Telco’s role in web 2.0

One of the things i've been pondering on for a while is when is a good enough network connection not in fact good enough.?

This would seem to be incredibly important to  web services, SaaS or RIA’s because they are utterly dependant on the performance of its underlying network. (god how did the SaaS market ever forget the importance of the OSI model!!), Now in this instance the network just happens to be public, but its still fundamental.Now i know that incumbent Telco’s have been predicting (hoping?) that this webcentric model will fail quite simply because there is no Quality of Service on the underlying infrastructure supplying your critical business services.

They will be rubbing their hands together in glee, seeing their doomsday predictions of public network saturation nicely fulfilling their own value propositions for their private networking solutions.

That’s the really interesting thing about utility based services. You just take them for granted, gripe about how much you pay on a montly basis and EXPECT it to always work. That’s really important, because the only time you really notice what a utility does and how important it IS, is when they aren’t there  – blackouts, roadworks, water shortages…. you get the idea.   The other really interesting thing about utilities is that they make pretty damn good money, sure occasionally (less occasionally than incumbent telco’s) they get into regulatory hot water, but if you know what you are, keep your nose clean and aren’t too greedy, they do very well.

Now why is this important??? Well I think there's a new play on the cards in the Telco industry. Existing Telco’s could stop wasting their shareholder funds, divest their VAS business groups and optimise their provision of large pipes and make loads of cash.

Another play could be that the network infrastructure providers (Cisco, Juniper and Alcatel’s of the world) may have a long hard look at who their customers really are or could be. Currently these guys (for the most part) are quite a long way from the end users (lets call them businesses), disintermediated from their customers in fact. What if they decided to be those core network utility providers? Because in a lot of instances they are essentially doing the network provision and management already, they just need a billing engine (and lets face it, if you were a startup telco you’d have a much better opportunity to do this properly because you are just that, un-encumbered!!!)

What if they sold directly to the governments in the nations that they work within list this example? Then essentially you’ve got huge capacity on tap (wow another on-demand model), you get rid of the regulatory issues (the network is free) its all about the services.

Would this model provide us with the public networking experience and quality web services needs? I don’t know to be honest…what i do know is this. The current commercial model of existing Telco’s isn’t aligned to Steve’s vision and untill thats addressed the  reliability  of  web based services is  going to be questionable.

    Posted by Paul 

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