TheInquirer.net has an interesting article (which I found, btw, on Memeorandum's tech news site) about the new NetSpective® 2.0 Enterprise Filtering Technology which Verso launched last week. It claims to be able to allow telcos to block VOIP services, so they can stop Skype et al from gobbling up their voice revenues.
"Hey - we don't need to innovate! We can just prevent you from using our pipes and then continue to sit on our fat asses while we rape and pillage the marketplace a little longer."
This kind of competitive response kind of reminds me of a rant that total freaking legend Phil Torrone made back in the glory days of the Engadget podcast. I remember him bemoaning the American capitalist system which, once upon a time, would out-innovate the competition, but is now content to prevent innovation, using their wealth to buy favourable outcomes in court, or in Congress, or by preventing access to their assets.
Of course, they are well within their rights to do so, but history suggests that it's a self-defeating strategy. You can rarely stop innovation when faced with a genuine demand from the marketplace for the new product or service. You might be able to slow it down some, but the energy you spend slowing it down to protect your existing cash cow is energy you should be spending innovating yourself, even if it means cannibalizing your existing profits in the short term. Of course, the sharemarket won't like it, but as CEO your job should be (in a perfect world) to ensure to long-term success of the business, not just stalling the inevitable until your options vest.
This kind of short-term thinking is what is going to kill the record labels, Hollywood, and many MSM businesses. It's also what's going to kill telcos. I recall our G'DAY WORLD interview with Amy Wohl a couple of months ago. She had just attended a telco industry conference and, when I asked her what their strategy for responding to VOIP was, she basically said "they don't have one".
I guess that's why Verso think they've got themselves a hot product, but I suspect any attempt to prevent these companies doing business will see a round of court cases that could go on forever. A quick injunction to stop the telco installing the Verso product, pending the outcome of a trial, and it's business as usual.
I'm pretty sure Meg Whitman has her legal team preparing the injunction as we speak.
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