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This piece ignores a fundamental distinction between AT&T and Twilio. Twilio doesn't actually move any data from here to there, physically. AT&T will actually
by chronomex 15y ago
This piece ignores a fundamental distinction between AT&T and Twilio.
Twilio doesn't actually move any data from here to there, physically. AT&T will actually pick up your data here and take it over there. They're the ones who've done the work of laying fiber across the country and putting up cell towers so that communications can actually happen. These things cost money and can't happen overnight.
Twilio is a reseller. They may be a really good reseller, but they are reselling service and a decent amount of the money paid for that service still flows to AT&T (and the other carriers).
- nestlequ1k 15y agoIt's about margins. If a business got rid of their land line, and moved all their communications to the cloud (using tools powered by twilio), ATT would capture just a tiny fraction of what they would if they were just billing the business monthly for phone service.
- swombat 15y agoThe cloud still requires a phone line.
- nestlequ1k 15y agoSince when? I haven't had a phone line for 10 years. Yet I'm here.
- druiid 15y agoReally? I'll elucidate. There hasn't been a national copper interconnect (POTS) for a long time now. You might, have copper to the house but after that it's fiber all the way down. AT&T and all the large carriers leverage this to carry your voice traffic as data and on top of that can carry 'internet data' and whatever else. With AT&T goes the data, even if you haven't had a 'phone line' in a long time.
- nestlequ1k 15y agoNo one says ATT doesn't still get some money. But wouldn't you rather be the one sending the final customer a bill for 50/mo? There's a reason wireless companies have been fighting vigorously to avoid becoming dumb pipes.
- thesis 15y agoAre you serious? That's like saying you it's better to own a website, rather then own Amazon EC2 or <insert any datacenter here>.
- nestlequ1k 15y agoYeah, I'm serious. I'd rather own Facebook than the servers it operates on.
- cube13 15y agoWho provides the bandwidth and hardware for the cloud? Hint: It's not twilio. It's companies like AT&T, Level 3, Amazon, MS, etc.
- toomuchtodo 15y agoHe who controls OSI Layer 1 controls the profits.
- chronomex 15y agoHe who controls the bits ... controls the Internet!
- inkaudio 15y agoSimilar to my thoughts. Twilio will not kill AT&T, the startup that will compete with AT&T will be that startup that can provide competitive hardware to carry data. And I think it may be in the form of quality and reliable nationwide wi-fi. Clearwire is trying but this is a difficult task.
- cube13 15y agoEven then, AT&T is a Tier 1 internet backbone provider, giving them a substantial advantage in bandwidth costs compared to any startup.
- chronomex 15y agoAre you referring to equipment manufacturers or data communications carriers? There are successful equipment manufacturers; my favorite is Ubiquiti Networks. They're competing (directly) with Cisco's wifi business. Cisco's carrier-switch side is, in turn, competing with Alcatel-Lucent, the traditional supplier to AT&T. As for carriers, the important pieces to the equation are bandwidth, distance, and coverage. In the United States you need all three, because we have a lot of people spread out over a lot of space. There are 400 million people in this country. Traditionally each of them is connected to a telephone central office, where the equipment lives. You see all these little dots? http://en.wikipedia.org/wiki/File:Central_Office_Locations.png http://en.wikipedia.org/wiki/File:Central_Office_Locations.p... Each one of those is a building with at least a few hundred (and sometimes up to a hundred thousand) subscribers connected to it. Each building is a data center of sorts, sitting on land that had to be bought, containing equipment that needs maintenance occasionally, and getting power bills that need to be paid on time. Many of these dots, particularly the isolated ones, are served by only one carrier, AT&T, who then leases out bandwidth to their competitors because the federal government requires them to do so as a condition of the antitrust settlement in 1984. Universal service means you're connecting every last one of these dots to each other dot, and with sufficient bandwidth to make that work. Wifi doesn't have that kind of bandwidth, and it's not efficient anyway. The best way we currently have to do this work is optical fiber, strung between poles or plowed into the ground. I'm not saying it shouldn't be done. I'm just saying that any "startup" who goes at it will need to be well funded.