How subscription changed software business

While the world in general seems to converge on believing and trusting that software subscription is the best way of business in software, let me express my considerations.

The thing is, there are false premise and perception on what software is and what it's worth.

If not for that perception by users, that "there's nobody there just my device, and I have paid for device already, why would not that device 'grow' and become more and more capable, because you know, 'progress'...", then consumers and users would recognise that all software development is done by very clever people who deserve to be paid not less but maybe more than "that nice butcher guy who I go to each week".

Most of casual users have no idea nor interest to understand how much skill and training it takes to build neat useable software. They expect "things just to work".

Moreover, many modern application also require backend servers and associated hosting / hardware renewal and maintenance costs. These are even less visible to the unlearned and untrained eye of the "poi polloi", and building a viable business model has proven to be a choice - or, sometimes, bait-n-switch - between three possibilities: 

1. Delver for free in order to grow, then sell the company later to an internet whale
2. Charge users for usage or for a version of software
3. Monetize users (run ads, sell or share user activity data) 

Each of choices has its opponents and proponents, reality showed that (3) is the most viable, given the psychological and fiscal barriers for (2) and the temporary nature of (1). 

At the same time, there's a number of companies still successfully pursuing business model (2), namely Software Subscription.

In this article I would like to offer a novel variant of (2) that might improve its uptake by removing usability barriers and converting the model into a zero-click default with an optional user opt-out.

This can be done with help of fiscal intermediaries; enter Internet Service Providers.

Similarly to how Ebay and Amazon have "gamified" and "1-clicked" the purchase process on their sites, with the "zero-click attention payment" scheme it could be theoretically possible to charge users for usage, even before they have subscribed - provided that all prerequisites of the Architecture are met.

With payments, VISA and MasterCard act as fiscal intermediaries for Ebay.

With the "zero-click attention pay" (ZCAP) scheme I propose, ISP can act in the same way for any service that's compliant and is recognised by the ISP.

What are prerequisites for ZCAP to work?

• ISP keeps an extraneous pool of client's funds in order to be used with ZCAP every month; this can be pre-allocated and limited for client's surety, or post-payment
• Each ZCAP service uses a recognised network protocol that allows network-side observation of Time Spent by the user
• ISP performs network-side observation and real-time charging for used ZCAP services from pre-allocated pool
• Upon the pool exhaustion, ISP may raise a request to allocate another or upgrade the plan
• ISP may charge a percentage of ZCAP for the charging infrastructure support and maintenance
• Users do not need to subscribe to services as long as they have funds in the pool and service is ZCAP-compatible
• ISP may pass relevant user data to ZCAP service in order to identify and authorise the user
• ZCAP services may use standardised _SRV text DNS records to indicate ZCAP support and relevant API locations

What's in it for ISPs?

• higher ARPU
• increased stickiness
• bundling opportunities

What's in it for Subscription-based Services?

• higher usability
• zero-click opt-in

What's in it for the Users?

• potential to avoid user data compromise
• no passwords to remember
• unified billing
• capped billing
• pooled billing (if ZCAP agrees to share the same monthly pool with others)

The diagram for such a scheme follows.

6 things I will still miss in iPhone 3GS

1/ syncing over wifi (or bluetooth)
2/ video call
3/ haptics
4/ themes
5/ USB storage mode
6/ flash support

I will miss those, but (!) I will enjoy the rest!

Ah, and MMS support is quite lousy in 3.0... Just an attachment (no background color, no text formatting, no multi-page animations, no sound attachments). A half-hearted attempt, driven by mass-bickering more than belief...

What's next for iPhone?

I have been watching Steve Jobs giving iPhone lauch Keynote 2007 and it just struck me - he was talking about Visual VoiceMail as "just an example" of "what's coming", and he assured the public that "this is just a first fruit" of cooperation between Apple Inc. and AT&T. He underscored that point, obviously it was important for him.

"The innovative Visual Voicemail feature lets you view all your voicemail messages at once, then listen to them in the order you prefer. Use the Play/Pause button to control playback of your voice messages. The scrubber bar even lets you replay portions of a message you find hard to understand"

In fact, the telecom industry, as a whole, has not been fast to adopt IT-led innovations, and Visual VoiceMail is not an exclusion from that.

(Reality Check: Of those coutries where iPhone is sold, how many have VVM now?)

It does not take much observation power to see that user services innovation rate is much slower in telecom than it is in IT. This only adds to user's attachment to the Intenet and aversion to mobile operator "innovations".

Nokia takes on that with it's Ovi services suite. But Ovi is completely IP-based.

Is there a space for innovation of telecom-based services?
Will Apple take lead in that?

