Business Model Chaos: From Wireless to CDN to Security

The technology industry is going through a dramatic transformation unlike any time in the past. Once non-related tech segments are converging across the globe, and those that are likely to be impacted the most are the incumbents. Apple plans on making cars, Google is becoming a wireless carrier, Facebook and Amazon are building middle mile fiber infrastructure across the world, Facebook is taking on Cisco, Amazon is taking on Fedex/UPS, and wireless bandwidth speeds are likely to increase 100x by 2020, as Ericsson, Samsung, Alcatel-Lucent, and other wireless infrastructure players bring mind-boggling innovations to market. CEOs are playing it cool during the day, but at night time, it has to be a nerve racking experience trying to figure how these innovations are going to disrupt their once comfortable market positions.

Recent Developments

  • Sundar Pichai, an SVP at Google in charge Android, Chrome and Google Apps recently stated “we don’t intend to be a network operator at scale” and “we are thinking about how WiFi and cell networks work together and how to make that seamless”
  • According to The Information, Google CEO Larry Page has not kept it “secret of his contempt for large wireless and wireline players, which he feels aren’t innovating fast enough”
  • Deutsche Telekom is investing heavily, along with many other companies in 5G technology; supposedly, 5G is going to be “hundreds of times faster than LTE
  • Researchers at University of Surrey tested 5G speeds in excess of 1Tbps
  • Samsung announced “two industry milestones in the development of 5G” achieving 7.5Gbps speeds, and stable connection speeds at 1.2Gbps
  • Grande Communications, a small carrier in Texas, beat Google Fiber and AT&T in offering 1Gbps FTTP (fiber-to-the-premises). In 3-5 years, 1Gbps in the US is likely to be the standard
  • Akamai plans on hiring 1,000 employees this year, with many of those openings in their new unit “Emerging Mobile Products Business” – not a coincidence, as they see major disruptions in wireless infrastructure coming soon

The list of major breakthroughs goes on for pages. These innovations will disrupt incumbents and start-ups including AT&T, Verizon, CDNs, Cloud Providers, Automobile companies, and so on. What kind of impact will it have on industries? Below are some worse case scenarios:

Worse Case Scenarios

  • In 5 years, bandwidth limitation in the last-mile (wireless and wireline) will disappear, ushering a new era of high definition and high resolution applications and services
  • Usage based businesses models that make money by charging on a per GB will cease to exist (on the consumer side only)
  • New business models will emerge, as business transform themselves into global cloud application delivery networks
  • Google will become a major wireless carrier competing with AT&T and Verizon
  • DDoS attacks will jump into the Tbps, as Gbps bandwidth becomes the norm for home connectivity
  • CDNs will need partner with each other and carriers, in order to fend off the large Tbps DDoS attacks
  • CDNs focusing on ecommerce will get into the video delivery business, as virtual reality takes hold with online retailers
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