This article will analyse the market, map the start-ups shaping it, and discuss its future.
Before we do all that, let me explain what we define as a “scouting sprint”.
That’s the TL;DR of Wayra UK’s approach to scouting. It’s one we’ve forged through a decade’s successes, failures and learnings at the forefront of corporate innovation.
The goal is to achieve a ‘win-win’ outcome for both the corporate and startup (we like to envision them as ‘elephants and gazelles’), which is easier said than done.
It’s not enough to scout a startup that’s demonstrably fantastic, with great numbers that ticks all the boxes. If it’s a bad match for the corporate, it might be a “good” startup, but not the “right” startup.
To find the right match, it’s essential to understand the corporate, its pain points and requirements, and scout startups that actually address those.
We began using scouting sprints, bringing the methods of Agile product development to scouting, for two main reasons:
1: It’s better for delivering innovative opportunities to Telefónica in line with its strategic innovation goals
2: It’s more effective at identifying business solutions that are demonstrably better than incumbents
Our goal is to deliver impactful innovation to corporates. A roadblock to achieving that is overcoming the prevailing perception that corporate innovation doesn’t go beyond proof of concept. Many see innovation as delivering more PR opportunities than tangible results.
To curb that misconception and establish our approach as results focused, we start our process by asking the question “what’s the real business impact?”.
We use a three-stage process to bring structure, accountability, and accuracy to the scouting process.
We start the process with a dedicated workshop that seeks to unite and align stakeholders, and to identify pain points and potential new business opportunities. The goal of this stage is to establish a clear idea of what the corporate is looking for, what problems it wants to solve, as well as a technical or commercial brief.
In the following weeks, we’ll source the market for solutions that match our brief and the previously-identified needs of the corporate. This is sharply different from the haphazard back-and-forth process that seeks to match reasonably well-understood startups with poorly-understood corporates. Clarity on corporate needs allows us to do this part both quickly and comprehensively.
We bring a list of viable and aligned solutions to the stakeholders in our ‘scouting committee,’ in which they vote to choose a final list of contenders.
WhatsApp took our industry by storm and made us re-think how we view and implement innovation. It shifted Telefónica’s approach from following industry trends to striving to be a pioneer of the ecosystem.
By virtue of that strive to drive innovation, our team was introduced to the service platforms and voice team from the Telefónica Chief Technology Innovation Officer (CTIO) unit.
They were looking to identify new communication use cases that could enhance current conversational experiences.
Relevant technologies applicable to the thesis included: 5G, with its radically accelerated data transfer; VR, AR and other XR technologies; AI and machine learning, and more involved options like haptic control, volumetric display, or 3D holograms.
The telecommunications ecosystem is rapidly changing as new technologies become available. Ever developing, the market can be difficult to grasp.
The insights outlined below focus on the business opportunities in the space, rather than the technical perspective.
IP Communications doesn’t just mean VoIP or IP Telephony — voice calls over IP rather than conventional phone lines. These technologies use packet-switching technology identical to any other internet traffic, and just treat voice audio as data.
Originally developed in the mid-1990s by VocalTec in a bid to save on international call costs, they’re now ubiquitous; a multi-billion-dollar industry with an estimated 3 billion users, and one that grew nearly 25% in 2020 alone. They’re equally happy handling images, documents and more, so most VoIP tools, from Skype to Zoom to WhatsApp, incorporate all those features, plus a chat channel.
Because of these factors, the market for VoIP features that 4G can support is already largely spoken for, with little scope for innovation. However, there is scope for use cases beyond pure data transmission, and for those that aren’t achievable without 5G technology.
We expect that some of these will be in the form of traditional 4G VoIP offerings, radically improved by the added capacity of 5G. Video, often now of relatively poor quality and continuity, could be significantly improved; AR and VR services could be much more complex and add much more value.
In an effort to map the space and the start-ups shaping it, we identified both the industries which are being or will be most impacted by the arrival of these communication technologies, and the most prominent of those technologies.
