Tick, Tock, Core, Edge

My earliest memories involve an Atlantic beach, big waves and Business Week. Way before I went off to school, I recall going to with my mother to the beach every day in the summer. I would play in the sand; she would read Business Week. Earlier in her life, my mother was at Mt. Holyoke College, where she studied politics and economics. Later in her life, my mother was at Second Beach on Aquidneck Island, where she studied politics and economics. Even way back then, she would drop her magazine, look over her sunglasses at me and say something like “Remember, Tom – it’s a pendulum. Things move left, then right, and back again. Fashion, economics, tides… it’s how stuff happens. Left is good, right is good, the movement between them is not only good, but necessary.” This theme stayed with her for her whole adult life. Picking stocks was a matter of pendulums (but, remember Tom, bet on five and ten year swings. Shorter swings are just too hard to time; don’t try), picking girlfriends was just a matter of pendulums too (Yes, she’s really smart, but there will come a time when something else will be important. Lots of relationships fail when life swings from the romance of dating to drudgery of getting the kids ready for school.) My mother’s pendulum theory seeped into how I fundamentally see the world.

Alec posted today about Google acquiring GIPS, and I see that pendulum in motion. For me, I see GIPs as being the quintessential edge company. If we didn’t have networks with edges (and more accurately, networks with narrow edges), GIPS wouldn’t be around. Google and Skype have an edge-centric world view. Incumbents, such as Verizon and BT, have a core-centric world view. GIPS is an important arrow in Google quiver, not only because it corners Skype into a media technology corner, but because it is an important part of the edge landscape. When added to other edge focused initiatives by Google, specifically the Android handset and Google Voice, it’s clear that the next generation battle-lines are drawn. Google is going over the top, betting hard on voice and handsets. Skype is controlling the browser, and betting hard on enhanced media like video. GIPS is a two-fer in a way; Google weakens Skype’s strategic control on enhanced media, while at the same time providing better voice experiences for its edge offering. That said, I’m not that worried about what Skype is up against. Skype has 450 million user accounts. That’s a lot of people.

More important, though, is what these battle lines say about the other players. Which is to say, these guys aren’t even on the battlefield. If fellow Cape Codder David Isenberg is right, and we are in the era of the dumb network, then anyone not-Skype and not-Google is not in the running. Although I agree, appreciate and applaud Orange’s work with their core (in particular, the API program), where are they in this battle? Where is AT&T? Now, doesn’t Verizon’s deal with Skype seem much smarter? To me, it does.

Tick, Tock goes the pendulum. Our industry continues to move from the core to the edge. Subscribers flow from AT&T to Skype, and voice control flows away from big class V switches to browsers everywhere. Tick, tock.

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