Click here to close now.


Java IoT Authors: Pat Romanski, Yeshim Deniz, Adrian Bridgwater, SmartBear Blog, Elizabeth White

Related Topics: Agile Computing, Java IoT, Mobile IoT, Microservices Expo, Linux Containers, @BigDataExpo

Agile Computing: Article

Facebook Plays Short and Long Game with WhatsApp and Oculus Rift | Part 1

Takes on Google and Mobile

When Facebook decided to invest a cool $19 billion ($16 billion upfront) for messaging app WhatsApp the entire world was bound to take notice. Telecommunications types, in particular, were keen to understand how this latest move would impact them as mobile operators have been feeling the heat from over the top (OTT) players like Google and Facebook for years. (To put this $19 billion in perspective, AT&T, one of the world's largest telecom carriers, invests about $20 billion in networks and spectrum in an entire year.) Shortly thereafter, in another surprise move and with the dust not quite settled on WhatsApp, Facebook picked up virtual reality startup Oculus Rift for $2 billion. This left many in the industry wondering what exactly was going on. While WhatsApp and Facebook's previous acquisition of Instagram for $1 billion were in keeping with its social network roots, Oculus Rift was in the video game industry and had yet to release a product. This led many to ask: What was Zuckerberg thinking? But if you dig deeper, these acquisitions are intertwined and central to Facebook's short and long term play to develop the next-generation communications platform. With WhatsApp and Oculus Rift, Facebook takes on Google and mobile providers in the race to do just that.

Let's start with WhatsApp. Messaging is one of the top activities on smartphones and these apps are increasingly viewed as social networks. WhatsApp is already an international phenomenon, even if it has not made as much of a statement in the U.S. just yet. In some markets, WhatsApp generates almost as much messaging traffic as all traditional carriers combined. Instead of people using carrier text and voice messaging at cents per message, WhatsApp users consume a few bytes of their data plan for close to zero, and send WhatsApp $1 a year. That's correct: WhatsApp charges nothing for the first year of service and then a mere $1 per user per year. That's not much to a phone company, but nice work for an app company getting close to half a billion users. This leads phone companies to pine after all that revenue they're losing. As if that's not enough, WhatsApp will add a voice calling service to its offering. With this capability, WhatsApp Facebook challenges telcos not only on mobile messaging but also for their bread and butter business: phone calls.

Facebook's entire history is all about getting more and more people to sign up and WhatsApp currently boasts more than 450 million active monthly users. The rapid rise of WhatsApp's user-base was largely due to the low cost and its commitment to not collect user data for advertising revenue, despite users providing detailed personal information to the company, including private texts to friends. If these qualities remain intact, the combined user base of both networks will be truly massive.

Zuckerberg assured the world that acquiring WhatsApp was not simply about money, but rather that it was in tune with his vision that everyone in the world should be connected. He has also stated that mobile operators should give away Internet access in developing nations. Who is going to argue against the idea that communications (in the broadest sense) has delivered social and economic benefits to people in affluent countries? If we expand opportunities to communicate by providing cheap and effective tools, then people and economies benefit, and that's a good thing. However, with free Internet access and almost free WhatsApp voice calling, Facebook can offer nearly what carriers can offer and all those customers will in reality have more disposable income to pay bigger subscriptions and respond to ads. This will mean Facebook gets richer, even as Zuckerberg implied that this would be a happy coincidence, and not the fundamental reason for the acquisition. But it's important to remember that mobile operators stand between Facebook and its customers and rallying public opinion behind a noble cause is good for Facebook and makes the carriers look greedy for not supporting the cause.

WhatsApp is obviously an important element of Facebook's strategy and the company is committed to honoring the app's principles: cheap, reliable, easy to use, no ads and preserves privacy. Just like Google, Facebook is increasingly faced with the harsh reality that many people simply don't like or trust its platform. Buying companies like WhatsApp and Oculus Rift and giving them the freedom to stick to their core roots is an important component to growing the all-important subscriber base and restoring the value and "cool" factor of Facebook long term. Rather than trying to integrate acquisitions into the mother ship, Facebook and Google (e.g., Nest acquisition) are taking a similar approach by putting their significant marketing and development resources behind the acquired companies while letting them continue to innovate autonomously.

