ROI Customizer – The Leading Edge of ROI Modeling

Clients have always loved Verge’s ROI Models.  But consistently, they have asked for

1) a way to track who uses the models

2) a way to save and revisit scenarios

3) a way to integrate the scenarios into a professional white paper and mail the results to the customers

4) mail the white paper simultaneously to the salesperson.

With the launch of ROI Customizer, Verge is now offering this as a cloud-based service.

ROI Customizer Process

We are excited at the potential this service has for a wide variety of clients.


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Mobile Broadband Customer Experience – iPhone Dashboard

I have developed this rapid prototype to generate a PC-based version before developing android or iPhone apps.

I have been working with a client that monitors every user’s mobile data connection for customer experience metrics. While they monitor many aspects, the big measurement is speed. In most cases, this means the download peak or effective throughput

Up to now, we have let the mobile operators use this for customer service, troubleshooting, network planning, and policy control.

However, we are now exploring the idea of exposing speed to the customer. And, if they want, in certain markets, they can push a button to upgrade to a higher level of service. In many markets around the world, mobile broadband service levels are becoming differentiated. This provides an easy way to prove good service to customers and/or generate incremental revenue.

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Video Conferencing Interactive Pricing

So your product/service provides a great user experience. During the demo, customers say “Wow! That is awesome and so much better anything we have seen from the competition.” Naturally, their next question is “How much does it cost and can we afford it?”

If you have a complex solution, involving many network elements, this simple question can cause the sales pitch to derail. The meeting quickly moves from excitement to confusion.

The obvious solution is to simplify your pricing. In addition, you might consider a well-designed interactive model.

 Video Telepresence and Conferencing




The following model lets users input how frequently they might use a video conference/ telepresence solution. Hidden from the customer, the model performs complex calculations to determine the necessary capacity. These calculations derive the average and peak concurrent meetings during the busy hour. Key usage figures appear on charts






In addition to usage, the model provides an architecture diagram with drill down capabilities. Users can hover over “VidyoLines” to see the capacity of a certain network element they will need. This diagram quickly educates IT managers who might not be familiar with video technology. It does not require them to dive down into technical capacity parameters and network relationships.






The cost section provides an overall 5 year total cost of ownership. Likewise, it provides a detailed table of usage, number of network elements, and costs. In other words, this is a price quote that salespeople can provide within a right immediately after the aforementioned AMAZING DEMO.







Finally, a solution like video conferencing generates savings. Hard savings come from avoided airfare, car, and hotel expenses. Softer savings come from improved productivity – no more dead time in airports or airplanes. Also, this model calculates the metric tons of CO2 from travel that is avoided. All of this is summarized in an NPV calculation plus the months required to recover the solution investment.



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Digital Transition June 12 – Its the Convergence, Baby!

epgFunny thing happened to me on the way to June 12th’s Digital Transition.  My Electronic Program Guide stopped working.

For those of you under a rock, Digital Transition is when all analog NTSC television will stop broadcasting over they air.  From then on, its all digital, all the time.

There is lots of concern in the media about how people will not get a signal, no longer able to watch TV.  I am concerned about the elderly in particular.  For 60 years, older folks have punched the same buttons and received the same results.  Now you have to scan, set up set-top boxes.  It is tough to change your ways.

But the more interesting thing for me is what is going to break.  So far, its not the broadcast signal.  Those have been up and running for years now.  They will work after June 12.  What will break is the where the broadcast intersects with information:  the electronic program guide (EPG).

This EPG is a part of digital transition that folks don’t have their eyes on.  I have already seen it breaking.  My DVR runs on guide listings based on the analog broadcasts.  Now, the DVR needs a new database schema and daily feed that aligns to the digital world.  This is not rocket science, but it requires software updates and new xml feeds. 

The tough part in modern communications is not the perfection of an individual media stream.  It is the coordination of multiple media, data, and billing streams.  And then, having the customer service that is knowledgable enough to master, resolve problems with all of them simultanteously.

Its the Convergence, Baby!

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Unit Trains and Railroad Pricing Versus Mobile Operators

In my background, I used to manage the product marketing for chemicals shipped on the Southern Pacific railroad (now the Union Pacific).  While railroads are not known for their cutting edge business skills, it is instructive to see how another capital-intensive, network business dealt with pricing.

