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Six Month Generational Iterations: They’re Coming

Peter St. Andre’s short but incite-rich piece titled Going Mobile contains this paragraph:

Another challenging idea: the average time to pay off investments in the older generation of switching equipment was 30 years (according to one speaker at the conference I attended). The time to payoff is now 3 to 5 years but technology generations (read: software-driven innovation) is on the order of 18 months and accelerating. So anyone who is deploying expensive infrastructure and expecting to reap the profits from their investments is deluded. What happens when technology generations occur every 6 months or less (yes, the time is coming)? Only small, decentralized technologies will thrive, forget about all that centralized telco stuff.

Some telco’s are already retiring equipment purchased just two years ago.  3 to 5 years between technology iterations sounds about right. But let’s think about how the Web 2.0 / Voice 2.0 model will impact this world.  It’s a commonly cited statistic that many of today’s Web 2.0 companies have releases as frequently as weeks apart.   Now imagine a hosted communications service, centralized to just a few data centers globally.  That’s a Web 2.0 application, but it’s providing voice.  It can be updated, easily, every few weeks as required.

That, by the way, is what iotum has done consistently since January.  The most brittle linkage in our system is the link to the network element that performs switching on our behalf.  It’s at that point where the service becomes unevenly distributed.  Practically, what this means is that some of our customers have implemented the new conference calling feature we announced in February, and some still have it on their roadmaps for future implementations.

Kind of blows up the old CAPEX model, doesn’t it?

{ 3 comments… add one }

  • Adam Uzelac April 11, 2006, 7:18 am

    I completely agree and also see an anti-IMS spin peeking around the edges of this argument. I would also like to comment on the "The most brittle linkage in our system is the link to the network element that performs switching on our behalf." comment. Wouldn't some kind of linkage or policy between the network elements the application uses and the application itself make sense? Isn't the relevance engine experience somewhat related to the transport mechanisms? Just thinking aloud here…..

    Adam

  • Alec April 11, 2006, 8:11 am

    The approach we've taken is to put a small shim into the network element, and partner with the manufacturer of the network element. One of the things we've considered doing is wrapping the whole thing inside a SIP proxy instead. Makes it a little easier. Yes, in fact, we do have a linkage :)

  • Andrew April 11, 2006, 8:36 am

    I have seen the CAPEX as low as 3-5 months, on some traditional switching equipment. You can still find tons of hardly used Nortel and Harris gear lying around that is being sold off (some for the second time) for 8-10 cents on the dollar, and with the new Telehop colo coming, hosting will be about 1/2 price from what I have heard, so don't expect this model to completely dissapear anytime soon.

    It is still a tough sell for someone that wants to do dialaround backhauling to pay roughly 2×3 times as much for new PC based termination gear, unless you are going pure SIP play as you mentioned. Hence; why I call Iotum a 'killer app' :)

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