The Computing Road To CPaaS
A little over a week ago, I had a lunch meeting with an analyst covering the CPaaS space. We were talking about how CPaaS is changing the way things have historically been done. His focus was on the change that needs to happen within the service provider business model. Service providers have historically sold add-on services to their customers. In the consumer market, it is internet, voice, television, etc. In the commercial market it is voice, internet, unified communications, conferencing, etc. His belief is that the business model that service providers have traditionally operated under has to change because of CPaaS. There is a full attack on service providers from a new competitor called the commercial CPaaS provider. What my analyst friend said was the service provider has to move from a business model of selling services to their customers to a business model that becomes a strategic partner to their customers. Not doing this will expose their customers to the commercial CPaaS providers. This new model is moving slowly because service providers do not want to change. But it will move.
For a discussion on this topic I refer you to this blog. It does a great job explaining the change that has to happen.
In the spirit of our change discussion I made a comment on how advances in technology (software and hardware) cause us to run on an application development hamster wheel. In other words the same stuff has to get done (purchasing, manufacturing sells, support, etc.) but everytime there is a major advancement in technology this stuff has to be redone. Replace the word “stuff” with anything you feel is right – it probably fits.
This is a story of my travels through the computing paradigm shifts and how we arrived at where we are today with CPaaS. Some of the shifts are in hardware but as the timeline gets closer to today, the shifts become pure software. I fundamentally believe that CPaaS is the next big paradigm shift in business computing. I am sure as you read this you will think there was a lot more that went on – this is my story. Raul Castañon-Martinez of 451, you encouraged me to write this blog so I dedicate it to you.
Mainframe Computing Model
I started out in the world of the IBM mainframe (dating myself I know). Computing for a company happened in very few places. In Hewlett Packard, the place I knew and worked in was called BAEDP (Bay Area Electronic Data Processing). We had a huge fishbowl of a computer room that was on a raised floor with air conditioning running underneath, a giant magnetic tape vault, 3 IBM mainframe computers and various supporting pieces of hardware (i.e. card readers, etc.). It was a total closed shop that separated the programmers from the operators. Outside the fishbowl sat an enormous number of COBOL application development personnel, JCL (Job Control Language) coders and system programming staff that actually customized the IBM operating system for each release. There was a desk that was dedicated to the IBM system engineer responsible for making it all work. Every job that ran on the IBM mainframe was billed back to the department that submitted it. If an application hit an ABEND (abnormal ending), the programmer had to figure out the error and resubmit. They typically received no more than two tries a day. IMS was the database of choice and the application logic was on punch cards (hence the card readers).
The mini computer revolution
This was a hardware shift that brought about new ways to develop core business applications. As antiquated as it seems today, minicomputers were amazing at the time. The entire world of computing was turned on its head. Now computing was pushed out to the operating divisions and their lines of business within them. Accounting had their own computers – and they sat on the floor with no air conditioning under them. Our finance minicomputers were maintained inside a room built of 5 foot partitions. I think only to keep people from tripping on the cables. We went from the IMS database to an HP proprietary network database called IMAGE, which forced business application re-writes. COBOL was still the standard programming language but programmers no longer submitted card decks. Instead we staged our jobs. We could test and code as often as we wanted. The freedom was intoxicating. I was actually freaked when I saw a programmer walk up to the mini computer system console and turn it into a CRT so that she could fix an error and re-stage a job without having to go back to her desk. There were no longer JCL coders or system programmers. Ahh…. the glory days. Wang disappeared off of the face of the earth – amazing fall from grace.
