A common challenge faced both by wired and wireless providers is the huge capital recovery challenge each faces from building of broadband networks at a time when voice revenues are dropping. Which is why the search for video, content and ad revenues is so urgently a priority. Sun Microsystems, for example, is adapting its Java System Content Delivery Server for mobile networks.
Sun's CDS provides a common infrastructure for delivering all types of content, including Java applications, games, ringtones and wallpaper. It also lets operators create storefronts, viral marketing tools and payment systems. It lets the carriers and other content providers set up services more easily and quickly, the company said.
Sun's move also illustrates another change that has taken place in the global telecom industry. Once upon a time, service and technological innovation was driven by the carriers themselves. That, after all, was what Bell Laboratories was all about. These days, innovation is in the hands of industry suppliers, not the service providers.
Which illustrates why major service providers no longer can hope to profit over the longer time by technological innovations. The suppliers will simply sell the latest and greatest to all the other contenders. Think back to competitive local exchange carriers buying Class 5 switches. Nice, but undifferentiated.
Instead, the sources of enduring value will have to be sought elsewhere. Knowledge of discrete customer segments and requirements will help. Better ways to move products out of the "factory" and into the hands of end users also will help. Unique content probably will help at the margin, but only at the margin. The bulk of interesting content will be offered by one's major competitors. And the problem faced by service providers there is pretty much the same as the technology supplier problem. All of the content suppliers will be anxious to sell as much of what they own to multiple buyers.
Oddly enough, it may prove to be the case that more efficient and effective channel relationships, part of the process of moving services out of the factory and into the market, will provide more enduring differentiation than content or technology platforms.
Monday, December 4, 2006
Different Platforms, Same Problem
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apps
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
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