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Google Wave: Good News or Bad News for Carriers?

The recent launch of Google Wave generated a lot of attention, and for good reason. It’s recently crossed my path in a few different settings, and while the news is still fresh, there is a lot here for service providers to be thinking about. At a high level, Wave is Google’s entry into the real time collaboration space, and being Web-based, is poised to disrupt the status quo, not just for vendors, but service providers as well.

This column is not the place to explore how Wave works—I’ll leave that task to you, and you won’t have to look far to find detailed examples and step-by-step screenshots. Instead, I’m going to focus on some of the things that Wave is and is not, as service providers need to understand first and foremost whether Wave is friend or foe.

I’m going to begin by taking a step back to note that Google Wave is yet another innovation that comes not from just outside telecom, but outside the software world, where you might expect things like this to come from. What pedigree does Google have to disrupt spaces dominated by powerhouses like Microsoft, IBM, and even business software players like SAP? Very little—but that may actually be the point. Let me explain.

Much like Apple has come out of the blue to disrupt the smartphone market with the iPhone, Google feels it can do the same with enterprise communications because they are starting more or less from a clean slate. Innovation from within is always much harder, especially in this market where there are lucrative licensing-based business models, huge installed bases, and generations of hardened upgrades that institutionalize the established mindset around what enterprise software is supposed to be.

Google can easily step outside this big box and frame the age-old challenges of workplace communications around today’s technologies, challenges and behaviors. While the basic needs around getting things done in the workplace are pretty universal, the Web 2.0 world is simply a different place than even just five years ago. As the balance of power shifts from being network-centric to end-user centric, the value of communications technologies is becoming defined more by the applications than the underlying network capabilities. Both remain important, of course, but as this shift slides toward the end user, the players change, and service providers face new challenges to remain relevant to enterprise customers.

Wave represents a dramatic shift in the locus of communications from software to the Web, and with that, new dynamics around the key relationships enterprises need to maintain. By ratcheting up the velocity of real-time communications and collaboration, people can be more productive, but also less reliant on non real-time communications. Google Wave is essentially a open platform that seamlessly brings social media tools like LinkedIn or even Twitter into the business collaboration space, and as people find new ways to combine these elements, opportunities will open up for more innovation and new tools that make sense in this environment.

We still depend heavily on email and voicemail, but these tools are from a different time, and they are precisely the kind of silo-based applications that Google would not come up with today. Our needs are different now, and other tools simply provide more utility, context, integration and timeliness for getting things done. This is why Google Wave has its own protocol and why it has open APIs—they want to become the platform of choice for developers focused on real-time multimedia collaborative applications.

This is not to say that Wave will displace email or voicemail. These tools and the habits around them are far too ingrained in our behaviors, and they do still have utility. However, as we move to work modes that are more like Wave, their usage will decline, much like how the rotary dial gave way to touchtone. Both of these do the same basic job very well, but touchtone does it better, and because it could also do other things that people valued, it became the standard.

These developments impact service providers in a number of ways. First is the underlying idea that Google Wave strives to make every form of communication a real-time, collaborative experience. Life may not always work this way, but it also means service providers cannot afford to keep voice in a vacuum. We will always have lots of one-on-one telephone calls, but with Wave, voice is just one element in the collaboration mix, and as Web 2.0 services come of age, voice will derive new value from its ability to enable and integrate with other applications. Wave is very much about real-time communication, and since voice is the best real-time mode, it will have a central role to play in the success of Wave—but not simply for everyday telephony.

Another impact for service providers is simply Google’s market power. Aside from this, Google is at the front end of two key trends driving enterprise communications—open source and the cloud. Not only is open source important for what gets done on the desktop, but it forms the basis of Android, their mobile platform. It will not be long before Android-based smartphones can support Wave, and with that mobile collaboration will become very compelling.

Furthermore, Google is savvy enough to bring Wave to the mobile space in other ways if Android does not gain adoption fast enough. With 3G and 4G devices coming to market—particularly the iPhone (not to mention the enticing synergies of Apple and Google working together against Microsoft)—service providers need to recognize that mobility will soon become a key component of the next generation of enterprise collaboration.

Regardless of which mobile path unfolds, Wave makes Google an important player in the collaboration market, and by extension the communications market. Let’s not forget about Google Voice, Google Maps, search, Gmail, and even Chrome—all of which can be wrapped around Wave to make it a very powerful solution that everyone will have to respond to. Ultimately, all of this points to validating the cloud and the virtualization of IT. This presents some attractive options for IT decision makers, but also represents a future where the traditional role of service providers is diminished. This may not be news to carriers, but Google Wave really drives home the point that the rules of the game are changing, and they are not being written by the ones who invented the game.

By Jon Arnold, Principal, J Arnold & Associates

Jon is also co-founder of Intelligent Communications Partners that focuses on the smart grid space.

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