So how might you think railroad price their services?  By the carload?  In some cases, yes.  But not all cars are the same size.  Frequently, they priced freight by weight.  And they would give shippers incentives for loading as much in a car as possible. For example, $30 per Net Ton (this excludes the weight of the car) with a 70 ton minimum, and $28 per Net Ton with a 80 ton minimum. Three scenarios:



Total Charge

Under 70 tons

$30/Net Ton, 70 ton min


72 tons

$30/Net Ton, 70 ton min


82 tons

$28/Net Ton, 80 ton min


At some point, it makes sense for the shipper to pay the “next minimum” – between 74.6 and 80 tons.

In some ways, this rail model is similar to the “buckets” (e.g. $60 for 1000 minutes) offered by mobile operators, but with some differences.  Both collect a minimum revenue.  However, in the rail pricing, there are incentives to load more and generate even more revenue.  In contrast, most mobile carriers penalize a user for going beyond his “bucket” size by charging an overage charge. 

The rail pricing model and incentives make sense relative to the capital investments. For a rail carrier, the capital investment is two assets. First the fixed rail network itself.  Second is the locomotive(s) required to pull the train. 

The rail network is a fixed item that has a capacity that is rarely maxed out (requiring double-tracking to expand). The more likely capacity constraint is in the switchyards.  Switching locomotives in a “hump” yard is a time-consuming and serial process.  The “minimum” of pricing model serves to cover the cost of the rail network.

Locomotives are an asset that is modular and mobile enough that additional locomotives can be added if the cars need it.  Plus, there are economies of scale for longer trains – most of the power is to get going and braking.  So it makes sense to price to attract incremental weight and revenue.  Every additional car on the train has a lower marginal cost.

A different rail scenario to consider is the “unit” train.  Unit trains typically involve high volume commodities like coal.  The entire train is made of ~100 coal cars plus a locomotive set that is efficiently matched to the weight of the entire train.  For rail carriers, unit trains are a beautiful use of capital.  They generate a lot of revenue via their volume.  They are constantly moving, meaning the investment is constantly producing a return.  They are efficient, not wasting locomotive power. And, perhaps most importantly, they do not require any switchyard time.  They can go from point A to B, bypassing the costs and time of switchyards which represent the “nodes” of the network.  Because of these efficiencies, unit trains receive very low prices.   Why?  Because of lack of variability in unit train movement and their low impact on the overall sizing of the network.  Unit trains represent a “baseload” of traffic that rail carriers need to survive.

In next post, I will talk a little more about how this relates to telecom, mobile networks.  Then we will look at the electric power industry.

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New Mobile Services = Network Usage = Pricing Problems

The Wall St Journal had an interesting article about the downside of AT&T’s iPhone’s success: increased network usage.

While I won’t go into depth about  AT&T per se, this echoes comment from clients examining many bandwidth-intensive, new services.   Carriers are struggling to balance three imperatives of service

1)      Marketing imperatives: the service must be cool enough to attract and hold customers

2)      Network Engineering:  the network must be capable of delivering the service reliably

3)      Finance: the service must generate sufficient money to pay for the network

Looking from the sidelines, the network engineers remind me of the guy who buys a shiny new car, parks it in the garage, and washes it every day.  One day, his wife asks him if she can drive it to the store.  The guy looks at her incredulously, “Drive? This car is not for driving.  You might break it.”

What did network engineers think would happen when they build a fast network.  Marketing will find exciting ways to fill it up.  But this is unfair.  The flip side of this view is that Finance and Marketing have not worked effectively to put together a business model that pays for the use of the network.

alcatel-bandwidth-usage2As the article points out, if you look at the data intensity of various services, some of the newer services – e.g. web browsing, take much greater bandwidth.  One way to look at this is on a $/bandwidth basis (which is probably not the right way).  Email  service is pretty darn profitable as far as bandwidth is concerned.  It generates ~$10/month, but absorbs only 4% of total bandwidth.   And it is typically offered with an unlimited data plan.  For example, AT&T offers  Blackberry personal plan with unlimited data for $35/month. 

