Customer Solution Case Study

Telefónica Drives Opportunities for Developers with Cloud and Mobile Services

Overview

Country or Region: Spain

Industry: Telecommunications

Customer ProfileTelefónica is one of the world leaders in the telecommunications sector, operating in 25 countries and providing communication, information, and entertainment solutions in Europe, Africa, and Latin America.

Business SituationThe company wanted to give its customers access to thousands of downloadable add-ins, while launching a global program for its developer community to take applications to market in new ways.

SolutionWith Windows Azure, Telefónica gained

access to a vast community of Microsoft .NET Framework developers, as

well as an open solution appealing to its existing programmers.

Benefits Serves information needs of consumers Shares up to 70 percent of revenue with developers Reaches customers in 25 countries Launches incrementally, with rapid expansion planned

“The customer billing experience is simple and automated, ensuring payment to developers is smooth and seamless. We’re sharing between 10 and 50 percent of the API and 70 percent of subscription revenues.”

Jose Valles, Head of BlueVia, Telefónica

Telefónica, a leading telecommunications service provider, wanted to give its customers access to innovative applications and services, and provide new business models to help developers gain revenue from their ideas. The company launched a developer platform called BlueVia through which developers can now add telecommunications functions to their applications, combined with risk-free revenue share opportunities. Telefónica forged a partnership with Microsoft to attract a community with millions of developers. Together, the companies created BlueVia SDK for .NET, a set of technologies that accelerate the use of BlueVia by developers using the Microsoft platform. With BlueVia SDK for .NET, developers can easily host cloud applications on the Windows Azure platform.

SituationTelefónica is one of the world’s leading telecommunications service providers, with more than 270 million customers, primarily in Spain, Europe, and Latin America. The company operates in 11 different languages and conducts around 60 percent of its business outside Spain, operating in 25 countries.

Telefónica is one of the first telecommunications service providers to recognize the opportunity to help developers with their sales, giving them access to cloud computing technologies to build applications. In mid-2010, senior management at Telefónica identified that a good deal of development, including work related to smartphones, was starting to move to the cloud. In light of this, the firm wanted to partner with a global technology vendor to provide a cloud-based offering for its own and its partner’s developer communities. This led Telefónica to Microsoft.

Growing Move to Cloud Computing by DevelopersIn the past year, innovation in the mobile application space has expanded to include substantial cloud components and services—known as web–mobile convergence. This transformation, coupled with the growing use of cloud computing throughout the technology industry, has been a key motivator for the Telefónica–Microsoft agreement.

Tony Mestres, Vice President, Communications Sector, Microsoft Corporation, says: “What was remarkable about this past year was the trend for web–

mobile convergence. Consumers want a great experience across a range of screens—not just mobile devices, but also on computers and other devices. Everything is increasingly designed for broadband networks on mobile handsets, and for interactions with networks on mobile phones to make purchases, play games, and have social media experiences with friends. It’s also changing the dynamics of how cloud computing works with networks and devices with small screens.”

SolutionTelefónica and Microsoft formed a strategic partnership to create the BlueVia SDK for .NET, a set of technologies that make discovering and accessing the Telefónica BlueVia application programming interface (API) platform easier for Microsoft’s developer community. The SDK helps developers create their own applications. Through the strategic partnership, Telefónica has the capacity—by using Microsoft technologies and Windows Azure—to engage with an established community of millions of developers worldwide.

A key component of the BlueVia SDK for .NET is a set of templates that allow developers to easily deploy applications to Windows Azure, the Microsoft operating system for cloud computing. Windows Azure contains an open API and a set of templates and controls for Microsoft Visual Studio 2010 Professional that help developers take web services and mobile social networking applications to market. The cloud applies to every connected device, whether it’s a mobile device, a computer, TV, refrigerator, or car.

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“What was remarkable about this past year was the trend for web–mobile convergence. Consumers want a great experience across a range of screens—not just mobile devices, but also on computers and other devices.”

Tony Mestres, Vice President,Communications Sector,

Microsoft Corporation

Combined with the BlueVia monetization model, in which developers will receive payments for application sales, subscriptions, and revenue share on API transactions, developers and designers can go to market quickly and realize revenues for products.

Video Sharing Website Targeted at ConsumersUsing BlueVia SDK for .NET, a developer can create, for example, a video sharing website targeted at consumers. It can use advertising services from BlueVia and Windows Live services from Microsoft for user identity, presence, and contacts. Users can record videos on their mobile handsets, add descriptions, such as “jazz,” and upload them to the application on the Windows Azure platform. Automated notification can be sent to users who are set up to receive updates on all new jazz videos—they also receive a short message service (SMS) message with a link to the video, which is immediately available to thousands of users.

