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February 23, 2003
Commodity Networks
Jim and I have been talking about the commoditizing of networks for a while now. Last week, we had a conversation about how technologies in general can be commoditized, and what UEN's role might be in commoditizing technologies.
Many years ago, I first read Discipline of Market Leaders. The authors show how successful companies have had to focus their efforts on one of three disciplines: Operational Excellence, Product Leadership, or Customer Intimacy. I found the principles of this book useful in starting two companies. McDonald's is probably the best example of Operational Excellence, where your local mom'n'pop burger stand (assuming they have good food) may be focused more on customer intimacy.
When I started at UEN two years ago, I looked forward to fully exploring the discipline of customer intimacy. UEN has a pretty fixed customer base, so it seemed like the perfect opportunity to get to better understand our customers and how UEN could provide value-added services to them.
Last week, we talked about how UEN might be more valuable commoditizing the technologies than trying to find the ones we can most add value to. This would be an operationally excellent focus, instead of the customer intimacy that I had assumed best fit UEN.
After thinking about it for a while, I think that commoditizing technology fits UEN's mission much better than adding value does. Commoditizing implies wide availability, enabling as many people as possible to use a technology. It also implies reducing costs, both for purchase and use, so they can afford and justify using. These factors are both important to education.
We began last year to commoditize the network with the wide-spread deployment of inexpensive high-speed networks. Other technologies that might be more valuable as a commodity include network management, H.323 video conferencing, network security and voice-over-IP.
Posted by pete at February 23, 2003 10:51 PM
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