The autonomous component is a key strategy. Facebook's internal innovations within its original social networking platform (Facebook Platform and Facebook Messenger for PCs) have not been successful. So, just like corporate giants in other industries, Facebook needed fresh infusion from the outside. For example, while Snapchat and Pinterest have been innovating in social media, Facebook bought its way in with the Instagram purchase in 2012. Facebook's "me too," Snapchat look alike app called Poke - an internal endeavor - again didn't make it off the ground. And it's not just Facebook. Google's list of abandoned projects has its own Wikipedia page that is worth a read. However, when you compare these two companies' success rates in innovation to other big companies (e.g. AT&T, GE, Ford, Nokia) they all have lists of failures alongside their successes that keep them in business. We expect Google and Facebook to be different because they are still relatively new, but now they are big and like any large corporation are just as prone to messing up big projects. Following in the path of corporate giants that came before them, buying innovative small companies is critical to their long-term strategy and relevance.

When it comes to these companies' actual wins, some might argue, for example that the Android OS and Google Web Services are only successful because they have been given way to boost Google's real business - Google search and Web ads - which are still responsible for the bulk of Google's revenue. This is a similar theme for Facebook. Both companies are riding the Web advertising wave, but now to stay on top in that field they need to remain the go-to players for the next-generation communications/advertising platform: augmented reality provided by Google Glass and Virtual Reality provided by Oculus Rift (Facebook). However it is important to note that advertising revenue has become, for these companies, not the primary goal, but rather a means to an end. Google's actions suggest that the company has a bigger picture in mind, and Zuckerberg wants to build a lasting place in history for himself and Facebook. Both companies are entering these new modified-reality markets to ensure they have a growing subscriber base and their advertising revenue is protected well into the future to give them the funds they need to do what they want in their endeavors. But that's where the similarities come to a grinding halt.

I'll get into the differences in my next blog. Follow us on Twitter to make sure you don't miss it.

More Stories By Esmeralda Swartz

Esmeralda Swartz is CMO of MetraTech, now part of Ericsson. She has spent 15 years as a marketing, product management, and business development technology executive bringing disruptive technologies and companies to market. Esmeralda is responsible for go-to-market strategy and execution, product marketing, product management, business development and partner programs. Prior to MetraTech, Esmeralda was co-founder, Vice President of Marketing and Business Development at Lightwolf Technologies, a big data management startup. She was previously co-founder and Senior Vice President of Marketing and Business Development of Soapstone Networks, a developer of OSS software, now part of Extreme Networks (Nasdaq:EXTR). At Avici Systems (Nasdaq:AVCI), Esmeralda was Vice President of Marketing for the networking pioneer from startup through its successful IPO. Early in her career, she was a Director at IDC, where she led the network consulting practice and worked with startup and leading software and hardware companies, and Wall Street clients on product and market strategies. Esmeralda holds a Bachelor of Science with a concentration in Marketing and International Business from Northeastern University.

You can view her other blogs at

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.