Minimal Development Time with Zero Infrastructure CostsBy using BlueVia SDK for .NET, applications can be developed in minimal time with zero infrastructure costs. Since BlueVia SDK for .NET, Windows Live services, and Windows Azure expose APIs based on open standards, the application can be developed using the Microsoft .NET Framework 3.5 development system, C++, PHP, or Java.

The combination of BlueVia SDK for .NET and Windows Azure gives a compelling

value proposition to developers familiar with Microsoft technology, who are looking to generate revenue from their applications quickly. It avoids the need for capital expenditure on hardware and uses risk-free communications services that offer revenue-sharing business models.Mestres says: “The Microsoft and Telefónica collaboration on BlueVia SDK for .NET encourages a developer ecosystem that will further fuel our ongoing use of Windows Phone 7, Windows Live, and Windows Azure. It allows consumers to experience a new range of value in the applications they can access through their phones, computers, or TVs.”

Choosing Windows Azure for the CloudTelefónica is using Microsoft tools that are familiar to the Microsoft developer community, including the Microsoft Silverlight browser plug-in. Jose Valles, Head of BlueVia, Telefónica, says: “One of the great things about working with Windows Azure is that the .NET Framework supports developers by providing them with familiar tools that they’re already using, so there’s no steep learning curve. It’s not just about BlueVia, it’s also about Windows Azure, which helps developers host their applications within the Microsoft platform.”

The openness of Windows Azure was a major factor for Telefónica in its choice of a cloud-based environment. Developers with different skills such as the .NET Framework, Java, and PHP can host their applications on Windows Azure. By using the open-standard representational state transfer (REST) based APIs, applications deployed to Windows Azure can be accessed by any

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“One of the great things about working with Windows Azure is that the .NET Framework supports developers by providing them with familiar tools that they’re already using, so there’s no steep learning curve.”

Jose Valles, Head of BlueVia, Telefónica

operating system for desktop or mobile devices, including Windows Phone 7, Apple, BlackBerry, and Symbian.

Valles says: “One of the things we like about Windows Azure is its openness. You can develop in several languages and allocate or host your applications in the cloud within Windows Azure. We also like the simplicity that Microsoft delivers.”Joseph Hofstader, Cloud Computing Architect/Evangelist at Microsoft, adds: “The key to successfully recruiting developers to a platform such as BlueVia is to reduce the learning curve. This collaboration provides a set of tools that allow developers to build applications for Windows or the web that use the BlueVia API and Microsoft Online Services in their familiar Microsoft Visual Studio environment.

Hofstader says the open cloud platform and APIs pass on savings to customers as well. Both customers and developers can benefit from the scalability of the cloud to provision more instances as demand grows, and then decrease as demand allows.

By contrast, on-premises offerings require upfront investment in hardware and infrastructure, with limited capacity and significant idle time. Hofstader argues that expensive on-premise infrastructure is often unaffordable for new developers entering the workforce. The BlueVia cloud offering can even apply to non-professional developers who are interested in creating applications.

BenefitsTelefónica says it is the first telecommunications service provider to share revenue from its core business with developers, in a risk-free way. This partnership offers developers fast time to market, an innovative business environment, and global reach for different applications based on standard Microsoft technologies. Vivek Dev, Director, Global New Services, Telefónica, says: “BlueVia provides a path to market. In a phased approach, we’re launching application stores in each of the 25 countries in which we operate. On completion, developers will have access to all of our 25 markets, where they can generate revenue from their applications seamlessly.”

BlueVia SDK for .NET Serves Both Consumers and BusinessesMicrosoft and Telefónica have formed a long-term strategic alliance to help developers serve the information needs of consumers in the office and at home. Telefónica says it has found Windows Azure to be the most reliable cloud platform on which to work, given the major research and development investment Microsoft has made in cloud technologies. Microsoft data centers are secure and accredited by various independent auditing and certification agencies.

Maria Garaña Corces, General Manager, Microsoft Spain, says: “By combining the leadership and innovation from Telefónica with Microsoft solutions in the cloud, we’re giving consumers a fantastic opportunity. For users, it provides anytime, anywhere access to information through any device,

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“By combining the leadership and innovation from Telefónica with Microsoft solutions in the cloud, we’re giving consumers a fantastic opportunity.”

Maria Garaña Corces,General Manager,

Microsoft Spain

with the latest applications and services from the cloud.”

Telefónica Shares Revenue with Developers Using BlueViaTelefónica has a commitment to revenue sharing, offering developers recurring revenue, predictable payments, and ultimately, according to Valles, a boost to their bottom line.

