In one of my first posts, I noted that one of the main components of the LBS Value Chain is the ability to acquire and transport a user’s location and give access to that data to many service providers. Getting this information is, in many cases, expensive and presents obstacles to online service providers who would like to develop services based on mobile a user’s location. I was looking for the missing link between the mobile and the web world.
While there are many different approaches (and we might present some of those in the future), Xtify, a company based in New York City, caught my attention. They are creating a cloud of location information where authorized service providers can make available services using the location of their subscribers.
As usual, I was more interested in the business perspective of their operation. The following is a synopsis of my conversation with Josh Rochlin, CEO of Xtify.
I want to thank again Josh for his time and kindness to open up his business for us to learn. I believe many will have much to comment and say.
Follow up.
What is the difference between Xtify and other companies providing similar services?
We are currently the only company that is deriving location persistently from mobile devices and then building business rules around it. We source the location directly from the mobile device, rather than through the wireless carriers. This allows us to make location information available on a persistent and affordable basis.
Normally, you will need to pay per dip if you source from the carriers themselves – currently in the US, this is only possible from Sprint – with other carriers working on their own solutions). This approach can only work when you require location data occasionally. If you want to take advantage of persistent user location, a per-dip model becomes unaffordable.
“We are …deriving location persistently from mobile devices and then building business rules around it…We source the location directly from the mobile device…This allows us to make location information available on a persistent and affordable basis”
Xtify allows the mobile user to (1) persistently publish their location to a “cloud” and then (2) provide permission for a third-party to access their data in order to provide location-related information and services.
An example on how Xtify can be implemented is at http://www.seemywhere.com – which requests the latest location of the user.
So I can see your position all day long without your permission?
No! SeeMyWhere is designed to expose my location only to those with for whom I choose to share it.
Another example can be seen in at http://www.myeverymove.com. This application keeps a diary of your locations throughout the day. Because Xtify sources persistent location, I can choose to have the diary automatically update, without any user input.
These applications are only examples of services leveraging our push and pull API’s information from the “cloud”. A typical implementation using Xtify might not provide this level of visibility into my whereabouts. The location information would simply be used by an algorithm to inform a service, message, or advertisement.
To try www.seemywhere.com or www.myeverymove.com you can point your smartphone browser to either of these sites and download the applications.
Can you give me an example of a commercial application
Take, for example, companies that provide text-based mobile content (i.e. www.4info.com, www.chacha.com/, and http://pingmobile.com/). The way they work is that the user sends some these services a question, and the service replies with an answer, usually through SMS. I was trying out one of these services recently and I received strange answers to my question “Hotels in Manhattan.” The “IN” was interpreted as Indiana (a state in the USA) and the results came for hotels in Manhattan in Indiana. Then I asked for “Hotels NYC” and the results where close – I received hotels in Upper East Side of Manhattan. But at that specific moment, I was in the SoHo district of Manhattan, several miles away.
What Xtify can provide today is the capability to geo-tag an SMS that comes to the system and do this in such a way that the system will know where I am; replying with answers (and advertising) that are geographically-relevant and will therefore garner higher advertising rates.
“What Xtify can provide today is the capability to geo-tag an SMS that comes to the system and do this in such a way that the system will know where I am; replying with answers (and advertising) that are geographically-relevant and will therefore garner higher advertising rates.”
Can you elaborate on the implementation?
As I mentioned before, Xtify sources location from the mobile device. We use the best available source, GPS, Cell Tower and Wi-Fi information to determine your position and push that information to our secure servers. When a user sends a question to an SMS service, they could route that message through the Xtify database, then correlate a location-relevant advertisement to be included in the response. Xtify can communicate that “this phone is currently in SoHo, NY” and that service provider can associate an advertisement that was paid for by a business in SoHO, New York. Now the answer and the advertising have complete geo-awareness.
The market has been waiting for a solution that adds location context to their service – a solution that Xtify now provides.
So how do you make money?
We charge based on the value we bring to a customer and on the basis of the volume of transactions or processes. Let me illustrate this with another example. On many occasions, Madison Square Garden (MSG), an arena in New York City, could have unused tickets before a concert or a game. We could provide a service to MSG to set up promotions based on time before the concert and distance from the MSG arena. We can set radii around MSG (i.e. 5 blocks, 15 blocks, 1 mile). We then set time intervals (i.e. 3 hours, 2 hours, 1 hour before the event). Xtify can then push a promotional message to the people who are proximate to the venue and who have asked for a discount ticket promotion from MSG.
“Xtify can … push a promotional message to the people who are proximate to the venue and who have asked for a discount ticket promotion … This model applies to any business that has perishable inventory such as empty restaurant tables”
This model applies to any business that has perishable inventory such as empty restaurant tables.
