Post #46,959
7/26/02 1:34:27 AM
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More reasons
1. Poor and outdated internal process. This isn't so bad for the new comers like Sprint but the old companies, AT&T and the Baby Bells are all overloaded with managers and internal paperwork. I'm close enough to the internal billing process of one of these companies, close enough to know that they really have no idea how much they are selling on a month to month basis.
2. Buisness models built around being bought are also a horrible problem. During the bubble there where a huge number of companies that more or less set out to be bought as a buisness plan. This doesn't sound bad until you realize that the way to be bought is to drive down the selling price of the company.
It may seem stupid to do that since the executives are driving down their own stock at the same time, but they know they will get a huge cash payment to go away after the sale. This lead to companies running up debt and other stupid stuff just to drive down the value of the company.
3. Buisness plans built around getting a monopoly, not competing in the current market. This is the problem that kills airlines all the time. Everybody is selling at below cost in an attempt to get a strangle hold, at which point they can jack up prices freely. But everybody bleeds until they get the monopoly.
4. Buisness plans built around regulation, legislation and lawsuits, not selling what the customer wants. Why sell what they customer wants when you can leave him no choice but buy what you are offering. This sounds good but it tends not to work until you actually have a strong monopoly.
5. Aversion to 'wasting' money on hardware improvements that can be 'better' used to do flashy and expensive things like buy other companies. The more often the CEO can get in the press the better.
6. Failure to plan ahead. It's been obvious for at least 10 years know that a high speed, digital network was the way to go. But laying the ground work would mean making investments that wouldn't pay off for a long, long time and nobody is willing to do that when maximizing the profits over the next 3 months is the goal.
Jay
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Post #47,082
7/26/02 4:54:21 PM
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The best that they can do
is offer a package. Long Distance, Wireless, DSL/Broadband, etc. Many Baby Bells are doing this already. They hope that it will evetually average out and they make a profit out of it.
Hidden expenses of DSL, it costs more than the electrical power of a Redback router, someone has to pay for the tech support to answer the phone lines. They usually contract this out to another company not associated with the Baby Bell but paid to answer the phone lines. I know because I did this for a month for one of the contractors. They get two or three weeks of training and then hit the floor running answering the DSL Help Lines. Most of the calls are for bungled Installs, or people trying to connect to the DSL before their due-date and wondering why they aren't getting Synch.
They also need to pay for someone to monitor the Red Backs and then the DSLAM to make sure they are working. Also for the Contractors to come out to the house and install the line and equipment.
They are also doing upgrades in many areas, a lot of the phone lines are so old that they haven't been replaced since Al Bell and Dr. Watson put them up. A lot of orange wires are being put into the area where my parents live, and they are being told that DSL is available for their area now. So it costs millions to put in that orange wire to get more neighborhoods DSL ready. They hope it will pay off if they can get a majority of people to buy a package from them for DSL, Wireless Phones, Long Distance, etc for a few years or so.
I am free now, to choose my own destiny.
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Post #47,134
7/26/02 11:57:03 PM
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softswitched with class 5 features
There has only been one true class 5 softswitch sold. A 250k sun ft1800 with markup 1.5 mill software from terrabridge 350k plus a hug service agreement but still under the 5mill cost of a "real" class 5 switch. The offering is not being sold anymore, no takers only clecs and the last one 2nd Century communications nose dived. I know i was the lead cs engineer on the product. Many of the other switches being sold are departmental, the ones that claim to replace telco switches dont even com close to what we had.
dge routing is the future, Unisphere 7500's are the future, cisco if they dont catch up will be left in the dust. edback cisco solution max out the ports and buy another redback/cisco. A unisphere means installing another "virtual" router shareing the same hardware.
thanx,
bill
."Once, in the wilds of Afghanistan, I had to subsist on food and water for several weeks." W.C. Fields
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Post #47,184
7/27/02 12:12:05 PM
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How many companies need a Class 5 phone switch?
Maybe CLEC's or RBOC's, but certainly not small-mid sized companies.
Another problem I think occurred in the telco industry is that with competition, all companies acted as if they were going to be taking over the service of RBOC's. In the end, they didn't. The market size didn't grow that much, and basically all the new companies were just competing for the same customers (and buying redundant equipment ).
I'm in a small 60-person company. We have a 100 port phone switch we bought from AT&T (before it was Lucent). We are growing and need a new phone switch, but the vendors visiting us are quoting $50,000 for the (switch, handsets, wiring, voicemail setup, phone display configuration, long distance tracking codes, etc. etc.) whole package. My boss wants to pay $10K or less. We need to probably buy to expand us to about 300-500 phone capacity, but we're only going to be using 120-150 ports now. I think we actually have about 20 real incoming lines. The rest is done through the "magic" of multiplexing.
