By Wedge Greene
and Trevor Hayes
It would seem to a disinterested observer that the future of the telecom industry will be decided by the victory of one armed camp or another: Edge vs. Core – but what if we could find the right symbiotic way to make money together?
Sailing off the edge of the world?
They are ill discoverers that think there is no land, when they can see nothing but sea.
[Sir Francis Bacon]
In the old days, the edge of the telecom network was just the analog black phone. In the POTS, world the network owners were the service providers (SP). These national and regional companies planned and built the network and the edge. They knew their well-defined market boundary, for this was the boundary of their home territory. The call was the product. SPs controlled what edge devices were available since only their devices could connect to this network. They bought from their domestic equipment provider and software developer – indeed, like old Ma Bell, often all three divisions were in one corporation. Do you long for these simpler days? We do not.
As competition became national policy, the market divided into service providers, equipment manufacturers, and independent software vendors (ISV). Next came intelligent networks, digital networks, and some consumer product choice. But everything proceeded in an orderly fashion. Planning cycles were long and well managed.
Then came data networks and the Internet; vendors began to specialize and their numbers exploded. Access was the service product while networks were the asset being built. The capacity of networks began to exponentially increase and specialized networks were built to service the many new protocols that were churned out by standards groups and industry associations. This was the communications industry’s industrial age. But still, all was controlled in the executive clubs of the communications industrials where long term purchase, cooperation agreements, and interwoven managements provided closed leadership to the telecom industry.
During this period of explosive growth during the nineties, a new strategy surfaced. It was not good enough to make money from calls and data connectivity. Explosive growth and explosive valuations required more revenue than could be pulled from these “network-based products.” We remember the strategy as it was introduced to engineering at MCI in the mid-nineties: to survive we had to move up the value chain. This was seen as moving up the old DEC stack from network protocol and connectivity to the applications running on the computers connected to the network. We would do this by combining the “intelligent network” to the data networks.