There is much talk (and investment) in messaging platforms of late and their value in a business context. There is lots of hype around Bots and Artificial Intelligence (AI), too much hype in my opinion, and totally confusing to the business’ I have spoken to. We’ve had Facebook acquiring WhatsApp (and both are building business capability into their platforms), Snapchat floated at an exorbitant valuation of $34bn (albeit the market seems to have readjusted and is eagerly awaiting the first results call in two weeks), Apple has announced Business Chat and WeChat dominates the Chinese market. Even Google have entered the business fray with Google My Business, although many would argue their messaging strategy has been a complete mess in recent years with Allo, Hangouts etc.
It seems like we are moving to an era whereby the owners of the copper (or fibre) in the ground will no longer dominate our means of communicating with each other and our service providers, the organisations we buy products and services from. So who will become the American Telephone & Telegraph Company of our day and what are the trends we should see developing in the months & years ahead?
What is not clear though is how will these messaging platform providers will monetise their offerings. When the telco providers roamed the world their commercial model was clear. Apple is at heart a hardware company, with iMessage being used as a mechanism to make the iPhone much more sticky and help drive sales. Apple and Facebook are essentially advertising companies – so how will they use messaging to drive revenue and sales – perhaps insights into our conversations will increase their ability for much more targeted advertising?
In my view I see three major trends developing:
We already have over 15 different platforms, with new platforms springing up on a regular basis. However, the bigger players will acquire on the basis of demographics, geography and unique functionality (think of Snapchat’s 10 second movie/content creation). So I think we will see much more of the Facebook acquiring WhatsApp approach and my guess, we will see Snapchat being taken private. WeChat have had limited success with forays into the west, but don’t be surprised if they make a move for one of the established players.
Our ability to message over an Internet Protocol (IP) platform will become like a utility service (just like the ubiquitous telephone line). The messaging platforms will need to provide core capability to compete, table stakes if you like. Now, don’t confuse this with the telecoms providers who focused on service level as their core offering. In the new world, offerings like being able to process payments in a Payments Card Industry (PCI) compliant manner with an integrated payment platform will become will become the table stakes. WhatsApp have been very secretive on their plans for their business edition and how it differentiates from Facebook messenger. My guess, they will build functionality akin to Apple Pay into their platform.
To counteract the downside of becoming a utility the platform providers will need to introduce ‘sticky’ functionality. Recently Facebook have announced they are introducing basic Natural Language Processing (NLP) to their platform. To me this is the start of the process to ‘wed’ organisations and developers to their platform i.e. lock them in. My guess, you will see a lot more of this in the months ahead with ‘lock-in’ strategies developing beyond the size of their underlying subscriber base.
So who will become the modern day incarnation of AT&T? Well I guess that’s open to opinion! It’s an interesting time and an exciting space.