Almost always, big changes in networking architecture and platform change the range of possible business models and market shares in the application, connectivity and infrastructure businesses.
For example, the move to disaggregated, open and virtual networks automatically creates new potential roles for system integrators. Where platforms could be purchased monolithically, new networks can be assembled from various suppliers.
To note only the most-obvious possible changes, monolithic platform suppliers could lose some market share to new suppliers and network integrators who supply the network components and the complete networks.
In other words, when we move to disaggregate functions and elements, we automatically create a new need for system integration.
So we must now look for the emergence of new names in the system integration business, as it applies to core networks and access networks. At some point, if they are willing or forced to concede some roles and revenues, the legacy monolithic network suppliers also are in line to act as system integrators, using elements and software sourced from any number of possible suppliers.
Consider an earlier change that produced precisely those results. Because “layers” are the technology architecture, disaggregation is both possible and desirable.
Look at data center or server businesses. Hyperscalers now build their own servers, they do not buy them. They can do so because layers make it possible. Custom software can run on commodity hardware; and commodity hardware can be built “in house.”
Hyperscalers build and own their own wide area networks, they do not have to buy services from WAN suppliers on their core data center to data center routes.
Hyperscalers build their computing fabrics from modular arrays of servers, not monolithic mainframes. Whenever possible, they virtualize both compute and storage operations, rather than dedicating hardware to those functions.
In a related process, “everything” is moving to virtualized supply. Enterprises and consumers can buy “services” rather than owning their own hardware and software licenses. Customers can buy computing or storage features “by the instance,” as a service, rather than building and operating their own data centers.
It is an under-appreciated fact that when the global telecom industry selected internet protocol as its next generation platform, it also--knowingly or not--chose a layered business model.
IP is not simply a framework for moving bits around; it is a business and revenue architecture as well, separating logical functions in ways that allow whole industry segments to emerge in a disaggregated way.
In other words, the salience of the term “over the top” is precisely the result of a “layered” approach to building communication networks. When we disaggregate edge devices and functions from transport layer functions, and those from application functions, the revenue streams and possible business models also are disaggregated.
That is why Meta, Amazon, Netflix and others can build businesses using networks without owning networks.
IP was not just a technology platform change. It was a profound business model change.
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