Tridgets: A New Opportunity for Service Providers?

In recent months we have seen Apple introduce its iPhone in conjunction with AT&T and Google; Amazon introduce its Kindle book reader that uses the Sprint wireless network for connectivity; Eye-Fi, a startup company, come to market with a card that uses Wi-Fi to download images from almost any digital camera to a choice of photo sites on the Web; Google introduce Android as a development platform for mobile devices; NBC and other TV networks make their shows available on the Web; and Netflix announce a deal with LG Electronics that will let customers view downloaded movies on their TV sets.

This level of partnering indicates that something new is afoot in the consumer electronics industry. And I would submit that Trivergence is the underlying force driving much of this activity. Trivergence, a term I introduced at the 2005 Accenture Global Convergence Forum, describes the interaction of Devices, Data and Controls in a networked environment. Triverged devices, or tridgets as we call them, are not self-contained entities but depend network resources for their functionality.

The iPod is an example of a tridget. It gets its data – music and videos – from the Web and users control their experience through the iTunes SoftPanel.

To find out more about tridgets and Trivergence, read our Trivergence blog.

The iPod has been a success for Apple, and the company has leveraged this success by extending the iPod’s trivergence-based architecture to the iPhone and the rest of its product line. Apple has clearly demonstrated that devices, data and controls (when fully networked) can produce an outstanding user experience.

But the tridget opportunity is too large to be dominated by Apple or any other single company. Dr. David Clark, one of the architects of the Internet and now a professor at the Massachusetts Institute of Technology, has predicted there will be a trillion networked devices in 15 to 20 years. Such a figure suggests that almost all electronic and electric devices, maybe even down to the light bulbs, will evolve into tridgets.

This evolution is already under way. The current market focus on The Three Screens – a big one on your wall, a medium one on your desk, and a little one in your pocket – is a device-centric way of seeing the world. We are starting to think of the screen as the entry point to the Internet, rather than a software portal such as Yahoo!.

One of the assumptions underlying the Three Screens concept is that any screen has full access to all our digital assets – files, content, applications. This does not mean that some devices are not better at certain tasks than others.

Unless you were a castaway on a desert island you would probably not choose to read a digital novel on a device with a one-inch screen. A much better choice would be the new Amazon Kindle, a tridget engineered from the ground up to provide a pleasant reading experience. And sure, you can take pictures with your mobile phone, but people are still buying stand-alone cameras in record numbers.

In fact, the digital-camera market is growing at about 15 percent per year—perhaps in part because the camera has better photo manipulation controls than a phone, something especially important as consumers use networks and websites to organize and share photos. Different devices serve different purposes, even if they look similar on the spec sheets.

So three screens may be a great place to start, but remember, it’s only the beginning. At some point people will be interacting through dozens of screens as they go about their daily lives. It would not surprise me if Amazon built a telephone capability into its book reader, or if Canon built a media viewer into its camera.

What does all this mean? Put simply, that tridgets are a great opportunity for the communications industry. In my view, tridgets pose the sort of scale challenge that can only be addressed by the companies that own the network infrastructure and have the power to optimize it. Here are some specific industry opportunities and challenges when it come to supporting the flow of data and communications across the three screens and, eventually, across all digital devices.

• Content delivery – Traditionally, network operators have left content distribution to third-party Content Delivery Networks (CDNs). However, these companies are motivated to optimize their own costs, not the actual transport costs − and Accenture studies show that the carriers are losing hundreds of millions of dollars annually on these services. If only to protect their own financial interests, network operators will have to become more involved in content distribution to improve operating efficiencies.
  
  
• Open billing systems – One reason for the current popularity of advertiser-supported business models is that companies such Google, Microsoft and Yahoo! do not have an easy way to bill end users of their services. But some services, such as specialized information services and mobile banking, lend themselves to a user-pays business model, and this is an area where the network operators could shine. They already possess highly sophisticated billing systems, and now have an opportunity to extend these systems to all comers – with the proper security, of course.
  
  
• Customer support – This is another area where the network operators have extensive facilities that could be opened up to other companies. Device, Internet, software and content companies recognize that more complex products and services demand customer support, but feel constrained in their efforts because customer support lies outside their core capabilities. Carriers have the opportunity to transform customer care from a cost center to a profit center. By opening up their customer relationship management (CRM) processes and technologies, call center outsourcing, customer insight and Web support, carriers could support a broad range of products and services for both the enterprise and consumer marketplaces.
  
  
• A channel to serve the emerging world – If shortcomings in billing and customer support are problems in the developed world, they are deal non-starters in the emerging world. Any device, Internet, software, or content company trying to orchestrate a global rollout in today’s environment faces overwhelming difficulties − put simply, too few resources and too many points of contact. Network operators will need to develop robust strategies for extending their developed-world sales channels into the emerging world.
  
  
• A development environment – Part and parcel of leveraging carrier resources such as content delivery, billing and customer support is attracting software developers. Traditionally, network operators are regarded as difficult to work with, and as having development tools that are off-limits to outsiders. New development platforms such as Google’s Android are now facilitating development at the device level, but new systems are needed to extend the development environment to the rich resources embedded in carriers’ networks.

All these new opportunities are being driven by tridgets − devices that depend on the network for their data and controls. This transforms devices from stand-alone entities into cogs within a much larger system, a system that has the potential to deliver a much more powerful user experience than any stand-alone device. If you take Dr. Clark’s prediction of one trillion tridgets seriously, you are looking at a massive market. The modest assumption that each tridget will generate US$5 per year in revenue from its purchase price and associated services, translates into a U$5 trillion business! I take this prediction seriously, and I see a compelling future.

To find out more about tridgets and Trivergence, read our Trivergence blog.

Andy Zimmerman is Managing Director, Communications Industry, Accenture To find out more about tridgets and trivergence, check out Andy’s Trivergence Blog.