BlueVia ensures that developers who design applications or mobile websites can tie them into APIs, handling anything from billing to customer usage patterns. There is no charge for using APIs.Using BlueVia, developers receive 70 percent of application sales and subscription payments, 20 percent of user-originated SMS fees, 10 percent of network-originated SMS revenues, and 50 percent of advertising revenues. The various income streams can be mixed to meet specific developer requirements. Telefónica is committed to adding new APIs and business models through the BlueVia roadmap.

Valles says: “The customer billing experience is simple and automated, ensuring payment to developers is smooth and seamless. We’re sharing between 10 and 50 percent of the API and 70 percent of subscription revenues. The advantage for the developers is that they will no longer need to depend on revenue per application download.”

Developers Can Reach 25 Countries with a Single Application Telefónica spent time listening to and working closely with its own developers

and the community as a whole. In turn, many programmers have found that their prior experience with Microsoft development tools translates easily to the Windows Azure platform. Because it is an open cloud platform for developers, Windows Azure can host not only Microsoft ASP.NET applications, but also solutions created in other languages.

The applications created by developers and hosted on Windows Azure can function on a variety of computers and smartphones, including Windows Mobile, BlackBerry, and iPhone devices. The Telefónica proposition is about creating opportunities for revenue creation and providing clear routes to market with an addressable audience—all in a risk-free environment. With this toolset, developers will be able to reach 25 countries with a single application.Garaña Corces says: “This partnership is benefiting both developers and customers. For businesses, it provides the possibility to access information anytime, anywhere, with any device—and maximizes the value that the cloud can offer them.”

BlueVia Plans Incremental Launch with Rapid ExpansionIn its first phase, Telefónica has rolled out BlueVia to its national operators in three countries—Movistar Argentina, Movistar Mexico, and O2 UK. The company has plans for rapid expansion to other countries such as Brazil, Colombia, Germany, and Spain. Valles says: “We’re starting with three families of APIs—messaging, advertising, and customer profiling—and in future there will be others. They can be click to call, or a location, or a facility to handle micropayments.”

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“The customer billing experience is simple and automated, ensuring payment to developers is smooth and seamless.”

Jose Valles, Head of BlueVia, Telefónica

He concludes: “We plan to release new capabilities and add further countries. Developer input into our roadmap is vital to ensure we deliver the functionally developers will really value. That is why we encourage developers to sign up to BlueVia and begin collaborating with us.”Microsoft Cloud PowerMicrosoft offers a complete set of cloud-based solutions to meet business needs, including solutions for advertising; communications (email, meetings); collaboration (document storage, sharing, workflow); business applications (customer resource management, business productivity); data storage and management; and infrastructure services. In addition, customers can take advantage of an entire ecosystem of solution providers and Microsoft partners.

For more information about Microsoft Cloud Power, go to: www.microsoft.com/cloud

Windows Azure PlatformThe Windows Azure platform provides an excellent foundation for expanding online product and service offerings. The main components include:

Windows Azure. Windows Azure is the development, service hosting, and service management environment for the Windows Azure platform. Windows Azure provides

developers with on-demand compute and storage to host, scale, and manage web applications on the Internet through Microsoft data centers.Microsoft SQL Azure. Microsoft SQL Azure offers the first cloud-based relational and self-managed database service built on Microsoft SQL Server 2008 technologies.Windows Azure AppFabric. With Windows Azure AppFabric, developers can build and manage applications more easily both on-premises and in the cloud.−AppFabric Service Bus connects services and applications across network boundaries to help developers build distributed applications.−AppFabric Access Control provides federated, claims-based access control for REST web services.Windows Azure Marketplace DataMarket. Developers and information workers can use the new service DataMarket to easily discover, purchase, and manage premium data subscriptions in the Windows Azure platform.

To learn more, visit: www.microsoft.com/windowsazure

Related Resources and Information

To learn more about the Windows Azure platform, visit the website at: www.windowsazure.com Learn: Channel9 Windows Azure Training CourseRead: Security Best Practices for Developing on the Windows Azure Platform

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For More InformationFor further information about Microsoft products and services, please visit: www.microsoft.com/uk or call 0870 60 10 100*

For hearing impaired customers with a Minicom, contact: 0870 50 30 400*

*Lines are open 8am–6pm, Monday to Friday. Please note, numbers prefixed 0870 will be charged at national call rates. For details of national call rate charges, please contact your telecommunications provider.

For more information about Telefónica products and services, please visit the website at: www.telefonica.com

To view the full story plus video of Telefonica and other success stories, visit the Microsoft Success Web site at: www.microsoft.com/business/success

Software and Services Windows Phone 7 Windows Azure platform− Windows Azure

Windows Live Microsoft Visual Studio 2010 Professional

Download: Windows Azure Training Kit Download: Windows Azure SDK

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