Synchronoss (SNCR) has been identified for several years as a leading “enabler” to carriers, (also referred to as a “service provider IT vendor”) with their leading role in mobile activations and, recently, in cloud related areas. While its cloud business, as a white label provider to carriers, is growing strongly, the company has positioned itself for expansion in the cloud area in a number of other directions as well.
Based on discussion with the company, SNCR regards itself as a strong player in mobile cloud, which has been focused around carriers. But it is now also developing new revenue streams. An example is WorkSpace, a cloud platform aimed at SMBs, which allows secure syncing, sharing and collaboration. Initially WorkSpace is being offered through SNCR’s carrier clients. It is expected to roll out in the current quarter, with Vodafone. However, presumably it could be offered directly by SNCR or through other partners.
SNCR’s carrier customers include Verizon Wireless, parts of AT&T, Vodafone, Telstra, Reliance (India) and others. The company claims about 90 million total end user subscribers to its various white label offerings.
The company stated that it had 67 million customers whom it categorized as “cloud” customers, as of 12/31/13. Of these 53 million were users of its Network Address Book (NAB). A further 12+ million were personal cloud adopters and 2+ million used “smart mobility.”
SNCR is also building a web of other relationships and offerings, initially around its carrier base for distribution. However, it clearly also intends to seek other partners for these products. Among its recent initiatives:
NFL – The company states that the NFL Mobile App on Verizon phones is a SNCR app. The customer can download and get information, and watch games (VZ Premium customer) and get updates. The company points out that it opens up monetization opportunities for the carriers, the NFL and SNCR. An example they give is “home-gating” where at home viewers may share the experience and vendors can give coupons. They also state that the app will potentially cover ordering merchandise and mention a possible in-stadium app.
Napster – The company recently announced The Social Music Platform which integrates Napster into the SNCR personal cloud offering for carriers. The company states that this enables the carriers “to offer a mobile-first, real-time, global music sharing platform through the cloud.” The platform allows a user to post a playlist in their NAB, which can be shared with friends and others. (A Verizon Premium customer could also watch streamed live concerts.)
Internet of Things – In early 2014 SNCR announced its Integrated Life platform. The company states: “ From smartphones and tablets to connected homes, automobiles, and health and wellness devices, the Integrated Life platform connects and activates everything and provides a simple activation experience for the next generation of connected devices.” The initial carrier customer for the platform is AT&T that will use it to power the AT&T Drive Studio and AT&T Drive. (Time Warner Cable has also been announced as a customer.) SNCR software will not be in the devices but will be used to manage content flows from devices. Regarding the ability to monetize data, particularly data belonging to individuals, such as health/fitness signs, a SNCR exec stated that right now it is unclear who owns the data. He expects the industry to move towards a resolution that the user owns their own data and that companies will have to get user consent and pay users for the use of the information.
SNCR currently earns revenue from carriers for its cloud services, based on fees that are typically set per month, per subscriber, per device and per storage used. However, in instances where the company does not host the service, it may depart from this model. In the case of Reliance of India, the carrier is hosting the platform, so SNCR used a license model. The company indicates that the rapid anticipated growth of the cloud market in India could have strained SNCR’s capital capacity, so SNCR found it preferable not to host the system.
With Android phones, SNCR may be able to embed software on devices, via their carrier relationships. Apple, of course, does not permit this, so with iOS the SNCR software would have to be delivered via an app. However, SNCR can achieve a strategic footprint on millions of devices and they certify the software on a handset.
We at mobilecloudera.com have been anticipating a drop in storage pricing to near zero over time and the SNCR management has publicly stated that they share this view. This appears to be one of their drivers towards becoming more involved with content delivery, and, we would expect, transaction services.
One of the primary assets of the company is its NAB offering. This feature offers a profile of the device and the user. The “address” information is not just the individual’s contact list, it includes information about the user’s device and contact information from emails, social networks, message services and other sources. SNCR describes the value of this feature to the user as: the NAB “automatically synchronizes and updates address books across a wide range of mobile, internet, and service provider sources. This cloud database offers total access to rich contact details including phone numbers, personal and work addresses, email, IM IDs, social networking IDs, and contact pictures– all in a proven, highly scalable platform.”
A key question is where the development of the NAB will go in the future. A SNCR exec we spoke with pointed out that it gives the company the ability to create “context” for its carrier customers. They can understand user relationships and develop a calling circle from NAB information. They can, for example, give key customers and their key relationships preferred treatment and special offers, thereby reducing churn.
The whole issue of how to target customers better is a vital one for not only carriers but all businesses. SNCR has a significant penetration into the area of deriving voluminous structured information from its cloud platform with its NAB. As it enriches the nature of the profiles, whole segments of e-commerce, e.g., fulfillment, advertising, could open for it. The company has put in place its cloud strategy aided by a number of significant acquisitions between 2010 and 2012. The strategy is still taking shape, so we would consider it quite likely that additional strategic acquisitions are in store.