Some inevitable changes are hard to see in prospect, yet are ‘obvious’ in retrospect. The next communications revolution is ‘made for cloud’ access.

A colleague pointed me to a Forbes article “For Today’s Telecoms Companies, Customer Experience Is Just As Important As Download Speeds”. It was written by Huawei’s global president of assurance and managed services.

Well, I told you so!

In the short term, you can bamboozle people with meaningless “speed” or nebulous “best effort” promises, but that’s not a sustainable strategy. You don’t need to be very bright to understand that broadband revenue is dependent in the long term on delivering consistently good enough application experiences to end users.

Back in 2007, I gave a keynote presentation at the Telco 2.0 conference when I was Chief Analyst. The content is still up there on their blog: “Beyond bundling: the future of broadband”. The core thesis was that broadband faces an inevitable transition to a digital supply chain and application logistics model.

This in turn led to the development of the Telco 2.0 broadband “business model map”, which laid out the fragmented future of the broadband industry. (See parts 1, 2, 3 and 4.) It’s looking like a pretty solid piece of work ten years on, bar the over-optimistic timescales.

My prediction was that we would see a “slice and dice” model arise whereby the network resource would be divided up by quantity and quality. SDN (which didn’t exist then) is now clearly executing the quantity part. But I had not then appreciated how immature the industry was in managing quality, and how long it would take to fix this.

Today’s broadband is the digital supply chain equivalent of “break bulk” cargo shipping. This is what we had in the 1950s and 60s, and which was the historical, physical cargo model for millennia. Then container shipping arrived, and the model abruptly changed, along with the power and profit structure.

Telecoms is now facing a similar radical transition, as it moves from a hardware to software focus. Software-defined networks are the future, and the upcoming RINA architecture is the universal “information transport container”. Meanwhile, ?Q metrics are the “volts” of quality, whilst bandwidth is the “amps” of quantity. (Or maybe it’s frequency and watts!)

The future profit is in a new model, namely (assured) cloud application access.

This transformational change requires mastering three new skills for digital supply chains:

•  To calibrate the network, and establish a quality floor (so as to assure the experience).
•  To coordinate the experience along supply chains using ‘quality contracts’.
•  To control the experience, by trading resources in space and time.

These, in turn, are built upon underlying mechanisms to measure, model and manage the network resources.

Over time we will not only adopt new metrics, and new architectures. We will also engage with new business models, such as creating a ‘VISA network’ for the exchange of quality-managed data. This will deliver new technical incentives and economic rewards for success. These rewards may well be based on new cryptoeconomic models using coins or tokens.

The end result is a transformation that, like with container shipping, is de facto a new industry. Digital logistics is coming, and it will be radically different from the current broadband Internet access model, and much better for it. Nobody will want to go back to the past once they have experienced its benefits.

The centre of power is going to shift from telcos to the cloud and content giants. (Indeed, in many ways it already has.) It will no longer be possible to use spectrum cartels, exclusive franchises or local loop monopolies to maintain supernormal profits.

The move to a resource trading model will make the owners of the trading platforms the most powerful players, just as happened in physical logistics. The old telecoms pipe model will be killed by ‘high frequency traders’ arbitraging away all the quality pricing anomalies. The murder will be done by Professor Stochastics with a scheduling weapon in the work non-conservatory. (It’s a mathematical insider joke, sorry.)

Now there’s only one small wrinkle left. When I came up with the term ‘Telco 2.0’ back in 2006 (it’s in my handwriting, at least) I assumed such a thing existed. Now I’ve become a yobbish killer poacher of telcos rather than a genteel network gamekeeper, that’s not so obvious.

The unfortunate and unintended legacy I have left for my former Telco 2.0 colleagues—for whom I presently have nothing but goodwill, admiration and respect—is a possibly tricky rebranding to Cloudlogisticsco 1.0.

Let’s come back in ten years and see how things have progressed… if I am filthy rich, and lots of telcos are dead or dying, then I will be entitled to tell you “I told you so!” once more.

(Although on reflection, the accumulation and hoarding of wealth is hardly making this world a better place, so skip that bit.)