Worth a Read: Innovation and Investment in IP Interconnection (PDF)

1. Decentralization of the Internet: the emergence of national and regional Internet Exchanges facilitates private peering
arrangements by increasing number of ISPs’ access networks edges in one central location.
2. Commoditization of IP Interconnect prices (falling IP transit, CDN or router costs) led to substitutability of IP Interconnection
products and countervailing powers in the IP Interconnection value chain.
3. Proliferation of Content Delivery Networks: Content & Application Providers leverage the increased value of their Internet
content by building proprietary caching server parks or, alternatively, using independent, commercial CDN services that are
located close to the ISPs’ access networks.
Still, the majority of Internet traffic is progressively being concentrated to a limited number of large Content & Application Providers
and a few wholesale carriers. In 2013, 35 networks carried 50% of all Internet traffic in North America, down from 150 networks in
2009. The concentration of IP traffic is a major evolution in the IP Interconnection value chain, and has the potential to influence the
negotiating power among connectivity stakeholders and affect the current equilibrium in the Internet ecosystem.

Worth a Read: What Really Happened with Vista

I do not claim to have had unique insight during this period. I was frustrated by the focus on these managed code layers and their uselessness for most Office scenarios but I could not articulate the strategic issues clearly. In fact, the OS innovations in iOS were what made it so clear in retrospect how wrong-headed the overall world view driving this work was.

Worth a Read: There Is No Free Market for Electricity

Understanding the sector is not just important because electricity is important; the market for electricity is really a window into the workings of the modern administrative state. The economic regulation of the sector often blurs the line between government and business, turning each into the other’s client. Even in places where competitive features exist, the marketplace is still designed by government and warped by subsidies. Today there is no genuinely free market for electricity.

Worth a Read: Google Is as Close to a Natural Monopoly as the Bell System Was in 1956

Now we’re just in a situation where the amount of capital that would be needed to start a new Google competitor would be so huge or so onerous in terms of competition that it would be very hard to raise that capital. So we’re just dealing with the fact that it’s a de-facto monopoly. Even Microsoft couldn’t get past a 5 percent global market share.

Buying Systems, Not Products

IT & Corporate Future

As the computer revolution progresses company’s are less dependent on the quality of their personal and more dependent on the quality of their systems. As we move toward automating information workers, this will become more apparent. Companies won’t be nearly as dependent on people doing mistake free, thoughtful work. A bank won’t make a bad loan because a loan officer wasn’t really paying attention and approved a loan they should’ve denied. Instead, the bank will rely on a system to make most decisions, if the system isn’t very good the company won’t be very competitive.

When we deal with a company we are not really dealing with a group of people and a product, but an IT system. Buying products and services also means you are buying an IT service, you just don’t realize it. When you buy something for Amazon you are also buying their entire IT system, from logistics to online storefront. Their value as a retailer is not just in the products they sell, and they don’t have any people that you interact with. The reason we buy from Amazon is because their IT systems are so good at letting us get what we want.

Machine learning and the automation it will create it the natural evolution of this. Automation really began in the Industrial Revolution, when you were buying a product you were also buying into their mechanical system for the production of that product, this sounds pretty Rule 11. Simply put, automation will simply accelerate what we have been seeing for hundreds of years.

Every old idea will be proposed again with a different name and
        a different presentation, regardless of whether it works.