See our new 20-page report – Digital Dynamism: Competition in the Internet Ecosystem:
The Internet is altering the communications landscape even faster than most imagined.
Data, apps, and content are delivered by a growing and diverse set of firms and platforms, interconnected in ever more complex ways. The new network, content, and service providers increasingly build their varied businesses on a common foundation — the universal Internet Protocol (IP). We thus witness an interesting phenomenon — the divergence of providers, platforms, services, content, and apps, and the convergence on IP.
The dynamism of the Internet ecosystem is its chief virtue. Infrastructure, services, and content are produced by an ever wider array of firms and platforms in overlapping and constantly shifting markets.
The simple, integrated telephone network, segregated entertainment networks, and early tiered Internet still exist, but have now been eclipsed by a far larger, more powerful phenomenon. A new, horizontal, hypercon- nected ecosystem has emerged. It is characterized by large investments, rapid innovation, and extreme product differentiation.
- Consumers now enjoy at least five distinct, competing modes of broadband connectivity — cable modem, DSL, fiber optic, wireless broadband, and satellite — from at least five types of firms. Widespread wireless Wi- Fi nodes then extend these broadband connections.
- Firms like Google, Microsoft, Amazon, Apple, Facebook, and Netflix are now major Internet infrastructure providers in the form of massive data centers, fiber networks, content delivery systems, cloud computing clusters, ecommerce and entertainment hubs, network protocols and software, and, in Google’s case, fiber optic access net- works. Some also build network devices and operating systems. Each competes to be the hub — or at least a hub — of the consumer’s digital life. So large are these new players that up to 80 percent of network traffic now bypasses the traditional public Internet backbone.
- Billions of diverse consumer and enterprise devices plug into these networks, from PCs and laptops to smartphones and tablets, from game consoles and flat panel displays to automobiles, web cams, medical devices, and untold sensors and industrial machines.
The communications playing field is continually shifting. Cable disrupted telecom through broadband cable modem services. Mobile is a massively successful business, yet it is cannibalizing wireline services, with further disruptions from Skype and other IP communications apps. Mobile service providers used to control the handset market, but today handsets are mobile computers that wield their own substantial power with consumers. While the old networks typically delivered a single service — voice, video, or data — today’s broadband networks deliver multiple services, with the “Cloud” offering endless possibilities.
Also view the accompanying graphic, showing the progression of network innovation over time: Hyperconnected: The New Network Map.