Of particular importance to our business model is the way that Xtify is shipped on every Peek device [www.getpeek.com]. This allows developers to create services similar to the one we’ve just discussed, as well as services similar to www.peekmaps.com.
So, is it fair to say that your business model is only a B2B business model?
Absolutely, we are not a customer facing company. We provide persistent user location information for use by marketers, business developers, and web application providers. We have products and API sets that offer the ability to take an action (i.e. send a text message) based on the location of customers and users. We also look forward to working with carriers and handset manufacturers in the same way we have integrated with Peek.
How is the location relayed from the phones to the cloud?
We install a small application that pushes location information into our secure servers (“the cloud”) using TCP/IP protocol via your mobile data connection. We have intelligent algorithms that adjust the reporting frequency as necessary. That means, if you are stationary, there is no need to continually resend the same information. This minimizes the data transmitted.
Note that Xtify works today only on smartphones. Xtify requires a mobile device that can run the Xtify process in the background. We currently function on Blackberry, Windows Mobile, Symbian, and Android Devices. Once the iPhone allows background processing, we will run there as well.
“…we need to encourage service providers to rethink the way they collect and access location and realize that a much affordable solution exists…”
Who do you think are your competitors today?
The biggest competitors for us are time and intertia. Meaning, we need to encourage service providers to rethink the way they collect and access location and realize that a much affordable solution exists. Additionally, other companies will soon realize the benefits to our approach and attempt to enter the market.
A question about privacy. How are people reacting to the fact that 100% of their location information is going to be recorded and available somewhere in a cloud?
We believe the user must have complete control of his privacy and location information. Our location servers do not collect any personally identifiable data, and therefore we don’t know who is in the cloud. There is no profile, phone number, or personal email that can identify the person. All we can see is a bunch of secure user IDs running around the world. The user opts to have a trusted relationship with a service or advertiser or any other business. The user then shares their information with that service provider based on the conditions of that trusted relationship.
But the system is prone to misuse, isn’t it? What can block me from installing the application on that person’s phone without their knowledge and track them all the time?
We specifically chose to include a shortcut / link / bookmark on the mobile device so that the owner of the mobile device will know that it is there and can turn location notification off if desired. However, there is nothing that we can do about human nature, any technology can be misused.
“…We believe the user must have complete control of his privacy and location information. Our location servers do not collect any personally identifiable data, and therefore we don’t know who is in the cloud…”
Is your application for domestic applications only?
There is nothing about our business that is only domestic. Our system can work any place a mobile device works around the world. We welcome companies outside the United States to leverage Xtify for their local or global business needs.
So there is a reason for you to come to Miami to speak with the Latin American operators at LBS LATAM 2009
Absolutely! I am looking forward to participating at the event.
Personal Notes after the meeting:
It was hard for me to process during the conversation the concept of “know ALL my personal where” available in a cloud. Then I understand Josh’s point on inertia. I remember then Newton’s First Law of Motion that, when translated to business terms, can be defined as, “The tendency of the market moving in one direction, to remain in that motion direction, unless it is compelled to change that state by forces impressed upon it”
I can see now many forces that can influence this process, but this is a subject for other conversation (and for your comments).
10 Comments
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Comment by Kenneth Trueman — September 1, 2009 @ 9:51 am
Good article.
The solution sounds interesting, but with a couple of drawbacks that are inherent in a model that requires putting a client application in place. That being said, the solution from Xtify does appear to address the famous pay-per-dip issue of sourcing the data from the wireless carrier. Inasmuch as the carrier has a cost to provide that information (by generating traffic on the network to ping the device and then traffic to return the results of the ping), there is an overhead that needs to be covered. The mobile service provider is probably also charging a fee that is kept high enough to discourage too much use as well.
The company I work for, TelcoBridges, develops network monitoring hardware that captures SS7 signaling traffic, such as that generated by voice calls or SMS messaging, over mobile networks (and traditional wireline as well). In doing so, it can collect information about cell towers, timing and power, that can be used to triangulate the position of the mobile subscriber without generating additional network load to contact the device.
This approach has a couple of other advantages:
- no client-side application to install
- works on all phones, smart or not
- no need for a data plan
- no need for explicit user intervention; data is kept current by using the phone for SMS or voice; for a large part of the demographic likely to use LBS, this is likely to provide sufficient data freshness.
