Convergence and Consolidation

18 April 2005

The big ideas:

What’s the point? The software companies are consolidating, and the pace will quicken. If you assume that bandwidth and storage costs are approaching zero as incremental costs of doing business, you come to some interesting conclusions about what might be next. With a long-haul bandwidth provider sitting on a global network of fiber optics and (at least) six or eight empty conduits, but trading at two bucks a share, you get some perspective on bandwidth prices. Then, you see a major technology company that has already concluded that bandwidth and storage costs approach zero. They’ll definitely want more of both.

Finally, if you can’t make it all work together, you’ll have to find someone who can show you how to transform the operations of your business around the notions of convergence and consolidation. Pick the wrong player and cheap bandwidth, great software, web services galore and your position in the market will be undermined by those who don’t blunder.

This is absolutely a time when every business should be asking (and answering quickly), “Do we know and have what it takes to compete in a world of ubiquitous technology?” If you can’t answer that question, be assured it is getting answered as we speak in Bangalore, Guangzhou, Tianjin and Shenzhen.

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