road to utopia

into the fast lane

In the long term, I still firmly believe that it is modestly priced, high volume consumer services like telephony, television, video on demand, music, gaming, and e-commerce that will be the Utopian goal. There are many obstacles that must be overcome first: political reforms (regulation, laws, licenses, spectrum), radical changes to content provider business models, network infrastructure investments (fiber, packet radio, and IPv6), cost reductions to high end gear (optical CPE routers, IP enabled home theaters), and a critical mass of adopters. There are too many factors to accelerate artificially; it must happen as a natural progression.

Consumers are notoriously frugal. They generally purchase the minimum to satisfy their needs. Anything beyond what is good enough becomes a luxury. To succeed in this market, it is crucial to provide services perceived to be essential rather than merely luxurious. Without that economy of scale, a provider cannot recuperate the cost of building out the infrastructure to neighborhoods.

In the meantime, there are high value services that can address immediate needs. Businesses are always in search of productivity gains and improving efficiencies.

  1. Collaboration – With enterprises extending their global reach, workers in remote offices will need to collaborate more effectively. Video-conferencing, remote white boarding, groupware, and other real-time collaborative work tools will significantly reduce the need for in-person meetings. Expensive, time-consuming travel will become largely unnecessary.
  2. Teleworking – Urban traffic congestion, costly office facilities, and a diversely distributed global workforce are all forces that will encourage greater use of telework. Effective online collaboration and improved broadband access will enable workers, who want the convenience of working from home, the ability to do so without any compromise in productivity.
  3. Business Integration – This is already underway. Supply chain management and other forms of business-to-business (B2B) integration are improving the ability to outsource. Concentrating on core competencies implies contracting out non-core work to business partners, who do consider that work to be their core competency.

Enterprises are willing to invest in incremental improvements to business efficiencies, because there are measurable returns. The capital markets exert great pressure for such improvements to be demonstrated each and every fiscal quarter. This market can be penetrated without having to incur sizable short-term losses, unlike the pricing that is necessary to penetrate the consumer market. Whereas information technology is often considered a luxury to consumers, it is clearly essential to many businesses.

The productivity gains at work become catalysts for workers desiring similar lifestyle improvements at home. Online collaboration with remote coworkers leads to online collaboration with family and friends. Telework leads to home workers applying the technology already installed towards personal entertainment. General availability of the technology tends to stimulate new opportunities as users discover new ways to apply it. It is this manner of cultivating markets that will lead us to the end goal.

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