Slowly But Surely Software Will Eat Mobile World Congress Too

As 60,000 people flooded Mobile World Congress in Barcelona this week, multiple bars and restaurants were suddenly hit by wave after wave of men (it’s mostly men) in blue and grey suits. The suits at MWC are there to do one thing. Sell mobile base stations to each other, get carrier partnerships for their new Latin American MVNO (or similar), and generally be those mobile corporate drones that flood the Fira conference centre annually. This year some companies have gone all out with their trade stands – Alcatel’s looks like a cross between MacDonalds and a scene from Logans Run. The irony that socialist troops paraded on the same ground during the 1930s is lost on most. But amid all this razzmatazz and hype about the future of mobile, one can’t help wondering: Has Mobile World Congress outlived its usefulness?

The signs are there. Carriers are losing their position as the centre of gravity in mobile. It used to be the case the that big stories were about Verizon/AT&T/Vodafone/Whichever signing some big deal. That’s no longer the case. Today it’s all about software and handset operating systems like Windows Phone and Android (Apple never exhibits, but now and again you can spot their executives wandering around).

These days the conversation around mobile is all about apps and platforms. Angry Birds launching on a handset or tablet is the news, not some carrier deal.

And that news breaks all the time. It doesn’t need a handshake deal over a lunch in a Barcelona restaurant. The crowd-sourced GPS app Waze is now in 22 languages and was entirely driven by viral growth – no carrier deal to get it ‘on deck’ was ever needed. The same story is repeated millions of times.

Games companies are no longer dependent on carriers and device OEMs. The app-based startups are now pulling the levers on the mobile ecosystem, because they have the ears of the users.

Apps stores now offer a global distribution platform for consumer and enterprise startups. Sure, the carriers are still important, but dealing with these people is like pulling teeth. As one entrepreneur said to me, unless you’re talking to the guy at a carrier with a billion dollar budget, you’re going no-where in the conversation. And that guy is always too busy to talk to you. So you may as well engineer some viral growth on your own.

And increasingly it’s the carriers coming and talking to the startups, not the other way round. Evidence of this was on display this week when Foursquare’s Denis Crowley was seen brandishing a large pile of business cards. Last year, Crowley was a virtual unknown at MWC. This year he’s one of the event’s biggest stars.

Time and again I’ve heard in the Barcelona bars that the big mobile networks are getting worried. Their SMS and voice revenues are being aggressively attacked by startups with voice and message apps. They are looking “to the Web guys” – as they call them – for some answers.

Indeed, Telefonica is even going further. It’s planning to extend it’s existing “Wayra” incubator programme, which has proliferated in Latin American countries, to London, Berlin and other European hubs. They will be investing 50,000 Euro in 10 companies every six months, taking a 10% stake each time. Clearly Telefonica has woken up and smelt the coffee: It’s not going to get access to new innovative companies fast enough just by doing it in house. It needs help.

In the now-famous phrase, software is eating the world, and it’s really eating the mobile world. Dropbox, and the like are also commoditising operating systems and may eventually do the same to the mobile world. Consider this, “HTML5” is now the fastest growing key word in job postings according to Accenture.

All of these trends are making massive mobile trade shows less and less relevant, because the pace of innovation is now moving at the speed it takes for someone to download an app.

The other reason Mobile World Congress’s influence in waning is very simple. I’ve spent the last few days wandering between events set outside the restrictive, suited-up environment of the Fira. The number of “fringe” events has sky-rocketed. Indeed, London-based mobilista and uber networker Helen Keegan even decided to launch a full blown Fringe programme, Mobile Heroes.

We even had a little taste of Silicon Valley in the shape of the Bubble over MWC mini conference, just opposite the MWC official venue.

Many of these smaller, focused gatherings have seen VCs and developers networking with innovative startups that could never afford the expensive stands at MWC, and probably wouldn’t want to.

Lastly, MWC will be moving to a brand new purpose-built new site next year, further away from the bars and restaurants where informal networking takes place. It may make the suits feel safer from the notorious picket pockets that flood the city every year, but MWC will lose what it had left of a connection to those people outside the echoing trade halls.

I predict the “Fringers” will continue with their events next year, and eventually it will become clear that all the hottest companies will be found not inside the gates of Mobile World Congress MWC, but outside, building their own eco-system.