The New Face of Verizon

Last night, while enjoying a beer at the swank rooftop bar of 230 5th, I found myself in a lively discussion about Verizon's seemingly new attitude towards openness. I was speaking with an executive of BilltoMobile, a company that made headlines earlier this year when it announced a relationship with Verizon Wireless. Through the agreement, developers of online games and communities are able to collect payment from users, that are also Verizon Wireless subscribers, on their monthly cell phone bill. At the time, the news was surprising to many telecom veterans (myself included) because Verizon's reputation for protecting its ecosystem is legendary (especially when customer touch points are involved).

Flashback to November 2007, when Verizon first announced plans to open its network. Back then, Verizon was in a pitched battle with Google for control of the 700Mhz wireless spectrum, and industry watchers saw it as a conciliatory effort to appease regulators and public perception. The Wired article describing the move was appropriately entitled 'Pigs Fly, Hell Freezes Over and Verizon Opens Up Its Network -- No, Really'. In fact, few believed that they would actually follow though.

Yesterday, us Doubting Thomases were forced to take another bite of crow when Verizon announced the availability of Messaging, Network and Location APIs at the Verizon Developer Conference in Las Vegas. And, like the deal with BilltoMobile, the APIs are being provided by third party specialists . Smart move! It takes a hungry innovative start-up to understand the needs of mobile developers. Arguably the most valuable of the APIs will be network based location provided by LOC AID technologies (unlike today's location services, which are driven by GPS from the phone itself, Verizon location will be fed by the network).

The real surprise for me isn't that cellcos are opening up (not to blow my own horn, but I first called the trend in August 2006 on this blog), but that Verizon is leading the way. I would have bet dollars to donuts that Sprint would get there first. In any case, I'm not complaining.

It should be noted that similar attempts by major telcos have not been wildly successful. BT's groundbreaking Web21C initiative, the first attempt by a telco to open its core network to software developers, is struggling for traction. After launching to lackluster demand, BT scooped up Ribbit (a Silicon Valley start up that had amassed a large developer community around its telephony APIs). More than a year later, however, Ribbit developers have yet to find a ready market of consumers.

The lesson to learn from BT is that you have to prime the pump from both sides: you need an active developer community to turn APIs into compelling apps, and you need a vibrant marketplace to put the buyers and developers together. For Verizon's gambit to work, it must now follow through with appropriate incentives to the mobile development community. For starters, it is encouraging developers to submit apps to its newly rechristened VCAST store. But just in case the second time around is not a charm, Verizon will also allow API users to sell their wares wherever the market exists (such as the Android Market and Blackberry App Store).

For once, I'm rooting for Verizon.