Enron attempted to become a bandwidth trading platform two decades ago, but imploded in 2001 for reasons directly related to accounting fraud. Highly controversial at the time, Enron’s notion of creating a platform for buying and selling bandwidth services appears not to be ahead of its time, but very much in line with current thinking about platform business models.
It is hard to say what could have happened had Enron not gone bankrupt. The basic model of creating an exchange seemed to work in a number of other markets. And there was a logic to the hope of creating a more-liquid marketplace where complex products could actually be traded.
But there was significant resistance from many other partners, for one obvious reason: the exchange was touted as leading to lower prices, and it was not deemed to be “in our own best interest” for other big carriers to put their assets into such an exchange.
The offer was real-time contracting and delivery of capacity at network pooling points. It was one example of “on demand bandwidth provisioning,” long an industry hope. Enron promised an “efficient” market. But other potential partners might have heard “commodity pricing.”
About the last thing capacity executives wanted was anything that would turn their core product into a “commodity.”
Two decades later, businesses in many industries are urged to “become platforms,” earning their revenue by facilitating transactions.
It’s the same idea, twenty years later.
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