Articles tagged digital services

You ever get that feeling, as you spin through vast libraries of media and information at the twitch of a finger, shuttling between the supercomputer in your pocket to the one on your wrist to the paper-thin one that hinges shut on your desk, that things just aren’t, I don’t know, better?

Well, according to The New York Times, things aren’t. At least not economically. From the article:

For several years, economists have asked why all that technical wizardry seems to be having so little impact on the economy. The issue surfaced again recently, when the government reported disappointingly slow growth and continuing stagnation in productivity. The rate of productivity growth from 2011 to 2015 was the slowest since the five-year period ending in 1982.

The piece contrasts two ideas. The first is that today’s digital innovations aren’t yielding the economic increases that the big-time inventions of yesterday did—electricity, modern transportation, medicine. The opposing idea is that the only thing we can blame today’s digital depression on is for making us more impatient since most industries have not fully embraced the transformation yet and will need to before gains can be realized. That’s the way all technology is, proponents of this side argue.

Meanwhile Silicon Valley continues to find investors and is every day closer to finishing that valley-sized spaceship so they can leave the Earth and all of us suckers behind.

Seriously, though, The New York Times piece is an interesting read. Although its hope vs. cynicism ping-pong tournament seems to fall a little more on the latter scale (cynical pieces always make for more interesting, more cathartic articles for some reason). But whether we haven’t fully committed to digital transformation or we are mistaken about assumptions of ever-marching technology progress, one thing is for certain…hold on, just got an app notification.

Photo credit: David Ingram

Right now, Mark Zuckerberg and Satya Nadella are in a submarine at the bottom of the ocean dodging krakens with Captain Nemo. Sort of.

Microsoft and Facebook, companies known historically for work apps and status updates, are laying a data cable across the Atlantic Ocean.

It’s actually something they’ve been involved with in the past, but this time, it’s different. Previously, they’ve done it as part of a consortium of telecoms, who all had a share and a stake. This time, the telecoms don’t own the cable or the bandwidth. Microsoft and Facebook are cutting out the telecoms to create their own international data network.

There is an irony in this.

For the past decade, telecoms have been eying and trying to transform to be more like the Facebooks of the world, to be digital service providers, to veer away from being just network operators, where profits are flat, legacy infrastructure is burdensome, customer perceptions are negative, and competition is rising from nimbler over-the-top players piggybacking on the telecom’s own massive network investment.

Yet, here are two of the biggest digital service providers…turning into network owners. Of course, the cable will be operated by a telecom, but the telecom is just a vendor in that scenario. The bandwidth is pretty much all Facebook’s and Microsoft’s. And it’s not a unique situation. Google is laying its own fiber in various cities. Facebook is buying up dark fiber (underground cables that aren’t being used anymore) to better control data flow and to expand its network into new areas.

In other words, not only did digital service providers muscle telecoms out of lucrative digital services by using the telecom’s own pipe, now the digital service providers are now muscling telecoms away from the pipes themselves.

In more other words, the ones this time of Michael Murphy, president and CEO of telecom consultancy NEF in the above-linked Wired article, “It’s going to get interesting. Who is the real telecommunications provider? It’s going to take some of their business away.”