Era of Pervasive Computing Shapes Communications Revenue Drivers

Eras of computing matter for telecom professionals and the broader telecom industry for any number of reasons, but chief among the implications is that computing eras create, shape and form demand for communications.

The era of pervasive computing, which is likely to supplant the era of mobile computing, provides an example. At one level, the idea that computing devices will be embedded all around people implies communication as well. And since sensors and pervasive computing devices (things) will vastly outnumber people, that suggests a lot more communication connections.

But computing eras also shape other parts of life, such as who and what needs to communicate, over what distances, in what manner, how often and with what bandwidth requirements. Those issues in turn create potential demand for revenue-generating services, features and apps.

There are many ways to characterize eras of computing, but it is safe to say that the present era is the second of perhaps five eras where communications is essential for computing, since computing is largely accomplished remotely.

In other words, “everything” is networked and connected.

In the era of personal computing and use of the web, that mostly meant connecting PCs with remote computing facilities. In the cloud era, we reach a new stage where “most” applied computing tasks are partially, substantially or nearly-completely conducted remotely, making communications a necessary part of computing.

In the present era, demand for communications to support computing has been driven by global adoption of mobility, plus mobile data, plus video and other internet apps.

In the next era, communications demand will be driven by internet of things sensors and other forms of pervasive computing.  For communications providers, that is the good news.

The bad news is that in the era of pervasive computing, not every instance of communications necessarily generates incremental revenue. We already see that with Wi-Fi, Bluetooth and other forms of local and short-distance communications.

Nor, in the pervasive era, is it possible for any access provider to directly profit from most of the applications that use a network. Potential revenue exists in increased demand for wide area communications and therefore local connections to such networks.

But the relationships are far from linear. Basically, incremental revenue grows less robustly than increased data usage, and threatens to grow far more slowly than network capital investment.

That is among the key challenges for the “dumb pipe” internet access function. That is not to say the only revenue drivers are dumb pipe internet access. Access providers do provide owned applications (messaging, voice, video). But those legacy sources are either declining or morphing, with new suppliers providing effective substitutes.

That is why surviving retail suppliers must “move up the stack” into owned apps, platforms and services.
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