The industries we identified are:
AR and VR technologies constitute a significant development in enterprise communications. As these technologies develop, the barriers between remote and in-person communication begin to blur, and the opportunities for virtual enterprise communications will keep growing. We should look for use cases such as collaboration in virtual spaces, remote workspaces, facilitation of virtual meetings and events, immersive workflows and training, and more.
Healthcare is often an early adopter of new communication and data technologies, and it’s forecast to be the sector that’s most changed by XR and haptic technologies over the next 12 months. The future holds some of the most revolutionary and immediately-recognizable use cases, like remote surgical operations and virtual-environment medical training. However, there’s also potential for totally novel solutions that enhance the whole industry and improve patient experience in heretofore-unforeseen ways. These include remote patient monitoring, innovation in clinical research, augmented surgery, augmented diagnosis, virtual collaboration between doctors and between healthcare staffs, and a vast number of other use cases facilitated by the confluence of 5G-powered technologies.
The education sector is typically less eager to embrace innovation than healthcare. Indeed, education has been relying on the same suite of technologies for the best part of the last decade. However, there’s always the need to maintain relevance and keep up with the expectations young people form as consumers. iPads in schools, Chromebooks and the ‘1:1’ (one device per student) push, and the increasing utilization of smart TVs and digital signage in schools show this. Schools relying on their social media streams, email, and even VoIP tools to communicate with parents, also demonstrates the education sector changing with the times.
The first of the new 5G technologies to find a home in education is XR, which is already being used by some organizations to assist with student engagement and knowledge delivery. XR offers immersion into alternative realities, letting students safely and easily do things that would otherwise be prohibitively dangerous or expensive. Remote schools with virtual classes can explore the world virtually with Google Expeditions, explore human biology with Microsoft HoloLens, or even experience the Berlin Blitz of 1943. Obviously, the increases in resources used in the development of this technology needs a corresponding increase in IP Comms bandwidth.
The gaming and entertainment industries are also beginning to offer their users immersion in virtual spaces, in a similar way to education. The whole experience is rendered more engaging and real, allowing real-time interactions between players in the same virtual environment. (The appeal of this approach can be assessed by looking at the player numbers for Massively Multiplayer Online Roleplaying Games, or MMORPGs, such as Final Fantasy, World of Warcraft, or the emerging Lost Ark.)
A noteworthy use case was the recent Marshmello concert, a virtual event for players of MMORPG Fortnite that was livestreamed (‘attended’) by nearly 11 million people. Within a year, rapper Travis Scott also performed a virtual concert, reaping both ticket sales revenue and the physical and virtual merchandise sales that accompanied it. As celebrities like Ariana Grande and Justin Bieber consider getting on board, it looks as if virtualized performances will be increasingly common in the future.
These industries are grouped together because, while very different, they share similar use cases. Initially, these will include remote expert support, virtual collaboration, and virtual training. Remote expert support includes the ability to access expert support via live video, audio, telestration, and augmented content. Virtual collaboration refers to collaboration in virtual environments using digital twins and the full suite of VR/AR and VoIP communication tools.
Finally, virtualized communication and training allow for training solutions that involve virtual environments. Initially, these will likely focus on moving extant training content into virtual environments, meaning trainees can access lectures and demonstrations asynchronously. However, the next development is likely to be the ability to practice skills in virtual environments, with feedback including automated assessment, instructor feedback and even haptic feedback. Training like this is likely to produce far better results than purely passive, synchronous in-person training, and to be more cost-effective.
These are the industries that we found to be most impacted by emerging new communications solutions. However, there are a vast number of other industries that are currently at still-earlier stages of adoption but that will also benefit from these new technologies as the market matures. These industries include maritime, insurance, retail, real estate, tourism, and many more.
The market for VoIP beyond voice technologies was US$390 million in 2018, and forecast to hit US$5,840.7 million by 2026. Depending on the sweet spot of the various technologies involved, we can expect to see escalating adoption as prices fall, encouraging consumer uptake and mainstreaming the technology. Enterprises will both lead and follow, with a larger second wave of businesses moving into these new ways of working, training and operating. These predictions hold good, regardless of the fate of Meta’s Metaverse, though a success there would likely accelerate the process significantly.