In the advertising example that was mentioned in the article, using TelcoBridge’s hardware, the actual SMS used to request a search also provides the geographical context required to return a meaningful result. As a result, you could search on a term as simple as ‘pizza’ and not have to add the zip code, city, or state. The SMS message would be captured and analyzed by TelcoBrides’ hardware at the BSC level with the positional data sent to the search engine (or yellow pages directory shortcode) alongside the actual search term. If you were at the corner of Lexington and 53rd in Manhattan, you would be provided with a list of pizza joints in the general area triangulated by the system. Since there are likely to be a fair number of cells in the neighbourhood, you would get very precise results.
Since this approach does not generate additional load for the provider over the mobile network (as opposed to the backhaul or data network), then the pricing model can go from one of encouraging application developers not to use the solution to one where the service provider can actually monetize the data in a meaningful way because it is being used. Instead, the economics are changed so that data capture and sharing (for a fee) are encouraged.
Please note that this approach can be used at the individual subscriber level as well as when aggregating multiple subscribers for the purpose of real-time traffic.
The drawback of the TelcoBridges’ approach — just like that of any network-based one as opposed to handset-based — is that the resulting services are service provider-specific. It either becomes a value-added specific to the service provider, or it becomes necessary to have the solution in place at all service providers so that all mobile subscribers, irrespective of their carrier, can participate…
Comment by Peter Cranstone — September 1, 2009 @ 10:00 am
Here’s the problem… “As I mentioned before, Xtify sources location from the mobile device. We use the best available source, GPS, Cell Tower and Wi-Fi information to determine your position and push that information to our secure servers.”
Why send the data to their servers. It should be possible to send it to ANY server that needs it. What if they go out of business? What if the Government wants access to my data from their servers?
This is what’s wrong with this approach. It doesn’t leave me in control of my data. It’s not a unique approach at all. All the iPhone apps are now sending my data back to their servers. What’s happening is the web is being segmented an app at a time.
The alternative approach is to simply extend the HTTP protocol and allow the consumer to send his/her data via the browser to any web service that delivers meaningful value.
Peter
Comment by Jon Ziskind — September 2, 2009 @ 4:55 pm
The true value is going to be seen with the integration with the device to run the routines associated with the location information and associated user. For example, GIS database plugged into map layering, geo-relevance with advertising, communications across devices and carriers, etc, etc. The fact that it is stored on servers in a cloud, isn’t relevant to the end user. It does keep the cost downs for the company providing the service and the ability to scale much easier. The question of privacy are going to be what is important to understand. The location of that device is known. It’s up to the users to decide how they want that to be used. As far a validity, well that opens the door to a whole new ecosystem of LBS initiatives. Being able to garner the location of the device, feed routines relative to who that person is and how the rest of the world is going to interact with that knowledge is exciting to say the very least. This opens the door to an industry that has been waiting at the gate to come out. It’s very valid and it’s very exciting. Like Xtify, we at ZOS are working to foster these initiatives.
Jon
Comment by Richard Fuller — September 2, 2009 @ 6:27 pm
Whenever wireless location is mentioned there is always a mention of privacy in the same context. Being an intermediary for location information, Xtify will be held to the highest scrutiny. Luckily the industry is making sure developers establish best practices as evidenced by initiatives by the CTIA and others: http://bit.ly/6StdY . Current best-practice guidelines want to require a relationship between the end-user and the application provider (NOT the middleware company) so that the end-user will know exactly who has their location information and more importantly, how that specific company intends on using it.
As far as the model, it is like all new markets: the “chicken and egg” problem. Developers looking for location-tagged information on potential customers would love a clearing-house of this data, if and only if there is substantial numbers for each query into their system. As a complete guess I would assume that Xtify does not have huge numbers of end-users right now. It is hard to imagine developers getting too excited by a limited resource. Conversely, if an end-user could get access to tons of neat, personalized services through this utility, there would be great motivation for them to download and try the resident utility providing location to those applications. But without the exclusively-partnered applications, it is hard for the end-user to justify taking up their meager phone resources for a utility that may “one day prove useful”.
Finally and most importantly: competition. There at least one similar effort and others that are similar enough to merit mention. For example, FireEagle ( http://fireeagle.yahoo.net) has established itself as a utility to share your location with multiple sites and vendors. Google Latitude allows you to share your location through an API and Loopt has interfaces to popular applications such as Twitter and Facebook. Others have been mentioned previously in previous comments. Having competition is actually a good thing, it means they probably have hit upon something that is of value. However, not only are they fighting against time and inertia, but also against groups that are providing similar services today (and in some cases for free). The key will be how they differentiate themselves from the others.
Comment by Claudio — September 3, 2009 @ 10:01 am
Thank you all for your comments,
I’ve checked the CTIA recommendations more than a year ago. The problem is that technology, services and business models evolve faster than the recommendations. They are a very good starting point and I recommend reading them when you approach this market.
