Rod Randall Stirs Debate and Coins a Phrase at NGN 2004
November 04, 2004
NGN 2004 Daily Update for Wednesday, November 3
STUPID VS. SMART: A GREAT DEBATE
Industry debates are fun when they get down and dirty, and consultants
David Isenberg and Tom Nolle didn't disappoint when they squared off in the NGN 2004
Great Debate, which posed the question, "Are Smart Networks A Dumb Idea?" Both men
deployed their utmost rhetorical tones and stagy gestures as they argued their cases.
Isenberg, of course, coined the term "Stupid Network." He and Nolle stood at separate
podiums on either side of the same stage, but they addressed each other from different
planets. This was best demonstrated when Isenberg asked audience members for a show
of hands: How many are employed at large companies? When about a third of the audience
raised 'em high, Isenberg asked them to keep their hands up if they felt that, in
these large companies, they were "working up to their creative potential." His point
being that the Internet's "stupid" core is what allows for innovation and creativity
at the edges, which Isenberg suggested is the domain of the small, entrepreneurial
technologist--while the big carriers, with their stifling legacy of top-down-ordered
"smart networks," allow people to stagnate.
Nolle's response: Raise your hands again if you work for a large organization.
Now keep your hands up if you value the ability to "pay your bills and feed your families."
That was the heart of Nolle's argument: "Economics really do matter," he said.
"We thought that technology triumphed over dollars. And it doesn't."
yesterday: Stupid networks don't make money and thus can't be sustained.
Nolle clearly doesn't believe, as Dave Passmore suggested yesterday,
that the incumbent local exchange carriers (ILECs) are in danger of entering
a "death spiral" as they face declining revenues in their traditional lines
of business. Instead, Nolle sees the ILECs as the only carriers with a hope
of survival, as their scale, assets and incumbency give them better margins,
even with declining revenues, than any competitor could dream of.
From my vantage point, Isenberg scored his most effective points when he
focused on the original "Stupid Network" arguments that time has borne out,
namely that applications we now take for granted, like email, likely would never
have emerged from a telco "smart network," because of the painfully large amounts
of time and money that those organizations typically spent before introducing
any new application. I have a tough time imagining AT&T or the RBOCs fostering
the Internet, left to their own devices (which tended to have 20-year amortizati
on periods).
On the other hand, Nolle is right when he points out the lack of a real business
case for a lot of these innovations. Isenberg had tried to make the argument that customers demand
the new applications that the Internet is enabling; Nolle's response was to stride
over to moderator Dave Passmore and offer him $20 for his car. His point: Just
because you want something and you want to pay a certain price for it, doesn't
mean you can or should get it at that price. Or, as Nolle more bluntly put it:
"Screw what the customer wants, unless you can have a meeting of the
minds with the guy who has to produce it."
Isenberg's retort: "When you say, Screw the customer, I think
that pretty much sums up the Smart Networks point of view."
Sorry, I didn't mean to wimp out with an "On the one hand...On the
other hand…" writeup of this debate. But I also don't think it's my job
to decide who was right and who was wrong.
You're smart; you'll figure it out.
NGN 2004 Daily Update for Tuesday, November 2
NETWORK INNOVATION: WHAT WILL CUSTOMERS REALLY WANT?
This is the big question; Passmore alluded to it in his intro, when
he wryly noted, "Give people what they want, and maybe they'll pay for it."
The question of what customers will want was also the topic of today's first
plenary session, a panel that featured two equipment vendor representatives
and two venture capitalists.
The issue of what customers will pay for came up in the presentation from VC
Rod Randall, senior managing director at Vesbridge Partners. Randall acknowledged that
he was courting controversy when he declared flatly that, "The stupid network is a
stupid idea." That assertion is guaranteed to draw some return fire tomorrow, when
consultant David Isenberg, who (approvingly) coined the term "Stupid network,"
debates the concept, squaring off against another consultant, Tom Nolle, president of CIMI Corp.
But for this morning, Randall had the stage to himself, and he charged
that "stupid networks" lead to "stupid and unsustainable business models."
In other words, if the network is stupid and the carrier is just a bit-hauler,
the carrier's business quickly becomes unprofitable, unfinanceable,
and unstaffable--what innovative top thinker wants to work at a dying entity?
The question, said Randall, is "How can you make money on the net?"
A portion of his answer surely can be filed under "Sentences Never Before Uttered at NGN:"
"Moogle Moogle Moogle."
Randall was clearly savoring his newly-coined term, a hybrid of "mobile" and
"Google." Here's his idea for something customers really want: A service that
and you're Moogling.
Funny words aside, Randall is dead serious about this idea.
He pointed out that basic 411 services are already a $9 billion a year business.
So why wouldn't a "411 information service on steroids" be a hit?
A service provider could cook up a batch of Moogle by combining
push-to-talk, zero-delay natural language and search capabilities.
Randall thinks this would be "a huge service opportunity for the service providers."
Randall also riffed on the idea of premium bandwidth services, suggesting at least
one new business model I hadn't heard before: Supply people with broadband-capable access,
but enable broadband speeds on an ad hoc basis, potentially with the party
on the other end footing the bill. Randall's example of how this might work:
An online travel site might pay for a customer to have a broadband
session in which the company provides a richer multimedia experience than the customer
typical gets, as a way of selling that user on a travel package. It's kind of like 800 numbers for converged broadband.
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