SMS pioneer Joe Cunningham: ‘Mobile operators need to shake their inertia’

31 Mar 2016

Joe Cunningham helped mastermind the first commercial rollout of SMS. Now he believes mobile networks can embrace DevOps to stop OTTs eating their lunch.

Having masterminded the world’s first commercial deployment of SMS and spearheaded notable Irish tech success stories from Aldiscon to Apion, Aepona, Accuris and Ammeon, Joe Cunningham is as passionate as ever about the future of mobile, and especially about autonomous vehicles.

When I talk to Cunningham for the first time, it’s as if I almost know him personally, having written about each and every one of the companies he’s been involved in over the past 20 years. I almost kick myself when the first question I ask him is why every company begins with an A. His answer is worth it: “To be at the top of phone books and trade mags.”

Cunningham and his oft-collaborator Gilbert Little’s role in the evolution of the mobile phone industry worldwide has to be acknowledged, mainly because much of it is still pretty much recent history.

A self-described “lapsed engineer” Cunningham started Aldiscon in the 1980s to focus on doing project work and interpreting the emerging GSM standard for telecoms companies.

One of those standards was SMS – short messaging service – which was first conceived by Friedhelm Hillebrand and Bernard Ghillebaert in 1984. While Vodafone claims credit for sending the first-ever text message “Merry Christmas” in 1992, the first commercial deployment was by an Irish company called Aldiscon with Telia in Sweden in 1993.

“We spent two years trying to sell our SMS technology and when it was finally deployed some 10,000 messages were sent in the first month, growing to half a million within six months.”

Within a few years of the commercial deployment of SMS, Aldiscon was sold to Logica for around IR£57m in 1997. Other acquisitions of start-ups Cunningham was involved with followed: Apion was bought by two years later in 1999 in a stock swap deal worth $239m and Aepona was bought by Intel for a rumoured $120m in 2013.

Cunningham is currently executive chairman of Ammeon, a fast-moving Irish tech firm focused on the DevOps space that recently announced 100 new jobs for its O’Connell Bridge headquarters in Dublin. He is also a non-executive director of Sean O’Sullivan’s Cork venture capital fund SOSV and San Francisco ride-sharing venture Carma, which is beginning to focus on opportunities in the self-driving car space.

Along with the other mobile mafia of the 1990s, including former Vodafone Ireland CEO Stephen Brewer, he will be speaking at an upcoming Telecoms Graduate Initiative (TGI) event on 11 April in Dublin, which is focused on commercialising telecoms research.

Catching a rising star

Cunningham said that as we hurtle towards a world of 5G, similar opportunities are emerging for a new generation of entrepreneurs to grasp, just as he and Little grasped opportunities in the 1990s, initially with SMS.

“I left DIT Kevin Street in 1984 as an engineering graduate and went to work in the UK because there just were no jobs in Ireland. At that time, there were hundreds of telecoms equipment firms worldwide. Today there is just Ericsson, Huawei and Nokia.”

‘Competition makes you good, it sharpens you and makes you good at what you do’

It was while working at Nortel that Cunningham met Gilbert Little and started Aldiscon as a software business. “We started deciphering the emerging GSM standards and at the time Ireland was an exporter of graduates and we wanted to change that. We were doing lots of projects for telecoms companies like Cable & Wireless and we tried to convince them about our SMS technology but they didn’t see the product potential,” he said.

However, they weren’t deterred and Cunnigham explained how they cornered the ability to send and receive text messages and demonstrated this at trade shows in Geneva in the early 1990s.

“All these companies that were about to become huge – Vodafone and O2 – were there then and they were tiny, with only 30 or so people each. In 1993 we deployed the first commercial SMS system and the rest is history.”

Cunningham recalled how prior to its IR£57m merger with Logica the company was a start-up that was running out of money and existed mostly by bootstrapping. “We ended up building our competitors’ products for them, including a rival SMS system to our own for CMG. To some extent you can’t be successful in a market unless you create a competitor. If Google wasn’t there with Android or Samsung wasn’t in the market I guarantee you we would have much more boring iPhones.

“Today’s telcos are so preoccupied with winning on network speeds and footprints that they haven’t bothered to create rival offerings to the over-the-top (OTT) players like Google or Facebook. There is a huge opportunity in this waiting to be exploited. Competition makes you good, it sharpens you and makes you good at what you do.”

‘To some extent you can’t be successful in a market unless you create a competitor’

Thinking back to the pivotal moment in 2007 when Apple launched the iPhone, Cunningham said the mobile market was ripe for disruption because mobile operators and device manufacturers were flush with success but were allowing innovation to flag. Inertia was everywhere.

“The mobile companies had lost the plot. Nokia had the N97 in 2007, which was superior to the first iPhone in terms of wireless networks, cameras and more, but the iPhone was easier to use and allowed people to do more things and, as a result, the iPhone won. It’s about what people need to be able to do, not just the speed of the processor or the network.”

By the time Cunningham and Little sold Aldiscon to Logica they had amassed a customer base of more than 150 network carriers around the world.

But in Ireland, they had only one out of the three mobile operators active in Ireland at the time, Digifone (later O2, and now Three).

“You could say we were a prophet in our own country. We had all the global networks but for some reason we couldn’t break into Ireland. But that was a blessing in disguise because it made us more globally oriented. We spent most of the 1990s in the air and wouldn’t think twice about heading down to Sydney for a day trip to meet customers.

“By 1997, our systems, when you include the ones we built for our rivals CMG, were facilitating 90pc of SMS messaging in the world.

“We really spent the 1990s evangelising text messaging. The driver for us wasn’t money or being an entrepreneur, but the interest in designing and delivering a product, just the excitement of doing something new.”

