It’s All About the Service – A Lesson In iPhone Loss

May 6, 2009 at 7:20 pm Leave a comment

Beth Vanni

Beth Vanni

OK, so it’s my fault.  I was at the circus with my kids, using  my new new Apple iPhone 3G as a camera (can’t miss those shots with the elephants and the Bermese Pythons).  It dropped out of my lap.  Either that or the Snow Cone vendor was eyeing it the whole time – that’s my theory.  Either way, it’s gone, and the last 24 hours of my life have not been the same!


Circus Casualty

Of course, everyone knows that the iPhone is only available in the U.S. through one exclusive service provider, AT&T.   What an OEM deal that must have been!   An old friend of  mine who works for Apple admits the Apple/AT&T deal was so rich that the royalties paid by AT&T to Apple are paying for a good chunk of the ongoing R&D on the iPhone technology.   Either way, I’m now addicted. Yes, I actually do use the AppStore for all those thousands of plug-in apps. And, I use the Safari web browser …. a lot. I never call 411 anymore. And I didn’t buy a Garmin, because most of the GPS functionality I need I can do on the iPhone. And finally, for the first time in my 25+ year career, I really am getting emails pushed live down to my iPhone and can actually be pretty productive when NOT in front my laptop. Amazing. This device can really make anyone from the 12 year old text-maniac to the 52 year old corporate sales executive both really productive and entertained at the same time.

What you forget though, is despite the sexy packaging and very slick marketing applied to this smartphone technology, all that functionality is really tied up in the Service Provider.  How they support the visual voicemail functionality, how the billing plans really lock you in to a pretty big annuity for AT&T, how much they charge for texting and all those regular commercials and text messages suggesting for new Apps and iTunes content is insidious. What’ s worse is that you can’t really get the iPhone on the black market or in unlocked mode very easily.   All roads lead back to service plans with AT&T.  And, to add insult to injury, try to take one of your many (I happen to have 5) old phones from other service providers and get them temporarily hooked back up to your old mobile number to tide you over during your withdrawal.  Can’t be done!   The SIM chips are all hardcoded to the Service Provider.  But, of course, they’ll sell you a refurbished unit or a pay-by-the-minute device for another fee. Outrageous. I could probably call my geeky tech cousin and have him walk me through how to unlock the device, but I’m sure I’d be the one white-collar suburbanite who actually gets arrested for this crime.

I can’t help but think there’s an analogy here for the evolving services business models with channel partners. How many of them are actually just going in and provided network uptime services on some company’s existing Dell or HP services and Cisco switches.   It’s the customer’s devices and they’re just the body-shop. Versus how many of them are truly delivering a complete service with front-end support, help desk, on-premise equipment and the managed service to keep it running.   How can partners create those same proprietary hooks between those racks of HP servers and Cisco switches to their own management and uptime services. Sure, the IT dept. could un-outsource the service and kick back in to manage it themselves if they had to fire the MSP. But, what if the management console to predict and manage uptime were ONLY accessible to the MSP and was locked in some way. What if the contract read that if the IT dept. de-coupled some part of the MSP’s service, they had to pay 1.5-2x the annual annuity service fee in order to do it. No roll-over minutes allowed here!

I bet there are thousands of billing, service and technical “hooks” to be created to KEEP customers on the managed service. No matter how sexy the customer’s IT guys think that new HP Proliant Quad Core rackmount server might sound in the spec sheet, the only way you can get it at $X per month of management service is through three national service providers. Imagine the day! Customer premise equipment truly reaches the status of total commodity, the service provider as utility deliverer is king, and making changes in services is about as easy or as frequent as having a date over the age of 60. For smart channel partners turned legitimate Service Providers, one can only hope that day is right around the corner. For IT users/consumers, it’s the movie “The Matrix” coming true…..a day that seems inevitable but somehow maybe not easier to live in.

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