[AusNOG] Interstate Networking

[Mark Newton]

On Aug 21, 2015, at 4:32 PM, Robert Hudson <hudrob at gmail.com> wrote:

> The world is changing.

Yes. The unstated subtext of your scenario is that the price of raw connectivity and hosting is reducing to the point where the traditional role of the “service provider” is facing disruption.

A business can build their own network out of infrastructure components. Or they can pay you to build it out of the same infrastructure components and sell it back to you. If it’s cheaper, easier, and/or more reliable for them to choose the first option than the second, then what do you think will happen to service provider margins?

(A few years ago the rest of you would have been acquiring services from people like Bevan, then applying your own markup to the result, and reselling it to the Robs of the world. Bevan now appears to have positioned himself at a point in the stack where he can collect virtually all of the margins from providing service to people like Rob, to the exclusion of basically anyone else. I wonder how rapidly the number of Robs in the world is growing, and what that means to the rest of the industry’s margins?)

(Also note that Rob has just described how he can build his corporate network without acquiring services from Telstra. The world is changing, indeed.)

  - mark