B.C. company unveils new mobile apps server that gives more control to carriers

Contec Innovations, a three-year old B.C. company planning to go public on the TSX Venture Exchange next month, has released a new mobile applications server, dubbed Hornet, designed to give wireless carriers greater control over the content and applications they provide over their networks. While a new mobile applications server may not be hot news, the fact that the server resides on the inside of carriers’ networks should be welcome news to the operator community. Carriers have long complained about control and quality of service issues surrounding emerging wireless data and content, which is, for the most part, controlled on the outside of their networks. Contec president and CEO Perry Quan says the Hornet helps solve these problems by giving control over the applications and content to the carriers. It also helps bridge the gap between mobile operators and application/content developers, which could also increase wireless data adoption rates. The carriers’ typical architecture is to have a WAP gateway, for example, on the inside of their networks, while the application/content server sits outside of their networks. The Internet connects the two. "From the operator’s point of view it loses control of the services in terms of the software, the customizability, the look and feel, and the branding of the service," Quan explains. "By pushing the services and subscriber information outside of their network, they lose control of the subscriber as well." Ownership and control of the subscriber is key to the carriers, and as Quan describes, "(they) own the subscriber, own the gold." The Contec system is unique in that it brings the applications and the content inside of the carriers’ environment. "So by pulling the services inside, it gives them the branding, the control and the ownership of the subscriber. Also, they own more of the value chain and retain more revenue," Quan says. Perhaps more importantly, carriers gain control over quality of service issues. Many application/content providers are skilled at developing applications and content, but don’t have enough experience in operating application servers. "They’re facing hosting issues that they’ve never dealt with before … and a lot of the application developers don’t have reliable and scalable infrastructure (on which to run their services)," Quan notes. In characterizing the problem, Quan cites a failed attempt to work with Riot Entertainment, which had gained the rights to develop content and games around the popular films Lord of the Rings and Spiderman. Reliability was a fundamental problem in this case, he says. "The statistics were abysmal. They were nowhere near 99.999 per cent; they were more in the 70 per cent range. They had a team of engineers that were babysitting the application servers," he recounts, adding that, unfortunately before an agreement could be signed, the company went bankrupt. Contec confident sales outlook is positive Quan is confident that Contec won’t have too much trouble selling the Hornet to carriers in its three target markets: South East Asia, Europe and North America. "We didn’t build this product in isolation, far from it. We’ve been in consultation mode with carriers since day one, bouncing white papers, early concepts and requirements specs past the carriers – getting feedback," he explains. Quan is, however, cautious to provide too many details on potential sales. "What we’ve said in the prospectus and to the investment community is a typical sales cycle of a product of this complexity into the telco environment is six to 12 months. But we’ve already got a couple of proposals in the pipeline, so I think we’ll do better than that," he says.

B.C. company unveils new mobile apps server that gives more control to carriers

News | July 22, 2002

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