Telecom is Dying; Distributed Computing is What Comes Next

Telecoms is dying, says consultant Martin Geddes. “The industry that acquires the name “telecoms” is slowly going out of business.”  

That does not mean physical infrastructure is going away. “We still need physical infrastructure,” says Geddes.

“It is the active layer is in the process of being absorbed by the computational cloud borg,” Geddes says, while access and transport are being commoditized. To put it another way, telecom is a form of computing.

“What we are really building is not a ‘telecoms’ network any longer, but an ‘ultracomputer’ or ‘hypercloud,’” Geddes argues.

“Unfortunately for investors, the telecoms business is at the losing end of this change.” Though voice and messaging have been the prime examples so far, there is more to come, he argues.

The next decade will also find “most enterprise access revenue going down the drain.”
 
What is needed are varying and segmented levels of data service resilience and performance, that can be tied (loosely or tightly) to delivery of some kind of application outcome or experience, a theme Geddes has emphasized in the past.

Cloud computing also will have a key impact. “We are seeing rapid growth of the scale, scope and value of giant cloud platforms,” he says.

“Payment for communications is going to increasingly come from the cloud providers and their customers, via wholesale mechanisms,” he says.

 
“This blows up the financial model on which investments in telecoms are presently made,” says Geddes. “The tragedy about to unfold is that telecoms business asset values price in neither the downside risks (you’re now the Uber driver), nor the upside opportunities (you’re the restaurant whose high-margin alcohol sales go up as posh people don’t need to drive home or slum it in a taxi).”
 
“If that wasn’t bad enough, the regulatory system appears determined to pretend that this all isn’t happening,” says Geddes. “We are seeing in a variety of cases where common carriage (and the circuit mentality) is being misapplied to a distributed computing system.”

“The result is that regulators are tasked with regulating an industry that is disappearing and being subsumed into another,” Geddes says.

What replaces telecoms (and cloud) is a distributed computing industry.