In any case and to Peter’s point “…It doesn’t leave me in control of my data…” I have my personal interpretation. If you look at the CTIA recommendations you read this interesting paragraph: “…LBS Providers must allow LBS users to revoke their prior consent to disclose location information to all or specified third parties. Where technically feasible, LBS Providers may provide for selective termination or restriction of individual LBS applications upon LBS user or wireless carrier account holder request…”
Control of my data to restrict the access to all or specified third parties or having control of keeping/deleting the record of my whole history?
Note that in a different paragraph they recommend that: “…LBS Providers should retain user location information only as long as business needs require, and then must destroy or render unreadable such information on disposal. If it is necessary to retain location information for long-term use, where feasible, LBS Providers should convert location information to aggregate data…”
You can ask to restrict the access, but bottom line once I share my location “my” is not mine anymore (is for others to mine
) . Consumers must be aware that “free” has a price, and that companies provide location services for one ultimate reason “to make a profit” (at least most of them). Same as other types of personal information (history, pictures, videos, connections) people will need to evolve to understand the difference between privacy and personal security. But that’s a completely different discussion – see my previous notes on privacy here:” Location Based Social Networks – Is Privacy Overrated? Rules for a New World”
Glad to read this conversation.
Comment by Matthew Ahart — September 4, 2009 @ 12:20 pm
I recently read a comment in one of our forums that accessing information via the Cloud would have serious implications on “compliance” like SOX.
Just like everything, it depends. So in this case, it depends on what you mean by “in the cloud”. If the infrastructure is co-located in a secure data center and you are connecting to it from an office to the data center over a T1, technically, the DC is accessed through the Cloud, but over a dedicated tunnel.
This is completely fine to do from a SOX auditor’s perspective. It is happening all the time. Large enterprises are getting their infrastructure out of their “data rooms” in their buildings and keeping it safe in a Data Center where access links are created to that data from the offices. Even banks do this!
Now a better model is a dedicated MPLS line to that DC because now the line is completely secured and not going through the Cloud to get to the information. But from a technical perspective, they are both very secure and both compliant with SOX.
My company just signed a financial customer and we just finished their SOX audit and passed with flying colors, and they are using T1′s with dedicated tunnels through the Cloud to access their systems stored in our data center. Auditors loved it!
Comment by Peter Cranstone — September 10, 2009 @ 9:42 pm
Got to love this section… “…LBS Providers should retain user location information only as long as business needs require, and then must destroy or render unreadable such information on disposal. If it is necessary to retain location information for long-term use, where feasible, LBS Providers should convert location information to aggregate data…”
Exactly how are you going to enforce that? Note the use of the word “should”. It’s wide open to interpretation.
Privacy is the “health care” issue of mobile. There is no silver bullet here. However I believe the answer starts with the consumer. If you remember that “Trust drives Transactions”, then the best approach is to build a trusted relationship with the customer first and then leverage the location data to provide a better service.
In the comments I also see that Latitude and Fire Eagle are mentioned. Why do Yahoo and Google have to have a monopoly on my location data? Why can’t I send it anywhere I want – this is especially important when it comes to the Enterprise.
Comment by Josh Rochlin — September 11, 2009 @ 2:49 pm
Thank you to everyone who posted their thoughts. I am excited that the debate around sources and applications of location will continue to be high-profile and hotly contested. A few observations:
Clearly, the adoption rate of location-aware devices, and their use for location-relevant services, will continue to grow (and outpace the feature-less phones). As with any new technology, we see early adopters, early opponents, lots of business models, and many (…many) opinions about the “right” business model.
That said, at Xtify, we believe that successful adoption of location-based services – those that go beyond simple location look-ups – will be driven by the value (and trust) proposition offered to the user. If the return on a users’ investment is sufficiently high, the barriers minimized, and privacy protected, adoption rate will increase.
We believe that our approach to privacy, utilizing our Trusted Location methodology, differentiates Xtify and further reinforces our business. Our model ensures the trusted relationship is between the user and their trusted entity (business, advertiser, etc). The mobile user always controls access to their location information. We neither collect nor store the user’s individual identity.
Xtify’s differentiation is in our logic, algorithms, services and deep analytics. We believe that offering location providers (carriers, hardware manufacturers, individual businesses, consumers) the right tools to observe, manage, and take action on location will drive our success in the market. In short, location will require intelligence and we stand ready to provide it.
I’m looking forward to meeting as many of you as possible next week at Claudio’s conference in Miami. We can continue this debate then!
Comment by Ray — January 19, 2010 @ 10:30 pm
How Xtify is different from Skyhook?
How Xtify can compete with Skyhook?
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