What I wondered is why some smaller telco manufacturers don't make S100 or PCI cards for Sun or NT boxes which connect to a phone patch panel, then provide the service through a "standard" server like a Sun e250 or e450. If you have a big company (1000 phones), then you purchase a 3500 or 4500, or maybe even an e10K. The software in the system runs voice mail, displays for handsets, etc.
It still seems that business phone service is really a "racket", to sell really cheap equipment very expensively. One of my neighbors installed a phone system about 5 years ago, and it's a 386 Intel Unixware box from AT&T. He is ashamed to even admit it.
Maybe the small furry mammals in the telco industy are making the dinosaurs extinct? I wonder if these small furry mammals have stock?
Glen Austin
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Post #47,195
7/27/02 2:33:36 PM
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This reminds me of a book I need to post in Reviews...
because it is excellent.
The book is [link|http://www.amazon.com/exec/obidos/ASIN/0066620694/002-5025397-1904017|The Innovator's Dilemma] by Clayton Christensen. The thesis is that there are two basic kinds of innovations. The first is a sustaining innovation, by which he means an innovation which makes a product better at what it already does. He calls this sustaining because existing companies have no problem understanding the value of the innovation and reacting appropriately, no matter how drastically they have to redesign their businesses to do it. The other is a disruptive innovation, and that means an innovation that makes a product which is unable to meet the minimum needs of the existing market but which can be expected to do so in good time. He named them that because they tend to destory existing dominant companies and replace them with new ones.
The reasons why disruptive innovations - even ones where the CEOs of existing companies recognize the risk, consistently destroy companies are complex and fundamental to how businesses work. I would say more about it but the book costs under $10, and I think it is better to read it than listen to a bad summary from me.
Cheers,
Ben
"... I couldn't see how anyone could be educated by this self-propagating system in which people pass exams, teach others to pass exams, but nobody knows anything."
--Richard Feynman
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Post #47,256
7/28/02 9:15:15 AM
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I don't think it's that simple.
I heard the edges of several discussions when I was friendly with a comms technician in a previous job.
1. The PABX we used was physically very impressive: certainly much much bigger than our IBM mainframe. But it was probably the most reliable piece of computing equipment we owned. As far as I could tell, phone problems were almost always configuration issues.
2. We acquired some hardware for doing VR stuff with some NT boxes because the PABX cards were hideously expensive. I don't know how much cheaper the NT cards were but the software was terribly buggy and it took some herculean efforts on both NT and comms techs to get it all working okay-ish. This included several driver and software upgrades.
I'm not surprised about your neighbour's 386, Unixware PABX. I bet it's extremely reliable, isn't it?
Wade.
"Ah. One of the difficult questions."
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Post #47,263
7/28/02 10:05:48 AM
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It *IS* that simple
I already gave a book recommend for The Innovator's Dilemma.
Read it.
There is an inherent pressure on companies to move upscale, and overdeliver what their market needs. There is little doubt that they are delivering a better product for the extra money, but when you get ahead of your customers, you are vulnerable to customers going elsewhere.
However there is also an inherent myopia towards losing these customers because the customers that you are losing are always the ones who were the least profitable to work with. You could only sell them your most basic product line (because they didn't need more), and besides which that line has come under pricing pressure from really poor-quality toy solutions that don't work in the real world. Why just think of ____ (our best customer) trying to get their job done with that crap!
And there lies the trouble. The unreliable piece of shit will someday be reliable enough for most people's needs. Including your star customer. As long as it improves faster than your customer's wants do, you are progressing very nicely along an evolutionary dead-end. And you will get there by always listening to and trying to respond to your best customers.
Cheers,
Ben
"... I couldn't see how anyone could be educated by this self-propagating system in which people pass exams, teach others to pass exams, but nobody knows anything."
--Richard Feynman
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Post #47,279
7/28/02 4:19:16 PM
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Peter Principle in hardware?
Develop to your level of incompetence: build beyond need.
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Post #47,280
7/28/02 4:20:52 PM
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LRPD: Who are you, who are so wise in the ways of science?:\ufffd
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Post #47,285
7/28/02 5:22:57 PM
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Unstated assumptions.
But doesn't that assume that the needs of your customers will not change?
The simple fact is that, eventually, all technology will become a commodity.
