Does Google’s New Personal/Home Assistant Change the OTT Game?

Google opened a lot of interesting topics with its developer conference this week, and I think there’s a common theme here that aligns with other industry moves and foretells something even more important.  We are moving closer to the concept of the digital assistant as our window on the world, and that could open a big pathway to a much greater use of cloud computing.  In fact, it could become the largest cloud application.

The mobile apps phenomenon was built, perhaps primarily, on the basic truth that a mobile user does things differently than a desktop user.  Not only are they restricted in terms of interaction real estate, they are more tactical in their information needs.  They want answers and not information, and while that goal may have been formulated in mobility, it’s maturing even in the home.  Amazon’s Echo and Alexa seem the inspiration for Google’s assistant and Home products.

Home control based on buttons and dials is self-limiting simply because there’s a limit to the number of these direct controls a user can keep track of.  Voice control is a much more intuitive way of handling something—tell your digital assistant to turn off a light or ask it what conditions are outside.  The number of things you can control may expand, but your pathway to exercising control is always that singular assistant.

Google seems to have drawn inspiration from another source—Facebook—for the second big move, which is the Allo app.  Allo is a chat-driven agent, similar to Facebook’s enhanced Messenger.  What seems important in Allo’s positioning is the enhanced notion of context, which you can see in the quote on Google’s blog, “Because the assistant understands your world….”

Context is critical in exploiting the interest in wearable technology, the support for which is also being increased according to Google.  Wearables offer a closer-to-life interface than a phone or tablet, which means that they naturally expect a more contextual level of support.  The notion of suggested responses to texts, for example, demonstrates contextual value and at the same time makes a watch accessory more useful.

Google’s emphasis on these points isn’t new, either to Google or to the market, but I think it makes it clear that a contextual personal agent war is going to happen, involving Amazon, Apple, Google, and Microsoft.  That’s going to accentuate both context and personal agency, and that’s what could be a game-changer, in terms of network and cloud infrastructure and even in terms of the OTT revenue model.

Logically speaking, both contextual input collection and personal agent analytics would be more effective if they were hosted locally to the user.  The most demanding contextual analysis is surely based on geography, both of the specific user and the user’s social and retail frame of reference.  IoT is an example of a contextual resource, and if you’re going to analyze the conditions in New York it makes sense to do that in New York because otherwise you’re hauling telemetry a very long way.  Similarly, if you have a New York user asking questions they’re probably relating to that user’s home, work, or immediate environment.

All of this argues for a wider distribution of cloud resources, and I think this is magnified by any context-and-agent wars among vendors.  Google probably has greater geographic scope than the others, so wouldn’t they want to play on that benefit?  And if there’s wider distribution of cloud resources then there’s more resources local to any user, any mission, which could encourage competition among cloud users for “local” facilities whose propagation delays are smaller.

The hosting of agent and contextual processes is clearly a cloud opportunity, but it also has implications in networking.  If we assumed that every user went to an agent approach, then search-related and even casual web access might all migrate there, which would mean that non-content traffic could be short-circuited into a cloud agent rather than sent to a user/device.  While content traffic is the great majority of traffic overall and the largest source of traffic growth, most content traffic really doesn’t transit the Internet, but lives inside content delivery networks.  Something that frames web flows differently might have a very large impact on how “the Internet” really gets connected.

One of the major challenges that this happy transformative trend has to face is that it potentially undermines the whole OTT model.  An agent doesn’t deliver search results, at least not a good one.  Obviously a verbal request demands a terse verbal response.  That means that the market model shifts away from search, which means that Google in particular has to be thinking about how to become a leader in delivering “contextual advertising”.  This is yet another incentive for context and agency to expand greatly in importance.

I’ve said before that neither contextual communications nor personal agency can work well if you assume all the data is collected and correlated inside a mobile device.  What has to happen is a combination of two things.  One, a personal agent has to evolve to become a personal cloud process that’s doing the analyzing and responding, through either a mobile device or home-control portal.  Second, contextual information has to be collected and subject to ad hoc analytics to generate useful insights into the meaning of a request, based on social, environmental, and retail conditions.  These notions can be expanded to provide ad support.

Contextual services of any sort could be presented through an API for use, and access could be either paid or based on ad sponsorship.  Environmental and geographic context readily adapt to this approach; you can imagine merchants promoting their sales as part of an application that guides someone to a location or along a path, particularly if they’re walking.  Even the personal agent processes could be sponsored or paid on a subscription basis.

Google may be at a disadvantage versus the other players (Amazon, Apple, and Microsoft) who might address personal agents and contextual programming, simply because the shift we’re discussing would directly impact their primary revenue stream.  The other players have a more retail-direct model that relies not on sponsorship but on user payment for the services, directly or through purchase of a device.  However, because these trends are largely promoted by the increased dependence on mobile devices, it’s hard to see how Google could simply refuse to go along.

Facebook might be the determinant here.  Context is social as well as geographic, and Facebook has a direct link to the social context of most mobile users.  They know who’s connected to whom, what’s happening, and increasingly they can tell who’s communicating directly.  Adding geographic context to this is probably easier than adding social context to geography, at least in the simple sense of locating the user(s) in a social relationship.  IoT would be a difficult addition for any player.  Could Facebook launch an IoT approach?  It seems outlandish, but who would have thought they’d have launched Open Compute?  And Facebook’s core application isn’t subject to disintermediation like search is.

All face-offs don’t end up in active conflict, so this contextual-agency thing may or may not mature to the point where it could really impact the market.  If it does, though, it’s going to bring about an almost-tectonic shift in the business model of OTT and a truly tectonic shift in the organization and connection of online information.