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?