If the company is not busy ACTIVELY reducing the price of their current offering, then they will be eaten by the company that is ACTIVELY improving the stability of their product.
Product A starts off with a high price point and high reliability/functionality.
-vs-
Product B with a low price point and low reliability/functionality.
If the manufacturer of A wants to stay in business long term, then said manufacturer needs to:
#1. Add new features that customers cannot live without.
#2. Drop their price point.
#3. Buy out the competition.
#4. Get laws passed to protect their market.
The manufacturer of B has the same #3 and #4, but varies on #1 & #2.
#1. Add the missing features that product A has.
#2. Accomplish #1, #3 and/or #4 without increasing their unit price.
I have no sympathy for anyone complaining about this. This is what COMPETITION means. Better products for less money.
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Post #47,289
7/28/02 7:01:58 PM
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It is not about complaining
It is about the periodic wiping out of entire industries and most of the companies in them. Even when the CEOs of said companies know damned well what is happening and actively trying to resist.
While I know how prone you are to considering everyone else stupid, there really is something more than simple stupidity going on here. And if you care to read the book in question first, I would be willing to discuss it with you. But not until because I don't see the point until you have read a dozen case histories where firms wound up annihilated by technologies that they knew about, which they tried to proactively address, and the reasons why they couldn't succeed.
But I won't bother until you have actually read it because your oversimplifying tendancy means that you don't currently have a clue WTF I mean by things like, "The value network a company finds itself embedded in defines its abilities and disabilities." Or, "Organizations need to be appropriately sized to their opportunities." (Both principles being critical for why CEOs who know damned well what they need their companies to do still don't succeed.)
Cheers,
Ben
PS Your items 1 and 2 for the established companies are sheer suicide. I know that they seem reasonable, but if you understand the dynamics at work, that is how you cut your throat. A hint. People who you can actually find new needs to satisfy are not the customers you are about to lose, and adding features raises costs so that you have not a hope of competing on price. (However every time you do that you manage to increase revenues and look like a genius, right until your company self-destructs.)
"... I couldn't see how anyone could be educated by this self-propagating system in which people pass exams, teach others to pass exams, but nobody knows anything."
--Richard Feynman
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Post #47,290
7/28/02 7:38:20 PM
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Understand that nothing goes on forever.
It is about the periodic wiping out of entire industries and most of the companies in them. Nothing lasts forever. Old industries are replaced by new industries. But not until because I don't see the point until you have read a dozen case histories where firms wound up annihilated by technologies that they knew about, which they tried to proactively address, and the reasons why they couldn't succeed. Look around. We have real world examples happening right now. Again, technology tends toward commoditization (if that is a word). The market you have today, will not be around forever. Understand the cycle. I should have put "or" between those numbers. They do not depend upon each other. I'll read the book. When the library gets it. I've read way too many books on business cycles and disruptive technologies and commodities and TQA and six sigma and so forth. To put it in simple terms, nothing lives forever. One day, your product or company or market or industry will die and/or be replaced by the new product or company or market or industry. What's the best you can do with your product and company in your market / industry before one or more of them die? And do you have an exit strategy? Now, I'll see how (or if) my views change after reading that book.
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Post #47,291
7/28/02 8:03:10 PM
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Of course we have real-world examples
Lots of them. Two examples that come to mind are Sun and Microsoft.
That is why I found the book interesting. Because it helped me understand something that I had seen, had seen commented on, but which I hadn't understood. Which is why well-funded companies run by intelligent people who undoubtable see how it is all bound to end are consistently unable to avoid becoming roadkill.
Cheers,
Ben
"... I couldn't see how anyone could be educated by this self-propagating system in which people pass exams, teach others to pass exams, but nobody knows anything."
--Richard Feynman
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Post #47,300
7/29/02 1:27:44 AM
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How many weight lifters win the 100m dash?
They see it. They understand the impact.
But they are designed and optimized for one specific approach.
Theoretically, there will be an inflection point.
If they could see that...
-and-
CORRECTLY predict the new market
-and-
CORRECTLY re-structure their company
-then-
They could succeed in the new market.
The problem is that while it is possible to see the change coming, it is very difficult to predict what the new market will be like.
Real world example: MS vs Linux. The changes (there are a few) are already hitting us. We know that the old approach will no longer be viable (for a number of reasons) in the new market.
But no one (except IBM?) has been able to put together a company that can exploit the new market (translation: turn a reliable profit).
Once the changes have swept over us and the old approach is dead, many new approaches will be tried (and many will fail).
Eventually, someone will formulate an approach and a structure that will extract a reliable profit from the new market.