As if that "left hook" from Apple's honcho was not enough, there was a second hidden punch, an uppercut done by Cingular's chief Stan Sigman who went on stage and, incidentally, talked on the same subject - how Apple innovated [their sleepy] telecom kingdom.
At about 6:30 down the show he talks about partnerships with Apple, and at 7:35 he mentions VisualVoiceMail, ominously uttering "and I promise - you'll see more of that coming down the road".

Now, hold on. WHAT could they mean?

Well, I have an idea.
It seems so that right now we are in need of "3G saviour", a killer app which would be the differentiator, a watershed, between old-style 2G networks and the new ones, "innovated and reinvigorated with some help of Apple Inc."
Of course, I hear you say, internet via 3G is so much faster!
Well, but WiFi on a 2G handset can give you better speed, not to talk of a wired computer.

And what about VideoCalls? "Yuck!", you'd say, "who needs those?"

Well, sure, like nobody "needed" internet on a handset before iPhone.
Remember, when there's no market, there's opportunity to create one - exactly Apple's business.

I'm very sure that further innovations in mobile networks must focus on this single feature - mobile video call.

First of all, video quality must be improved.
Current 3GPP codecs were developed during the 90s era - they are just pure crap by modern merits, even when compared to YouTube's FLV (Flash Video) compression.
Ripping and replacing them for H.264 or some proper codec would be the first great step to improve usage rate.
Of course, next comes into play the high usability of iPhone user interface.

If it's easy to use and the quality/price is great - people will use it.

Why would you not make a "killer app" (and a cash-cow) out of that?
iPhone could do it to mobile internet usage, it can do the same revenue increase with proper use of video calls.

It also takes some consideration to notice that video calls are of greater use to long-distance (like Paris/Rome tourists calling Moscow home) and business users (telecommuting, making it a corp policy to call workers with video).
While the former group makes it harder to implement (all CSPs must be capable to handle the new H.264 codecs), the latter group is much easier to harness (as was demonstrated by the Windows gang) - they are policy-driven. And policies are centralized...

Next gen iPhone would need a separate frontal camera for video call.
I was surprised when I did not see videocall demo by Steve at Keynote 2008, along with launch of iPhone 3G. There must be more to do, to be ready for such massive roll-out. New standards, RAN upgrades, new mobile phones...

Could this happen this year? Probably not, "thanks" to reduced budgets for innovations, worldwide.
But I secretly hope it's still in the iPhone's+AT&T roadmap.
Maybe LTE version?

Wildcard Caller ID idea

Hi Experts,
I'm back with an idea of a little neat feature for Symbian (and possibly others) cell phones.
The idea is simple - to make user's life easier by recognizing (via Caller ID) groups of numbers matching a wildcard, not just the whole exact number of a Contact. Let me show you how.
You have Contacts in your cellphone's Address book. The phone matches the incoming CLI (Caller Line ID) of the caller to a number in the Contacts. But what if you want to identify a group of numbers?
This could be useful, for instance, to quickly see from which network (or city) you are being called, or from which company. It's no secret that many companies get pools of consecutive telephone numbers, so you could be quickly seeing from which company you get the call even without filling your Address Book with all employees' numbers.
Business customers may be interested in this feature. It would be a beneficial, value-adding feature for a platform, and a marketing differentiator, to provide a new type of contacts in the phone's address book - a template (wildcard) contact.

Usage example 1: Let's say I have the following entries:
+74955556666 Lena (BeeLine), +16457236546 John, +791687458755 Lena (MTS).

What if I could enter Address Book records like
+7916* MTS, +1* USA, +7903* BeeLine, +749512388## Forbes, +7812* St.Petersburg ?

Like in UNIX wildcards,
* (star) stands here for any number of any digits, # (mesh) stands for any single digit.

Usage Example 2:

I was 'phone-abused' by a real estate agency in Moscow - they have lots of employees in many offices, calling in from their office phones, all from the same pool +7495363####. I wasted lots of time answering their calls, telling them I "wrong number" and so on. They seem to have had wrong number of a client written down. Had I had this template contacts feature in my phone, I would have not need to squinch my eyes trying to see first digits and decide if I need to pick up.

Usage Example 3.

When late at night someone calls you from abroad on an important mission, it would be nice to see it's from another country (a word "Germany" shown) instead of trying to wake up and see if the first digits are +49.

Sounds good? Might be even better! (options)

"Exact match" means the current way of doing things - all numbers match.
"Wildcard match" means the new, group match.

A cellphone shows not only the exact match, but also the next worst match from a wildcard entries. And it could even highlight the part of incoming number that matches a wildcard, with a different color!

This gives a user, at a quick glance, a good idea of who might call, or where from, without the annoying deciphering of the caller ID by himself. If there's no exact match, the call history shows just the full number. If there's an exact match, and a worse match, the call history logs the 2 longest matches. 

Please tell me what you think.