Many of the cohorts of young executives who cut their teeth at companies like Aldiscon, Apion and Aepona did so through Cunningham and Little’s drive to create products that facilitated change, from SMS to wireless application protocol (WAP), which were forerunners to the ubiquitous data we enjoy on today’s cloud-connected devices.

“I reckon about 5,000 people came through our doors in Ireland, the US and the UK during the Aldiscon and Logica years,” Cunningham said with pride.

Generation next – where DevOps will rule innovation in a 5G world

The next “A” in Cunningham’s jotter is a company called Ammeon, which specialises in IT-based transformation projects centred around the crucial DevOps ethos that is the hallmark of today’s born-on-the-internet giants.

Ammeon employs 200 people in Dublin and has recently announced 100 new jobs.

“Simply put, we give companies the ability to deliver innovation through a DevOps workflow. Your typical enterprise today can deploy a new service within nine months. A few years ago it would have taken several quarters to implement change or a new product or feature.”

Cunningham pointed to companies like Twitter, Facebook and Netflix, which are deploying new products and services in fast iteration.

‘It may sound like a trivial development, but DevOps is the biggest revolution in software in the last five years’

“Netflix does 500 deployments a day and no one sees it. DevOps means that you can have a system of lots of little ideas that can be iterated with speed. DevOps links the whole chain together; from the guy who has the idea to the architect of the software to the deployment online or in apps.

“The best way to think about DevOps is you take the model of a Toyota factory in the 1980s and push that ethos into software, constantly reiterating and automating processes. You can do iterations with speed, test how half a percent of customers might use a new feature before you quickly expand it to 20pc or more of your customers. It means you can move features really quickly.”

Cunningham believes the larger operators like Vodafone and Telefonica are falling behind the speed at which OTT players like Facebook and Google can iterate.

“They are working in 12-month cycles, even for new tariff plans, while their OTT competitors are introducing changes weekly, daily, even hourly.

“What we are bringing to organisations, not just telcos, is the ability to think about features, explain them as a story and do the workflow through DevOps and automate the backend. This would enable operators to test new release plans, new tariffs, on small groups of customers before releasing broadly to the market.

“It may sound like a trivial development, but DevOps is the biggest revolution in software in the last five years.”

He cited rapid developments like Facebook integrating KLM ticketing into Messenger or the relatively smooth and bug-free introduction of Windows 10 as how DevOPs is changing the game.

Start-ups, stay hungry

Cunningham admitted that Ireland or the UK can be a school of hard knocks for entrepreneurs and start-ups, unlike Silicon Valley, where money is in abundance and a large consumer market is right on the doorstep.

“The difference between today and when we started is that finally the colleges are producing large numbers of STEM graduates. And, finally, we are beginning to once again feed the pipeline of jobs from the bottom.

“There is also more money around for start-ups. But what sharpens you in Europe vs Silicon Valley is you really have to have a credible idea and prove customer engagement before you get any funding, that’s the difference.”

“In Silicon Valley a wild idea will get you money, but here in Europe you have to have customers. It’s not that different to the 1980s and 1990s, if you want money you work for it.”

Cunnigham also said that start-ups in Europe tend to have a different focus to those set up in the US.

“If you are an American company, you can focus on the domestic market and grow your local base before thinking about going international. But for a European company the starting point isn’t the tiny local domestic market, you have to be exporting from the get-go, you have to be a natural exporter creating products that are localised to the markets you are targeting. That’s a good discipline to have.

“As a result, European tech companies produce excellent products tailored for global consumers. The UK suffers a little from what the US suffers from in terms of a large local market, but if you look at the rest of Europe there is the language barrier to overcome and that makes start-ups from these countries fight harder.”

The near-future of a world where car ownership could be history

As well as his involvement with Ammeon, Cunningham is a non-executive director of SOSV and San Francisco-based tech company Carma, which is making waves in Silicon Valley through ride-sharing but also a new service that lets users simply pick up cars on the street.

“It started in Kinsale and today we have more than 400 cars in San Francisco with comprehensive telematics that can be booked, unlocked and returned thanks to clever smartphone apps. It’s also interesting as a real-world agile/DevOps project. In just a few weeks from having the idea these cars were on the streets thanks to agile software development practices.”

Cunningham said the company is eagerly awaiting the mass introduction of driverless cars because the idea of car ownership will shift from consumers back to service providers like Carma or Uber.

‘The ubiquity of data is going to be incredible and DevOps is why Facebook has gone from looking at mobile just two or three years ago to deriving most of its revenue from mobile’

“I’ve always had an interest in the application of technology, particularly how it fits the consumer and where the market is going to be in five years. Today, everything is in the cloud, data is becoming ubiquitous and the price of data is falling.

“There are now 1bn people on the planet connected to 4G, that’s incredible. Farmers in India who 10 years ago were sending prices for crops by SMS are now trading online from a field.

“The ubiquity of data is going to be incredible and DevOps is why Facebook has gone from looking at mobile just two or three years ago to deriving most of its revenue from mobile.”

Cunningham’s call to action for mobile network operators is to learn to start working together and embrace DevOps principles.

“It’s all down to speed from the conception of an idea to the delivery of a new product or service. The traditional telecoms world has allowed inertia to creep into the system and it takes a long time to get to delivery.

“DevOps is breaking that pattern and now brands are leveraging their brands. Everyone, that is, except the network operators. They have a chance to do interesting things, do clever things digitally with their tariff bundles, their messaging systems, turn their traditional billing systems into e-commerce currency,” he concluded.

“The network operators own the networks and they own the billing relationship. Why on earth are they ceding the advantage to OTT players?”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years