Wait.  Did someone say unlimited data?  Email was bundled with it back when folks were not using the network for much beyond email/SMS.    So they let the cat out of the bag.  Now they have to get the cat back in the bag before streaming video starts sucking up the network bandwidth, but generating limited incremental revenue.

However, there are many different ways carrier can and should be looking at charging.  In future posts, we will at ways different industries deal with the pricing and capacity.

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Pause, Scrolling Forward in Netlfix on Media Center

After about 2 days, Media Center updated and offered me the Netflix tile. On first click, it requires you to shell out to a browser and install both the Netflix app and Microsoft’s Silverlight.  It takes a while, but it is worth the wait.  After entering your Netflix user/password, the Watch Instant watch portion of your queue is available.

The integration with the Media Center controls is great!  One of the problems with Netflix via a browser was you could not use your remote control effectively.  But with the new Netflix “native” media center, you can pause, jump forward or back. 

One of the best features is the pause, scroll forward.  This is identical to what you can get on the Roku box from Netflix. You have the ability while paused to press your right (or left) button and navigate as far forward in the movie as you wish.  The “five window” scrolling view is a great way to see where you are. 

The only downside is the re-buffering once you want to play again.  It takes approximately 3 seconds on my DSL service.  Not bad.  In fact, pretty kick @ss.

Netflix is the best thing that has happened for Microsoft’s Media Center.  Let’s hope Hulu and other streaming services follow with similar native tiles using a similar interface.

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NetFlix Adds its Tile to Microsoft’s Media Center

Netflix is a company that gets it.  First they provided a streaming service, allowing you to watch movies on your PC via a web browser as long as you have an existing subscription.  High quality, convenience, same low price.   What’s not to like?

Next, they sold a “Roku” box that you can attach to your TV.  This is a low cost way to introduce people to the idea that you don’t need a full cable subscription to watch lots of great content on your TV.

Now, they are working with Microsoft into integrate Netflix as a “tile” on Vista Media Center.  More and more folks are discovering the cost savings and convenience of hooking a PC up to the TV. If you have a PC with Vista hooked up, you can now use your remote control to select the “Netflix” tile and start watching movies instantly.

Many “garage” developers had already enabled this capability, but Netflix’s willingness to develop an official version shows foresight and commitment to streaming IPTV.  I will be curious to see if they offer similar capabilities for a Mac or Linux platform.

Some Media Center fans are crying that it won’t work on Extenders.  On the whole, Microsoft needs to rethink its whole Extender strategy.  Lack of support for Netflix is just part of the problem.  But DLNA and Play To coming on Windows 7 indicates an interesting option.


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Use the Cutting Edge to End Telco Cable/Satellite Expenses

“What is the cheapest way to get communications and TV?” As a telecom/IPTV consultant, I get asked this question a lot.   Espcecially in this economy.  Answering this question provides HTPC fans with an opportunity to get more people involved, but you need to be careful not to mislead folks that a HTPC is for everyone.  I will provide a US-centric answer to this question below.  And, I live in Chicago in the US. Some of the Over the Air parts relevant just to Chicago.


First you have to ask yourself a few questions:

1.            Are you concerned about losing 911 services from a landline?

2.            Are you addicted to any Pay TV programming?  Most commonly these are:

a.            Sports?  Do you need to see Big Ten football? Hockey?  Baseball games that are not on broadcast TV?

b.            Premium Channels?  HBO shows? Sci-Fi?

c.             Comedy?  Do you have to see John Stewart or Colbert Report immediately?

d.            Various lifetime or reality TV? 

3.            Do you use Netflix? Do you get around to watching your films?

4.            Are you a Mac person who absolutely cannot operate/stand Microsoft products, no matter how simple or reliable?

5.            Do you need a high-def picture? Are you within 15 miles of TV transmission towers?

6.            Do you have a desktop computer sitting around? Would you be willing to spend a little money upfront to save money over the next 2-3 years?

7.            Are you looking to economize and save money? Or is convenience worth a premium?


I will address all of these questions as I describe to a set up that I believe is the most economical, highest quality solution.  It also offers the greatest variety that is acceptable to most people.  Finally, it taps into a trend in Web content that has cable providers and AT&T quivering in their boots.