In hindsight, this will be "obvious". :)
But, during the change, people are still trained to think in the old modes. They still see things as they were BEFORE the change. They are trying to fit the NEW model to their OLD model and they're getting confused by the bits that don't fit.
:)
Explaining it is simple.
Being able to exploit it or giving advice on how to exploit it is hard.
:)
Again, MS vs Linux. I think the new model will REQUIRE Internet access to centralized databases but de-centralized distribution points. You won't pay for the software, but you'll pay for the service to keep updated. Nickel and dime them. Internet access is the key. Without that, you don't need to stay current. But everyone will be connected because other things they do will require it. So everyone will need to stay current. Give away the shaver and sell the blades. Cheaply. So cheaply that people won't even blink when charged.
Compare that to the current system of selling the original package for hundreds or thousands of dollars and then planning to do the same in a few years (upgrades).
And that's why they're road kill. That big of a change simply does not happen in companies.
MS is attempting it, though. Bill Gates is a marketing genius (despite his other flaws). But they will fail. The new approach does not generate the revenues that the old approach did. Not yet. Maybe not ever.
Thought exercise. Suppose MS, on Monday, announced that all versions of Windows would be $10 (per mac address). And for that price, you'd get 1 year of free updates. You could install whatever version of Windows you wanted and have the latest security patches. For another $10 (per mac address), you could install whatever version of MSOffice you wanted (and have free updates for a year). Of course, the file formats would change once a year. And MS would even sell you a caching server if you wanted one.
What would that do to their company short term and long term?
And that is what it means to be able to see the inflection point and to be able to predict the future market and how to exploit it.
Road kill happens because the weight lifter cannot become a runner over night.
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Post #47,415
7/29/02 9:37:48 PM
7/30/02 6:34:59 AM
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Do you ever stop thinking that you have all of the answers?
Please take this as it is meant. The biggest barrier for anyone in learning anything new is unlearning what they think they know. Particularly when they do have a partial picture that is somewhat accurate in so far as it goes. That is a tendency that I have had to fight, and one that I strongly see you as having.
Your comment about not being able to restructure on a dime is accurate. Your two CORRECTLYs are accurately judged nearly impossible, and attested to by a trail of corpses. (The one success he identified resulted in the burnout of the CEO who succeeded, and a large fraction of the company along with him. The company did, however, survive a transition that killecd.)
Therefore it sucks to be the established company, no hope. Right?
However despite the impossibility of getting your CORRECTLY right, there is a strategy which has worked for several companies and seems likely to be able to continue to work. And it isn't even hard advice to give. Proof: after analysis of what various CEOs have tried, what hasn't worked, and what has, he gives the necessary advice and spends a sample chapter on how automobile companies should address the challenge of electric cars. (At current rates of technological progress they will become an issue around 2030, give or take a decade.)
Cheers,
Ben
"... I couldn't see how anyone could be educated by this self-propagating system in which people pass exams, teach others to pass exams, but nobody knows anything."
--Richard Feynman
Edited by ben_tilly
July 30, 2002, 06:34:59 AM EDT
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Post #47,428
7/29/02 11:46:48 PM
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Uh... Do *you*?!?
'Coz, really, Ben... If there's *anyone*[*] here who can challenge Brandi in the "thinking you have all the answers" department, I'd have thought it was you.
Allow me to quote you, "Please take this as it is meant"... Just drop the 'had' from your "tendancy[sic] that I have had to fight", and you'll be absolutely right, AFAICS[**].
Christian R. Conrad
Microsoft is a true reflection of Bill Gates' personality - the sleaziest, most unethical, ugliest little rat's ass the world has seen unto this time. -- [link|http://z.iwethey.org/forums/render/content/show?contentid=42971|Andrew Grygus]
[*]: Besides *me*, of course! :-)
[**]: If you come up with any good methods to do that, mail 'em to me!
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Post #47,444
7/30/02 7:25:53 AM
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Yes
I may know a bit about a lot of things, but I have also learned to be very fast about saying up front when I don't know about something.
Ironically people seem to forget when I say that. But they don't forget if they later see me mention something that I learned from the exchange. And they misinterpret the many times that I say that to myself, respond with a Google search, and then suggest a few relevant links that I found.
So..even the technique that I have found best for handling a "know it all" tendancy (which, as I said to Brandi, is one that I have to fight) doesn't do very well at fighting the appearance of being a know-it-all!
Cheers,
Ben
"... I couldn't see how anyone could be educated by this self-propagating system in which people pass exams, teach others to pass exams, but nobody knows anything."