Next up – client/server computing
This was an advance in computing that took a bit of time to catch on. Unless you worked in an industry that leveraged NFS (Network File System) like CAD systems, it was not intuitive to many. This architecture offered a shared file system where an individual would check out a file, modify it and check it back in. As I said it was great for CAD software but not so much business computing. Sun was born under this paradigm. We (Sun) competed with Silicon Graphics and Altos. the NFS space was a bloody battle. Then this little unknown database company called Sybase decided to leverage this thing called RPC (remote procedure calls) because NFS was not suitable for business computing. Checking out an entire database to log a transaction and then checking it back in was a non-starter. Sybase figuring out how to utilize RPC to lock only the area of the database needing modification was revolutionary. It brought UNIX into the world of business computing. Oh yes, I know that everyone “thinks” that Sun invented client/server computing. Nope – it was Sybase. But for this technology to become widely accepted the software industry had to redesign itself and business applications, again, to be re-written. But it happened and UNIX won over proprietary operating systems. Database vendors had to re-architect their products and application developers had to understand buffering. Altos computers died and Silicon Graphics went on life support. Digital Equipment slipped into the Sunset. Who would have predicted this? IBM masterfully reinvented themselves.
Enter cloud computing
Just when you thought things would settle down, the internet was dropped on us. This was more of a software shift than a hardware shift. Sun had no idea what the real meaning of “the network is the computer” was. The operating system no longer sat on a single computer – it was spread across a network. Web servers and application servers were born and Java was launched. So many more moving parts that had to be considered to get the same job done. All of the parts were necessary to provide an environment that supported business computing. To operate effectively in this environment, software and applications really needed a total overhaul. And during this time the concept of open source was born. This period lasted a good number of years. It was during this time that SaaS (Software as a Service) arrived on the scene. Who would’ve ever thought that companies would not own the software they depended on but instead would subscribe to having access to an instance of software located in a room in the cloud that was dedicated to them? And advances in software technology began to replace purpose built hardware.
The CPaaS Revolution
The advancements of software technology replacing purpose built hardware and cloud computing laid the foundation for the software paradigm shift to CPaaS (Communications Platform as a Service). What once was a room full of hardware and switches now existed in powerful virtualized software. Forward looking software companies saw this brass ring opportunity and developed CPaaS solutions that enabled an entirely new market. They wrapped their platform with programmable Rest APIs that shielded the developer from needing to know highly complex telephony protocols. Add a service provider to move and terminate the network traffic and the solution is complete.
A great blog that discusses this in detail can be found here.
The paradigm shift in all of this is that now business application developers could engineer a new breed of application that combines traditional business logic with real-time voice, messaging and video. The world of telecommunications and enterprise computing merged. This new market birthed an incredibly exciting space called real-time communications. Companies like Uber, Lyft and AirBnB became Unicorns for investors.
But with every winner, there are also losers. To offer a complete solution, CPaaS providers struck deals with service providers to move and terminate messaging and voice traffic on their behalf. But the service providers found that to work with the CPaaS providers to move and terminate this traffic, they had to agree to take less revenue to play the exact same role they played prior to the CPaaS provider entering the scene. And to make matters worse, the CPaaS providers have moved beyond the Ubers of the world. They are now targeting the service provider’s enterprise customer. And when they succeed in attracting an enterprise customer, they bring their service provider partner with them, leaving the original service provider with less traffic. As more applications are built, the original service provider loses control of its customer. So lower revenues if they partner with a CPaaS provider and evan lower revenues if they don’t.
All is not lost because it does not have to be this way. There is a way for service providers to protect their enterprise customers from this new group of commercial CPaaS providers. If the service provider works with Telestax to CPaaS enable them (takes around 8 weeks), they become a CPaaS provider themselves. Their enabled CPaaS platform is highly competitive to the Commercial CPaaS products. Once enabled, they immediately work with Telestax to launch a “Protect My Customer From Being Poached” campaign that has proven to work. We know this campaign works because we are already working with our service provider partners to help them protect their enterprise customers against commercial CPaaS providers. Service providers already own the relationship with their enterprise customers. It is now time to circle the wagons around their enterprise customers, become a strategic partner and protect these relationships.
Click here to get the details of our “Protecting Enterprise Customers From Being Poached” campaign. We are expecting you.