In a nutshell, here is what I recommend

             Cut your landline phone service (POTS). Keep your mobile phones for local and long distance.

             Order “naked/dry” or “unbundled” DSL that is mandated to be offered by the federal government.

             Use a PC voip service for the occasional international call.  E.g. Skype.  Plus, get into video telephony. 


             Use Microsoft Vista’s Media Center running on a PC with over-the-air tuner cards for free, high-definition broadcast TV.  This is a Home Theatre PC (HTPC) set up that acts as a Tivo on steroids, but is free.

Media Center Recorded TV Interface


             Use Netflix to 1) stream movies to your  HTPC and watch on your TV and 2) rip mailed DVD’s to your HTPC so you can time-shift, watch them when you want to

             Access all your music, photos, home videos, and internet radio/podcasts on the HTPC

             Tap into some very cool applications and view web content on the big screen


On the whole, here are the monthly costs:


“Unbundled” DSL = $28/month for 3Mbps service (this is plenty fast for 95% of folks)


Mobile phones for 2 adults = $100/month for 1000 shared minutes (more minutes than we can usually use).  Add $25/month if you need mobile data.  T-mobile is the cheapest national carrier.  If you do not travel, look to a regional (US Cellular) or even local (Cricket) carrier.  You might also consider T-Mobile’s @Home service.  It is pretty cool and requires another explanation


PC VoIP – I buy $10 at a time from Skype or Truphone.  That usually lasts me several months.  And at $.025/minutes to most of Europe and USA, you can’t go wrong


Netflix – $9/month for one movie at a time


Total: $147/month after taxes for practically unlimited telecom and media entertainment. 


Most people who are paying for comparable satellite DishTV + mobile + internet bundles from AT&T are paying $200-250/month.  Depending on how savvy you have been in the past, you will probably saving $100-150/month.


Lots of potential for savings here, but will this work for you?  Let’s walk through the questions.

1)            911 services.  Here are the facts about 911.  When you dial 911 from your home phone, by federal law, it is correlated to a database and provides your listed address to the 911 operator.  Nevertheless, most 911 operators are trained to ask and confirm your location – after all, that is the most important info.  The same federal law requires mobile phone operators to provide the ability to identify user’s location within 100 meters.  In practice, they can usually do this to within 5 meters.  So, by cutting your landline, are you putting your family at danger?    It depends on whether you can find your phone in an emergency and it is charged.  And, can your children do the same?  Also, are you in an area prone to prolonged mobile outages from hurricanes or storms?  Here in Chicago, I have dialed 911 3 times, but it has never been for a threat like a fire.  I know plenty of folks without landlines (mostly under 40 years old).  They are not dead yet.


2)            PayTV programming.  This is a real catch for most people.  I have not had cable for 20 years now. I thought I was missing something.  But every time I get an opportunity to watch Cable/Satellite, it consists of 100 channels of content that I can get free or idiotic programming. 


a)            There are some exceptions.  Sports fans seem to be willing to pay the premium for every single game of their favorite team.  So baseball fans, this may not be for you.  Or, then again maybe it is. premium is $110 for the entire year. You can get this streamed to your HTPC in pretty high quality.  You will pay for this extra feature in 2-3 months.  Plus you get all sorts of extra fan stuff.


b)            Premium Channels  HBO and Showtime are the real action here.  Shows like Sopranos and Weeds have a well-deserved following. Do you need to watch these as they come out so you can understand the talk around the water cooler? If so, then this HTPC set up is not for you.  However, almost all of these shows are available on DVD or streaming via Netflix.  (See below)


c)            Comedy.   John Stewart and Colbert are great and very topical.  If you need to hear John Stewart skewer in real time, then the HTPC set is not for you.  However, almost all this content is available on a one-day delay on line. (  This works for me. 


d)             Various lifetime and reality TV.  I don’t watch this stuff, so I am not on top of all of them.  But, more and more of this is available via Hulu or various streaming sites.  Bookmark the below page that will lead you to various online-network programming.