--Richard Feynman
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Post #47,481
7/30/02 1:35:19 PM
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Hmmyeah... Could be I forgot; sorry.
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Post #47,495
7/30/02 2:23:56 PM
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There's a Somerset Maugham story..
First - yes I recall your prefacing certain comments as above; perhaps we each should boilerplate that before Any political, religious ... er Any? comment about other than ~
"F=MA is both accurate and adequate, sub-relativistic."
Mr. Knowall, the story - was rendered also in a film ('40s? '50s) called Quartet IIRC. (There was a Trio too)
Scenario: a luxury liner, usual assortment of toffs engaged at dinner in witty upperclass Brit-speak - amusing and one-upping each other (though hardly at an Oscar W level). Title character happens to be a ..not so much 'jeweler' as gem expert. A rather brash one.
When his specialty is mentioned, he's asked some questions and then someone looks for examples - it's been questioned whether he's Really that good at ferreting out 'fakes'.
Attention turns to a Lady at the table, wearing a necklace. Mr. K. turns his gaze to her. At a distance of a few people, he pronounces them 'genuine'.. but as he approaches she demurs about the inspection with some weak reason. Yet all & sundry press for the 'example'.
As Mr. Knowall approaches ['we' see..] a flash of stark [horror?] cross her face.
Mr. K examines carefully the necklace ... [We see both their faces but we can not be sure what each is seeing of the other.]
Mr. Knowall then admits, "no I was mistaken - it's a very good imitation, indeed!"
In fact.. it was a present from the Lady's lover; naturally she dare not reveal its considerable value - as a quite genuine set of diamonds - to her husband. (Unclear how 'previous' was this lover, in the story IIRC, nor does that matter)
Ergo.. for all his vanity and brashness - Mr. K. proved both observant and kind. No one would have suspected this quality from his previous behaviour BTW. Maugham was a Genius about homo-saps IMhO.
I've always remembered this story as a polished jewel about precisely when: one must 'lose' an argument or forget one's expertise - where humans are involved. (Not that I always remember to Remember it, of course; being at least partially homo-sap also ;)
Ashton
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Post #47,420
7/29/02 10:42:23 PM
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A better example might be Polaroid.
They had unique technology. They were the world leaders in their field (instant photography). They were able to protect their lead in the face of competition from a larger rival (Kodak).
But technology changed around them. They certainly could see it coming, and they knew their traditional rival and many big semiconductor electronics companies were investing in it.
But they failed to change in the face of the steady development of large, inexpensive, CCD imagers.
They also had quality control problems that annoyed the customers of their oscilloscope and microscope cameras (e.g. it was rare to get a box of Type 53 B&W film that had 10 good exposures). And at $1+ an exposure, their customers were pushed to investigate other options.
MS is able to change on a dime compared to companies that sell real things with an established technology base. MS's monopoly tax allows them to invest in dozens of alternative futures, something that most companies can't.
I wouldn't count on MS failing. And even if they do in their software stuff, they'll be around in some form or other, taxing the industry as much as they possibly can. E.g. they're doing their best to gain complete control over the hardware specifications.
My $0.02.
Cheers,
Scott.
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Post #47,422
7/29/02 10:57:46 PM
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The chapter was written in the late 90's
Therefore the subject of electric cars was on a lot of people's minds because of California.
It just happened to work for him because electric cars show the basic ingredients of a disruptive technology. There is no way in hell that they meet the minimum needs for a car today. Yet projected rates of technological development make it clear that they will do so, and not that far from now.
GM wiped out by someone currently manufacturing electric golf carts or dune buggies? Don't laugh. It could happen. Hell, Honda did it to the traditional motorcycle makers after establishing themselves with dirt bikes (though Harley did manage to survive in a high-end niche).
Cheers,
Ben
"... I couldn't see how anyone could be educated by this self-propagating system in which people pass exams, teach others to pass exams, but nobody knows anything."
--Richard Feynman
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Post #47,652
7/31/02 4:49:46 PM
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Re: Of course we have real-world examples
Strange, the same scenario often precedes wars, which never simply "happen", but occur after a long buildup of destructive pressure. The bright people see them coming yet are somehow powerless to stop them.
-drl
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Post #47,305
7/29/02 8:44:18 AM
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Siemens HiPath
does what you need, does voip,did,ivr, all of the above and more, but it is pricy. With decent handesets for the office at $400 per handset your bosses 10k isnt going to be met by buying new.
thanx,
bill
."Once, in the wilds of Afghanistan, I had to subsist on food and water for several weeks." W.C. Fields
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