One observation about the way connectivity networks are becoming virtualized and disaggregated is that we most often see that the disaggregation brings new suppliers or partners into the business. Functions once conducted mostly internally become externalized.
What we tend to see talked about relatively rarely are ways that disaggregation in other industries might similarly lead to opportunities for connectivity providers to enter value chains or assume new roles in other industries.
Internet of things, private 5G or 4G networks and edge computing are among the areas where telcos or connectivity providers might have opportunities. But such opportunities tend to be anything but easy.
In some cases that occurs because other contestants seemingly are better positioned to take on new roles in disaggregated operations. Existing system integrators, for example, might be better placed to act as 5G private network operators than would telcos. The same might be true for IoT system integration as well.
In other cases the financial return from acting as app, platform or other value suppliers is challenging enough to discourage active pursuit. That is true for efforts to craft vertical market internet of things value propositions, for example.
The other observation is that it almost always is easier to move down the stack and vertically integrate a lower-level function than it is to move up the stack and integrate a higher-order function.
In other words, the business process provider knows precisely what it requires from functions l;ower in the stack.
But companies lower in the stack “have to guess” at what potential buyers higher in the stack will want, and have to be prepared to support all potential buyers (lowest common denominator) or optimize for a few verticals.
There are other approaches, such as attempting to create horizontal platforms of some sort. Some argue that operating neutral host systems for in-building mobile network access are an example. Some might argue that operating as a wholesale-only access or transport platform is an example of horizontal specialization.
Most such examples use the computing industry notion of “platform” and not the business model sense of “platform.”
Operating edge computing real estate facilities might also qualify as a “platform” function, as the term is used within the computing industry (software or hardware that other software or hardware can run upon).
But real estate functions for edge computing suppliers are not a “platform” in a business model sense, where an entity makes its revenue by facilitating exchanges and transactions between buyers and sellers.
Disaggregation in other industries does offer opportunities for connectivity providers, albeit difficult opportunities in most cases.
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