3)            Netflix  – If there is a company that is doing everything right in the last few years, it is Netflix.  Their “Watch Instantly” service is a game-changer.  If you have not tried it, you should.  I could talk for a long time about how amazing the technology must be behind it.  The only downside to Watch Instantly is that it does not carry the entire Netflix catalogue.  But to complement it, keep getting your Netflix mail service and burn the DVD’s to your hard drive.  Is this legal? No.  You need to purchase $40 software that strips the DVD of protection and burns it to your HTPC’s hard drive.  I do not take this lightly.  I have plenty of friends who make their living from music, film, and acting.  You need to make sure not to subvert the intent of content protection and intellectual property.  Therefore, once you have watched the DVD, erase.  I am not a lawyer, but I feel this is proper.


4)            Apple vs. Microsoft. This is one area where Microsoft has a lead on Mac.  For now.  Apple has their Apple TV. By almost all accounts, it has been a flop.  It focuses on streaming video content you purchase/rent from iTunes.  This is a small fraction of what a HTPC is about.  Now, for the most controversial statement you might hear: Vista does not suck.  As an operating system, is it as good as Mac?  Maybe not.  But for the HTPC, we are talking about a single purpose machine. Vista’s Media Center is stable and the interface is very attractive.  Most people who see my setup say “this looks better than my Cable”. 


What is Media Center?  That is a long story.

It puts a 10-ft interface on your PC such that you can put your couch and operate with a remote control.  Media Center brings together TV, pictures, music, home video, DVD’s, radio, and streamed content in this interface.  I love looking at all of my pictures on a 37” screen.  Media Center includes an online guide (just like cable, satellite, or Tivo).  It has an excellent DVR so you can record, pause, rewind, fast forward. You can buy “extenders” so you can access the HTPC from other rooms.  Oh yeah, it is free.  And if you don’t want to use the Media Center interface, you can use the regular PC interface to access the internet.


New content is streamed to Vista Media Center every month.  The Olympics had some great content.  NCAA March Madness is offering some interesting content.  And much of the online content streamed content from places like Hulu is starting to be seamlessly integrated into Media Center


Finally, Microsoft’s next version, Windows 7 is slated to improve Media Center in a number of ways.


5)             High Definition Over the Air (OTA).  Cable and Satellite will never say this, but the best quality High Def picture you can get is the free Over-the-air broadcast.  Cable and Satellite compress their signal and degrade the quality.  For the HTPC to work, you need to be able to receive a decent over-the-air signal.  Digital is a little different than analog.  With analog, you could get by with fuzzy pictures from poor reception.  With digital, your tuner needs a decent enough signal to lock onto the datastream.  If reception is good enough, the picture is perfect (you are essentially receiving and playing back an MPEG2 file).  However, if your tuner cannot lock onto the datastream, packets are lost and you get no playback.  In my case, Chicago is great for reception.  Flat terrain and signals transmitted from the some of the tallest buildings in the world.  Most folks can use a UHF antenna and receive all of the digital channels (There is no such thing as a “digital” or “high-def” antenna. Do not fall for this marketing scam).  CBS 2 WBBM is the one catch.  They broadcast on VHF frequency 3, which is ridiculously low and requires a big VHF antenna.  However, on June 12, 2009, they will be switching to frequency 12 and doubling their power. 


6)            What is the catch?   An upfront investment in an HTPC. If you can find an older desktop PC (vintage 2006), you can outfit the machine.  There are three important issues here.  One is a CPU and RAM sufficient to run Vista Home Premium edition.  I recommend a 2Ghz processor and 2 2GB of RAM.   Second, a decent video card and >300GB hard disk to record and playback in high-definition to your TV.  And third, tuner(s) to record the OTA TV signal.  On Craig’s List you can get most of this for ~$500.  If you build from scratch, it costs about $750.  If you happen to have some of this sitting around, about $200 of upgrades can get you running.   The payback for this investment is less than 1 year.


7)            Saving money.  Who doesn’t like to save money.  But nothing is truly free. The HTPC approach requires a comfort with PC’s, even though 95% of the time you forget it is a PC and think you are watching TV.  Occasionally, you will need to reboot about once per month.  If you work on a PC during the day and can send email, then you can handle this level of technology. 


I hope this helps you.  I enjoy my set-up immensely.  So does my wife and my daughters.  I built my first HTPC in 2005.  I suspect I have saved $1000 by now. Plus, it is by-far the most fun tech toy I have ever had.  

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