I have huge respect for Scott McNealy, so this came as a surprise and a bit of a shock: Telcos falling behind in Internet race. No, not the title, that's a given in this world, but what he said about it.
Telecommunication companies need to go beyond just providing bandwidth and look into acquiring Internet destination sites that are heavily trafficked, Sun Microsystems Chairman Scott McNealy said on Wednesday.
Hmm, hands up all those who think that any company not capable of creating a high traffic site from scratch would be able to manage successfully one that they bought from someone else. I thought so. Scott is usually more astute than to suggest that.
"I have explained to every telco that either you become a destination site, or the destination site will become a telco," McNealy said at a news conference at Sun Microsystems' Worldwide Education and Research Conference in San Francisco on Wednesday.
Internet destination sites are already gaining on telecommunication companies, McNealy said, giving as examples eBay integrating Skype's VoIP (voice over Internet Protocol) technology and Google trying to buy wireless spectrum and help build cables across the Pacific Ocean. Microsoft's attempted acquisition of Yahoo would create another behemoth that could compete with carriers, such as by combining Microsoft's technology with Yahoo's existing VoIP and messaging services.
No argument there, and the next bit is pretty well conventional wisdom and economics 101
"I think the telcos have to make sure they don't get marginalized to being just bit providers and bandwidth providers," he said.
Again, hmm, if they weren't going to get marginalised and become bit pipe players, I'm pretty sure that somewhere within their ranks they would have found people who would be able to implement such a strategy. Oh wait, AT&T had one, but they fired David Isenberg for stating the obvious that Scott just summarised.
But then THIS!!!???
On the other hand, carriers may be able to head off Internet sites by limiting the bandwidth available to them, so destination sites may need to affiliate with the carriers, he added.
Good god, did he just suggest a carrier strategy of blackmailing and shaking down popular websites? Did he just throw out the whole net neutrality argument in exchange for a blatant financial survival strategy based on interference in the end to end model and not even comment on it?
And how does that brush off fit with this?
During a speech earlier in the day, McNealy slammed the U.S. government for not being interested in adopting open-source software. McNealy said the farther he goes from Washington, the more governments get interested in open source
I have to hope that the reporter or the editor didn't get it. Its a worry either way.