A recent post was a repeat of “Did We Learn Anything?“ This question was the central theme behind Bearonbusiness itself. Jot that down, as it might be important trivia to remember if “Who Wants to Be a Millionaire?” makes a comeback.
Simple Tennessee Country Boy posted the following comment on yesterday’s post:
Did We Learn Anything?” Yes we’re all to blame and yes…some of us did learn something. What we learned–I hope–is to think for ourselves and not get caught up in the hype. Two examples:
1) Remember the “fact” that everyone was stating back in the late 90s/early 2000s: Bandwidth demand is “doubling/tripling/quadrupling every month”…can’t put fiber in the ground fast enough to keep up. Turned out that “fact” was based on faulty statistical data from UUnet. And today the number of on-net devices and bandwidth-hog applications are legions greater than in 2000 and yet less than half the fiber laid remains unlit today.
2) Remember Mr. Crowe’s Level 3 mantra: “We’re going to bring silicon economics to telecommunications?” We all drank that kool-aid for awhile. Then it dawned on a few of us that silicon economics only works when your start-up overhead is a basement or a garage endeavor–HP and Apple come to mind. Silicon economics doesn’t work with a $6B up front investment.
So yes we did learn something…to use some common sense and if it sounds too good to be true…well, you know. And in our heart of hearts, we all knew those days would end. It was too good to be true.
I can’t fuss with many of the statements made by Country Boy. I must confess, though, that I might be sipping on leftover Kool Aid. I believe the basic premise of Silicon Economics is playing out.
The cost of bandwidth has gotten ridiculously less expensive. And it is a good thing that it has. For low cost bandwidth has been the essential fuel of the continued explosion of the Internet. Without exponential decreases in bandwidth pricing, video applications would be a pipe dream. No YouTube. No Telepresence. No massive multi-player online gaming. No Hulu. No MVaaS (Managed Video as a Service). Etc.
Silicon economics might not have sparked the need for extra conduits, but it does drive a thriving market for those who manufacture bandwidth. It inspires companies like Zayo to find innovative ways to drive down the cost of bandwidth so as to spur the growth of bandwidth intensive applications.
Part of the lesson of the great meltdown was that the fundamental theme was correct. The problem was hype and a lack of investor/management discipline caused a bubble.
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