If there’s one thing that service providers denounce, it’s being classified as the plumbers and pipe fitters of the Internet, destined to move bits between co-location facilities. With the software-as-a-service (SaaS) and Web 2.0 revolutions in full swing, service providers are pounding the table, insisting that they have evolved beyond the mundane task of moving bits to become “service provider 2.0” companies.Allan goes on to demonstrate that the true advantage that these SPs have over startups is their understanding of scale, though he is less than certain that they will be able to take advantage of the opportunity.
I believe the telecom providers have never moved beyond being the plumbers, though innovative plumbers that have figured out all kinds of ways to charge you for every turn of a faucet. Doubt me? Just look at the Web 1.0 world. Every single Internet access provider I have used has offered me a "home page" of their making, with supposedly advanced services for accessing mail, news, search and other key features of the early Internet. And in every case, I quickly replaced their tired page with either my My Yahoo page or Google. Not a single one was able to offer me anything innovative enough to see them as leading edge technology in the Web content space.
The same will be true for SaaS (Software as a Service), FaaS (Frameworks as a Service) and PaaS (Platform as a Service). They may be great at scaling network architectures, pretty damn good at scaling computing infrastructures (making one or more Bells a player in the compute capacity space), but they haven't got a clue how to provide the art that makes Internet content compelling. I've worked with telecoms and Internet access providers in the past, and I wouldn't trust them to create an ERP package, social networking site or even an online photo album that would hold a candle to Salesforce.com, Facebook or Flickr respectively.
It all comes down to the layering that Isabel Wang points out some major players are evangelizing these days. To quote Isabel:
Damn straight. Think about the implications of the above. To expand on those definitions a little bit, if you want to cover all of the bases in the Web 3.0 world, you have to deliver:
Amazon and Microsoft made me realize that Internet infrastructure solutions should be - will be - delivered in 4 layers:
(a) Data centers/physical servers/virtualizataion software
(b) Utility computing fabric comprised of large pools of servers across multiple facilities
(c) Application frameworks, such as Amazon's web services APIs
(d) Shared services, such as identity management and social networking
- servers (physical and virtual) with supporting network, storage, power, cooling, etc. systems
- automation and management intelligence to deliver service levels in an optimal fashion (insert SLAuto here) on that infrastructure
- some killer APIs/frameworks/GUIs to allow customers to apply the infrastructure to their needs
- all of those core capabilities that customers will require but will not want to build/support themselves (such as the things that Isabel notes, but also there is some SLAuto here as well)
The SPs that Alan references are great at Isabel's layer (a), and have a head start on delivering (b). However, when you move to (c), all of a sudden most service providers fall down. Even the wireless guys rely on Java / Microsoft / Nokia / etc. to provide this interface on their networks. Today, there are no telecoms, hosting providers or other Internet service provider that comes even close to handling (d).
Is anyone handing all four layers? Sure, the software companies that know how to scale: Google, Amazon, Microsoft, Salesforce.com, Ebay, etc. These guys worked from the top down to build their businesses: they wanted to provide applications to the masses, so they had to build (d), (c) and (b) in order to keep the required (a) manageable. Some (soon most?) of these guys are working to make a buck off of the rest of us with their technology.
It took startups--quickly growing startups, mind you--to work through the pain of being dominant Web 3.0 pioneers. However, even they don't own the entire infrastructure stack needed to do truly dynamic web computing, and they are really still pretty damn primitive. (For example, while many of these vendors have internal automation to make their own lives easier, they offer their customers little or no automation for their own use.)
Telecoms will always own the networks that in turn make the rest of our online lives possible. They may also acquire companies that know how to do the software infrastructure side a bit better--identity infrastructure especially seems like a good telecom business; after all, what is a phone number other than a numeric user ID? But they will not likely be the owners of the social networks of the future. They probably will never be the dominant capacity providers in the utility computing world. However, owning the network is a powerful position to have.
Network neutrality, anyone?
Update: You should read the comments to Alan's article, as well. Lot's of very smart people saying much the same as my long post, but in far fewer words. :)