SaaS and net neutrality
May 31, 2006
A footnote to my last post: I came across the McKinsey article through a mention of it in a post by James DeLong. DeLong raised some interesting questions that I hadn't seen raised before: "What would net neutrality regulation do to [the adoption of SaaS]? Would it not matter? Or would it undermine the [quality of service] that utility computing or SAS models require?" Those do seem like important questions. Anybody know the answers?
I haven't thought about it in the light of Saas models, but I think QOS will help build differentiation.
Posted by: Kingsley Joseph at June 3, 2006 11:33 PM
Net Neutrality (or lack of it) will not impact SaaS because of the following reasons:
- If Net Neutrality law weren't passed, and major SaaS vendors pay to prioritize delivery of their bits, customers will continue to experience the degradation in their service due to additional internet traffic (it is like everyone in California having hybrid vehicle and choking carpool lane)
- If Net Neutrality law is passed, QoS can be addressed by customers having a fatter connection to internet through their ISP, vendors having a bigger pipe to internet, or vendors even hosting their services locally at customer premises, but doing remote management/maintenance (IBM has been practicing a varient, hardware-as-service, by putting self-health monitoring in hardware, and having it notify IBM support for maintenance if it detects a failure). The last approach does not give software vendors economies of scale due to sharing of physical resources but it definitely provides other economies of scale.
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