@ThingsExpo Stories
WebRTC is about the data channel as much as about video and audio conferencing. However, basically all commercial WebRTC applications have been built with a focus on audio and video. The handling of “data” has been limited to text chat and file download – all other data sharing seems to end with screensharing. What is holding back a more intensive use of peer-to-peer data? In her session at @ThingsExpo, Dr Silvia Pfeiffer, WebRTC Applications Team Lead at National ICT Australia, will look at different existing uses of peer-to-peer data sharing and how it can become useful in a live session to...
NHK, Japan Broadcasting, will feature the upcoming @ThingsExpo Silicon Valley in a special 'Internet of Things' and smart technology documentary that will be filmed on the expo floor between November 3 to 5, 2015, in Santa Clara. NHK is the sole public TV network in Japan equivalent to the BBC in the UK and the largest in Asia with many award-winning science and technology programs. Japanese TV is producing a documentary about IoT and Smart technology and will be covering @ThingsExpo Silicon Valley. The program, to be aired during the peak viewership season of the year, will have a major impac...
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new data-driven world, marketplaces reign supreme while interoperability, APIs and applications deliver un...
Developing software for the Internet of Things (IoT) comes with its own set of challenges. Security, privacy, and unified standards are a few key issues. In addition, each IoT product is comprised of at least three separate application components: the software embedded in the device, the backend big-data service, and the mobile application for the end user's controls. Each component is developed by a different team, using different technologies and practices, and deployed to a different stack/target - this makes the integration of these separate pipelines and the coordination of software upd...
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of, and Fred Yatzeck, principal architect leading product development at, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at the same time reduce Time to Market (TTM) by using plug and play capabilities offered by a robust IoT ...
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes about through a Communications Platform as a Service which allows for messaging, screen sharing, video...
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. It also ensured scalability and better service for customers, including MUY! Companies, one of the country's largest franchise restaurant companies with 232 Pizza Hut locations. This is one example of WebRTC adoption today, but the potential is limitless when powered by IoT.
SYS-CON Events announced today that Luxoft Holding, Inc., a leading provider of software development services and innovative IT solutions, has been named “Bronze Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Luxoft’s software development services consist of core and mission-critical custom software development and support, product engineering and testing, and technology consulting.
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
You have your devices and your data, but what about the rest of your Internet of Things story? Two popular classes of technologies that nicely handle the Big Data analytics for Internet of Things are Apache Hadoop and NoSQL. Hadoop is designed for parallelizing analytical work across many servers and is ideal for the massive data volumes you create with IoT devices. NoSQL databases such as Apache HBase are ideal for storing and retrieving IoT data as “time series data.”
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, will show how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants will get the download information, scripts, and complete end-to-end walkthrough of the analysis from start to finish. Participants will also be given the pract...
Clearly the way forward is to move to cloud be it bare metal, VMs or containers. One aspect of the current public clouds that is slowing this cloud migration is cloud lock-in. Every cloud vendor is trying to make it very difficult to move out once a customer has chosen their cloud. In his session at 17th Cloud Expo, Naveen Nimmu, CEO of Clouber, Inc., will advocate that making the inter-cloud migration as simple as changing airlines would help the entire industry to quickly adopt the cloud without worrying about any lock-in fears. In fact by having standard APIs for IaaS would help PaaS expl...
SYS-CON Events announced today that ProfitBricks, the provider of painless cloud infrastructure, will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. ProfitBricks is the IaaS provider that offers a painless cloud experience for all IT users, with no learning curve. ProfitBricks boasts flexible cloud servers and networking, an integrated Data Center Designer tool for visual control over the cloud and the best price/performance value available. ProfitBricks was named one of the coolest Clo...
Organizations already struggle with the simple collection of data resulting from the proliferation of IoT, lacking the right infrastructure to manage it. They can't only rely on the cloud to collect and utilize this data because many applications still require dedicated infrastructure for security, redundancy, performance, etc. In his session at 17th Cloud Expo, Emil Sayegh, CEO of Codero Hosting, will discuss how in order to resolve the inherent issues, companies need to combine dedicated and cloud solutions through hybrid hosting – a sustainable solution for the data required to manage I...
Mobile messaging has been a popular communication channel for more than 20 years. Finnish engineer Matti Makkonen invented the idea for SMS (Short Message Service) in 1984, making his vision a reality on December 3, 1992 by sending the first message ("Happy Christmas") from a PC to a cell phone. Since then, the technology has evolved immensely, from both a technology standpoint, and in our everyday uses for it. Originally used for person-to-person (P2P) communication, i.e., Sally sends a text message to Betty – mobile messaging now offers tremendous value to businesses for customer and empl...
Scott Guthrie's keynote presentation "Journey to the intelligent cloud" is a must view video. This is from AzureCon 2015, September 29, 2015 I have reproduced some screen shots in case you are unable to view this long video for one reason or another. One of the highlights is 3 datacenters coming on line in India.
Nowadays, a large number of sensors and devices are connected to the network. Leading-edge IoT technologies integrate various types of sensor data to create a new value for several business decision scenarios. The transparent cloud is a model of a new IoT emergence service platform. Many service providers store and access various types of sensor data in order to create and find out new business values by integrating such data.
SYS-CON Events announced today that IBM Cloud Data Services has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. IBM Cloud Data Services offers a portfolio of integrated, best-of-breed cloud data services for developers focused on mobile computing and analytics use cases.
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Bradley Holt, Developer Advocate at IBM Cloud Data Services, will demonstrate techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user experience, both offline and online. The focus of this talk will be on IBM Cloudant, Apa...