There is a fundamental shift coming to Internet services - how individual and business consumers pay for them – Kervin Pillay, CTO at Internet Solutions.
More data and more devices. More bandwidth. More apps. More opportunity, more development and growth and profit and intelligence. Fewer physical boundaries to doing business and finding markets. More connectivity in every sense of the word.
This is a vision, and already a consumer demand. As individual users, we’re no longer satisfied with the Internet just at home. Enterprises want faster links, faster storage, more computing power, more data centres to store data – both big and small. For any Internet-based company competing for consumer eyeballs, a website that loads mere milliseconds slower than a competitor site is a business risk.
It is only the Googles and Amazons of the world that can invest in their own undersea cables and fibre networks to guarantee the bandwidth speed and latency their business demands, until the service they want is sufficiently commoditised.
Most enterprises must weigh up what the market offers, and debate whether VPN or broadband suits their business better – just as consumers weigh up LTE or FTTH. CIOs must justify paying one vendor for a 10MB line when another advertises 100MB lines at the same price… and sometimes the bottom line today is more important than tomorrow’s reliable, stable connection.
Of course, there is a use-case for every kind of connection, and ultimately, I don’t think many people truly care about the underlying technology. Whether company or consumer, we just want the Internet - on every device, all the time, as fast as we can get it.
A hybrid network is the answer to “which access technology is best?” Instead of forcing a choice between various imperfect options, it invites the creative implementation of many technologies driven by budget and business requirements.
The more fundamental shift that I foresee coming to Internet services is how individual and business consumers pay for them. Consumption against a zero base is what consumers are demanding.
In practical terms, this means paying a nominal fee for a line with the potential to boost to a pre-defined bandwidth. For the time that a 4K movie is streamed, or the month’s sales transactions are uploaded to head office, the ISP will bill for the full capacity of the line. The days of bundled services will be over as service providers implement flexible billing for flexible services.
Precedent has been set by cloud providers that allow customers to spin up virtual machines, deploy them for a matter of minutes, and pay for the service without any further obligation. The impact on revenue forecasting and managing demand for service has been solved – and now consumers know it’s possible.
The ISP that delivers the same for connectivity will command market share.
As little as two years ago, elastic business models of this nature could not be implemented as software-defined networking was not sufficiently mature, and we didn't have price points for the multi-gigabit links we do today. It’s so exciting that as technology has become affordable enough to become ubiquitous, new business models that benefit suppliers and users are shifting the market.
When broadband services are a purely consumption-based input cost, connectivity has a direct, positive impact on an enterprise’s profitability.
Companies currently amortise the base-cost of running their networks - including bandwidth, links, and support personnel – over the course of the financial year. The alternative is the entire value chain directly correlating customer demand to the cost of servicing that demand. This means scaling up and down according to customer demand leading to improved cash flow and more focused business planning in terms of predictable cost of sales.
As enterprises digitise their processes and assets – including web portals, and CRM, ERP, and billing systems – the easier it is to run these companies like an elastic IT system. What remains is to determine how to make an enterprise’s people ‘elastic’ too.
The fact is that enterprises are not employing IT teams as they used to. The IT team, network team, security team and server team of perhaps 50 people has been replaced by a CIO and a couple of IT managers managing an outsourced vendor. There is no infrastructure to maintain when machines are virtual, in the cloud, and even software is a service.
Ironically, where we are heading is remarkably like computing services thirty-odd years ago. Few enterprises owned a computer then – they were too-complex machines the size of a city block. Instead, companies purchased a slice of time on someone else’s computer during which they would run whatever kilobytes of whatever processes they required. Of course, today enterprises deal in gigabytes and terabytes but the premise is similar.
Recognising the need to progress from which Internet services we deliver, to how they are delivered, Internet Solutions is securing strategic partnerships to decouple from any one physical access medium. We are successfully trialling consumption-based models with clients in Kenya and Nigeria.
We’re conceptualising billing models that will enable us to offer clients multiple access mediums at multiple speeds for practically zero if there is no demand for connectivity.
Importantly, we are examining how we make use of, and enjoy, the Internet as consumers. Our enterprise clients are consumers too, accustomed to the frustrations and conveniences of home and mobiles services, and as vulnerable to promises of more speed, more bandwidth without transparent disclosure of how reliability may suffer.
Like them, we just want the Internet.