does have a lot of home grown suppliers, it is nonetheless a very brand conscious market, and the fact that Cerillion is building a solid brand in Europe is helping the company in Asia.  It is, of course, a potentially huge market, and Hall comments that while the 19th Century could be viewed as the 'English' century, the 20th as the 'American' century, the 21st will certainly be the 'Asian' century.
In the meantime -- back in the old country, or, at least, the old region -- Hall notes that differentiation in the telecommunications market will increasingly be based in marketing and branding -- given that everyone is offering much the same service. He points to the emergence of the re-seller market through the CPS providers on the fixed networks, and the MVNOs on the mobile side, and while he notes that this does not necessarily represent a power shift -- as all these providers have to sit on somebody's network anyway -- the resultant competitive pressure means that all these players must increasingly look to managing their relationships with customers, package their products and services effectively and, of course, bill for them.
"There are something like around thirty CPS providers in the UK alone, and the trend is moving into the European market. These companies are coming in with little experience of billing and customer care in the telecommunications environment, which provides us with a tremendous opportunity.
"At the same time, the growth in MVNOs is also great for us. These companies know exactly what they're doing in terms of establishing their brand, but they will look to outsource the network, billing, customer care and debt collection. So what you have at the end of the day is a marketing organisation. And that's commoditisation."
It will doubtless not have escaped Hall's attention that in a commoditised market, it tends to be the agile, flexible and responsive companies that win the day.

Lynd Morley is editor of European Communications

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