February 28, 2008
Scott McNealy joins the luddites urging telcos to do more content
Sun has not exactly been a model growth company in recent years. I have a new understanding of why. It’s called living in your own world, removed from the real world. Telcos have been all to focused in delivery of content for far too long and it has distracted them from their primary business of access. It’s put the long their long term viability in peril, and could cripple the US economy. So what does Sun’s McNeely recommend for them?
“I have explained to every telco that either you become a destination site, or the destination site will become a telco,” McNealy said at a news conference at Sun Microsystems’ Worldwide Education and Research Conference in San Francisco on Wednesday.
Internet destination sites are already gaining on telecommunication companies, McNealy said, giving as examples eBay integrating Skype’s VoIP (voice over Internet Protocol) technology and Google trying to buy wireless spectrum and help build cables across the Pacific Ocean. Microsoft’s attempted acquisition of Yahoo would create another behemoth that could compete with carriers, such as by combining Microsoft’s technology with Yahoo’s existing VoIP and messaging services.
“I think the telcos have to make sure they don’t get marginalized to being just bit providers and bandwidth providers,” he said. On the other hand, carriers may be able to head off Internet sites by limiting the bandwidth available to them, so destination sites may need to affiliate with the carriers, he added. (from Yahoo News)
Telcos have never been good at content. Companies like Google create their own infrastructure to insure that the end user has access to their content in the face of telcos demanding surcharges or giving preference to their own substandard content. The only reason a content company builds their own network is to insure distribution. McNealy is smart enough to understand this if he wants to. Then again, Sun is not doing well. Maybe he thinks he can sell more servers to the telcos is he can convince them they need to do more content.
Filed under Content, Editorial, competition by admin
Comments on Scott McNealy joins the luddites urging telcos to do more content »
D. Dog @ 3:47 pm
You know McNutty is so wrong its crazy….
I have a different model to suggest to the Duopoly and QWest might be the best test case. Think about Google for a minute. They own no transport except short haul to Tier 1 ISP’s. They don’t even own the content that people place on their systems. They do own servers and code.
Well let’s take QWest’s case. They could offer content ala carte by owning none of it. They provide a menu structure as a basic convenience to their subscribers. Maybe an API to that menu system so if a customer wanted to remote control it they could. Plenty of 3rd party hack opportunity. They expand their server base at appropriate points in the network. They then go to Google, the IPTV, ITVP and other content providers and say — “Hey we are willing to forward store your content. We get a dime a play for anything over 15min in length.
So in the money dept how does this play out. Outgo - Well on the network side QWest’s costs should drop. Their long haul capacity requirements should drop as they are encouraging a storage strategy. caching server technology is cheap and well formed these days. Also, unlike Verizon they no longer pay for program managers to handle lineups, content decisions and the like. The customers are doing that.
On the income side they now open up a vast venue of indie content, foreign content etc. Again the subscribers are making the decisions on what they want. If 10000 customers want Japanese anime 24×7 and there is a provider, QWest sets up the server space and adds an entry to the master menu. The provider manages the updates. QWest collect their fee for every viewing. The provider gets their money via subscription between themselves and the customer.
No more 500 channel management, No more content decisions, that moves to the customer. No more ‘bundles’ its ala-carte. No more moaning about bandwidth allocation. To the extent you can its all pipe. Getting Google to cache content closer to the user benefits all parties involved in faster response times due to reduced backhaul traffic in the local loop.
[Aside: As a society we envision ourselves as a consumers in a national scope. Reality however still says that 80% of all customer purchases are done locally. And that purchase pattern represents 75% of the US GDP.]
Sounds too good to be true and probably is. But then nobody has tried to my recollection.
admin @ 4:53 pm
It’s too simple, and you can’t micro manage it. That drives the telco suits crazy. Lets wait for one of them to go broke, we’ll take them over and try it.:-)
D. Dog @ 6:36 pm
LOL!!