BT vs Google

BT CIO Al-Noor Ramji recently commented that BT saw Google as its biggest competitive threat (CNet).

Analyst Lars Godell of Forrester was quick to dismiss the idea that Google represented an imminent threat to BT. "I think consumers still need to pay for bandwidth. That's the business of a telco, and I don't see Google becoming a full service telco. I don't see Google owning an infrastructure", he told ZDnet.

This seems an odd critique of BT's far-sighted view. BT generates revenues from selling bandwidth to users. Google is already in the business of disintermediating suppliers of paid bandwidth, for example in California (SFgate), and other projects around the world are offering either free wifi as a municipal utility (Daily Tech) or on a paid model. BT, for example, has teamed up with The Cloud in the UK to offer wifi in nine UK cities (Register).

Now, Simon Waldman of the Guardian posted to CommentisFree a couple of months ago on the subject of "Freeconomics", the success of business models that took a once-paid service and gave it away, citing Skype and Loot and Craigslist and TalkTalk's broadband offering. With the exception of governments (who still might) the only people who seem likely to be able to give away wifi to users are the companies that can support that service with ads (or, debatably, some sort of upsell). Google's AdWords are ideal for the purpose - unintrusive, localised, long tail advertising that even at the current level of technology mobile wifi would allow them to target to within about 100 metres in urban areas. Perhaps AdCenter will give Microsoft the same capacity. Yahoo!'s search advertising might offer them the same. But BT has nothing similar, and failing a hypothetical partnership with Yell, Thomson or perhaps Craigslist BT is looking at a future of trying to charge users for its core product while Google gives it away.

Comments

[John Middleton]

Good post, that analyst reflecting the short-termism of the financial markets perhaps? :)
BT do have a longterm vision to become a service provider, entertainment providers to their consumer customers and integrated communications to their corporate custeomers.

[BV]

Big company feels threatened by Google = Big company is a dinosaur with a threatened business model

[PK]

Al-Noor Ramji is a showman and a charlatan. He stuffed BT with cronies who owe their careers to him. Most of the IT development work has been shipped offshore. Soon TCS and Infosys will have a nice neckhold on BT. Worst of all, his methods aren't actually any good. Agile isn't relevant to a corporation whose IT workload is mostly systems integration and process design. Al-Noor Ramji was sacked by Qwest with a job title of Technical Adviser. His top priority has been to make himself unsackable at BT.

Al-Noor's vision is to peddle the nonsense that the world is going faster and faster, and only one man can save us from the dizzying pace of change - Al-Noor Ramji.