[network] On the net or in the net?

Last week, long time Internet pioneer Vint Cerf signed up to be Google’s chief internet evangelist”. His previous job was with the telecoms firm MCI.

In the BBC report, the story concludes with the observation that

The move of such an influential figure is significant
in that it marks the way that power in the net world has
shifted from telecommunications firms, such as MCI,
to companies that do something
with that infrastructure, such as Google.

It may seem that way, especially in the light of eBay’s takeover of Skype, and Google’s introduction of Google talk.
There is still a large divide between the world of telecommunications and the world of IT applications. Telco’s measure in bits, IT measures in bytes (there is only a factor of 8 difference). With telco’s a kilo is 1000, with IT people it is 1024. This is just the surface. I have made a career out of bridging this gap.

The power struggle alluded to has a long history. Telcos like to see applications, or services, as living ‘in the net’. Think call redirect, think voicemail. The IT people see this net mainly as a pipe that connects users to one another or to their applications, living ‘on the net’. Voice over IP is a case in point. With VOIP, the function of a telephone exchange is no longer the crossroads through which all communications pass, but more like a directory that tells user devices where their counterparts are located (this is SIP, the session initiation protocol).

Yet, with all this predominance of ‘on net’ thinking, people tend to forget that even Skype calls still go over a network, be it wired or wireless.

Is content king? No, it is not, as Odlyzko shows in “Content is not king” but it is on the rise. It is just that it morphs into applications that live ‘on the net’, applications such as Google and eBay.

What does it mean for Google? As shown in another of my items, most of the Google budget is spent on things that have no clear immediate business model. With the recruitment of Vint Cerf, and other smart people, Google’s business model seems to be to give enough smart boys enough big toys, and some profitable innovation will come up, sooner or later.

What does that mean for telcos? For one, voice is apparently still profitable, otherwise Google and eBay wouldn’t invest in it. Apart from the obvious fact that running a communications network is still a respectable business, there are lots of services that are complementary to the pipes. ISPs are one, servicing customer networks is one, application acceleration is one. If you control the pipes, have the money, and know how to handle millions and millions of customers, there must be some value in the net.

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