By Mike Saxby
It seems as though more than 90 percent of blogs these days are about cloud, although I have yet to see one address a collateral trend that could truly change how we have done business for the last 20 years. As we all know, bandwidth is in high demand and the pricing continues to drive towards zero. When it comes to data and Internet we have sold customers a fixed price service at a specific speed — that is about to change!
As an example, it is clear to see that cloud with pay-per-use compute will also change how bandwidth is acquired. Take an industry leader like CenturyLink/Savvis and their VPDC. Now, with a traditional telco vendor, we can easily add a node to an existing network for a minimal cost, turning up a virtual private data center. In this model, the compute is pay-for-use yet the bandwidth is not, so is it logical to assume that’s next? I think so.
I believe 2013 will be the beginning of elastic bandwidth. Customers, especially those in data centers, will pay a very nominal port charge or maybe just an install NRC charge and bandwidth will be billed based on usage.
So how will it impact your business? Some would argue that companies buy more bandwidth than they need and this could further drive total billed revenue down. Others argue that customer demand for bandwidth is ferocious and ever increasing. I tend to agree with the latter. Giving customers the ability to use more will most likely increase consumption. This will also create increased demand for network and expense management, a common offering among most top partners. This will no doubt, along with cloud, make the procurement of telecom and technology more complicated, further solidifying the indirect channel as the go-to-market strategy.
Is your business prepared for elastic bandwidth?
Michael Saxby is chief strategy officer of Telecom Brokerage Inc. (TBI), responsible for business development, strategy, process improvements and marketing initiatives. Before joining TBI, Saxby spent 14 years at VIRGO, a business-to-business media company. He served many roles during his tenure, including group publisher of the service provider and channel segments of the Communications Network.