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By Curt Finch
The result will be that they will ultimately end up only providing the network access. The pace of innovation in the software world is so much faster than it is in the network provider world that incumbent telcos who are used to longer product life cycles will find it impossible to match a company like Skype, which releases new software every quarter.
How The Telecoms Are Changing The Net
• Cell phone pricing: Not long ago a company like Tivoli or Vignette was able to sell software at high prices to desperate CIOs at cash rich companies. Those days are very over. Software as a service (SaaS) providers like Freetimesheet.com or Amicus.com (provider of Zimbra hosted mail services) have adopted a pricing model lifted from cell phone service providers.
If you had to prepay for five years of cell phone service when you bought the phone, you would examine your options much more carefully than if you were just handed a free phone and a low monthly fee. Every software maker has seen the writing on the wall by now. This writing was originally written by cell phone companies. What it says now is "SaaS" is the way of the future.
• Speech recognition: Other telecom technologies such as speech recognition are starting to show up in integrated Web applications, so you will be able to, for example, fill out your timesheet by talking into your cell phone while you’re stuck on MoPac.
• Commoditization pricing: When Uncle Sam broke apart AT&T, long distance prices began a plunge from 25 cents per minute to the current pricing of zero. This took about 30 years. Software makers are finding that the twin gravitational forces of SaaS and open source are moving prices similarly for undifferentiated software applications, except software makers will not be given 30 years. Try three years -- maybe. The world is flatter now and things are moving dramatically faster.
The Future
Network providers will slowly but surely give up on providing applications to end users as software makers run away with that prize. WiMax and more prevalent and higher quality video chat capabilities will make us all more able to work from home when MoPac and I-35 are locked up. And it will all happen much more quickly than anyone thinks. Who expected 10 year olds to be running around with cell phones 20 years ago? “Bet on the innovators” is better advice today than it’s ever been.
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