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standing of what makes the customer tick. There is one additional characteristic that must be addressed: While the service provider or system manufacturer may be in a position to define the characteristics of the lower seven layers, only the customer can define value. A vendor who understands this sublime fact will have a significant advantage over those who do not. In the days when bandwidth held sway and was a tremendous money generator, the lower layers represented a cash cow ripe for milking. Today, however, with the perceived glut of bandwidth that is available, the price of bandwidth has plummeted to near zero a frightening reality for those companies that have traditionally made their fortunes through the sale of bits-per-second. Today, the big money lies at the top of the stack, closer to the customer, a place where unique, specially designed network products can be positioned on a customer-by-customer basis. The traditional service providers the LECs, cable companies, and IXCs are scrambling to establish a toehold that will allow them to climb the stack, to move out of the primordial network ooze into the lofty heights of content and services. Of course, the ILECs and cable MSOs are in an enviable position: They touch the customers with their networks, and whoever is closest to the customers has the greatest influence over them and the infrastructure deployment decisions they are likely to make. The combination of network provisioning and content is unbeatable, and is fast becoming a major focus for converged providers. The ability to provision an end-to-end network as well as deliver application content is a powerful combination. Thus, the service providers interest in moving up the food chain is a valid one. So what does all this mean It means that the winners in this game to acquire and keep customers will be those companies that understand the importance of providing highly targeted value based upon a discrete understanding of the drivers behind every customer. Technology, expressed as features, functions, benefits, and so on, is still critically important. However, the people who care about that level of technical detail are not generally the people who make buying decisions or write checks for product purchases. Value takes on many different forms and must be expressed appropriately to each audience. Technology bells and whistles certainly matter I would never suggest otherwise but there is much more to the capability equation. The characteristics that represent value to a technician responsible for installing, operating, and maintaining a network are different than those that provide value to a network designer, a beneficiary of the services that the network delivers, or the end user who must make a buying decision about a highly capital-intensive
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Downloaded from Digital Engineering Library @ McGraw-Hill (www.digitalengineeringlibrary.com) Copyright 2004 The McGraw-Hill Companies. All rights reserved. Any use is subject to the Terms of Use as given at the website.
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In this chapter we explored the nature of the telecom industry: Who are the players, what are their roles, and perhaps most important, what is the future that awaits them In the final chapter, we delve into the past before we examine the future, looking at the now infamous telecom bubble.
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1. 2. 3. 4. 5. 6. 7. 8. 9. 10. For each of the major industry sectors, list at least three players. What advantages do CLECs have over ILECs Use the Web to research Section 271 Relief. Is it successful Why is the metro sector such an important market What are the biggest challenges facing the ILECs Should the industry just get it over with and revest itself What are the biggest challenges facing the cable sector Why were the component manufacturers least affected by the burst bubble What lessons do we learn about the component industry by studying the steel industry What is softswitch and why is it important
Downloaded from Digital Engineering Library @ McGraw-Hill (www.digitalengineeringlibrary.com) Copyright 2004 The McGraw-Hill Companies. All rights reserved. Any use is subject to the Terms of Use as given at the website.
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