I don't often get hot under the collar about executive chair-swapping. Tell me that "Fred's left so-and-so's optics division to head up so-and-someone-else's routing division," and I'm unlikely to offer up much by way of fevered speculation.
For one thing, I might not know Fred. Even if I do, I know that the "Nice Fred" persona he projects to me could be totally at odds with "Fred the Terrible" who presents himself behind closed company doors. Sure, he may have this or that reputation; but he may not want or need to go by the same playbook at his new company. Maybe Fred's new team or his new bosses will hate him. Hell, maybe his wife is just about to leave him, and he hasn't seen it coming. There are so many variables, who knows?
In short, "Let's see," tends to be my take on most personnel scuttlebutt.
For once, though, I think I've spotted an executive move that really is significant beyond any reasonable doubt. At the end of last month, Google Fiber's Founder and General Manager, Kevin Lo, announced in a blog post that he is upping sticks to join Facebook as Director of Infrastructure Connectivity and Investments.
Why does this matter? Is Mr. Lo (who I've never met, by the way) great at the big picture, but not so good on the details? Does he live by Six Sigma or loathe it? Is he the missing piece of the jigsaw that will ensure the success of Facebook's new Open Compute Project (OCP) Telco Project and Telecom Infrastructure Project (TIP)? Or does one of his personal failings mean that he's bound to preside over a slow-motion trainwreck?
Frankly, I haven't the faintest idea. For me, Lo's move to Facebook matters for reasons extending far beyond his own strengths and weaknesses (whatever they might be). To me, it looks highly symbolic of a wider industry shift taking place in the relationships between what I call the web-scale Internet companies (WICs), such as Google and Facebook, and the communications service providers (CSPs).
In the last ten years, we have essentially seen this relationship evolve in three phases. Phase 1 consisted of the CSPs complaining about how the unregulated "over the top" (OTT) providers were cream-skimming and reducing them to mere bit pipes.
Over the last couple of years, a Phase 2 has emerged in which a lot of that early hostility has died down. CSPs have somehow reluctantly acknowledged that without the WICs, users wouldn't be consuming their services on anything like the same scale. And (whisper it) CSPs have acknowledged that, frankly, there's a lot -- actually an almost embarrassing amount -- that they can gain from leveraging the WICs' business and technology practices, not to mention some of their technology assets.
Phase 2 thinking is becoming increasingly well entrenched in the CSP community now, although Phase 1 sentiment is still alive and kicking. (Ask Verizon or Time Warner Cable how much they appreciate having to compete with Mr. Lo's former love, Google Fiber, for example.)
In my view, a new Phase 3 is emerging that will be characterized by much closer collaboration between the WICs and the CSPs. And that's why Kevin Lo's crossing the network infrastructure Rubicon from Mountain View to Menlo Park is so symbolic.
"I'm thrilled about the opportunity to work with like-minded colleagues in leveraging Facebook's open and collaborative approach to innovation" wrote Lo in his blog. Read that again; it's right there. With the OCP Telco Project and the TIP, Facebook is reaching out to the CSP community through a far more collaborative, partnership-based model than anything that could have been brought to market two or three years ago.
It's not just Facebook that's going down this road of partnering with the CSPs, either. Another important deal concluded in recent months is the February 2016 announcement that Amazon Web Services (AWS), Ericsson and Telstra are partnering to form a new joint cloud innovation center. A couple of years ago, CSPs were too suspicious of the WICs, too different and too determined to remain different to want such a partnership. Come to that, Ericsson wouldn't have known how to bridge the two and participate as a partner, without getting split down the middle, either.
It may take several years, but I suspect this collaborative Phase 3 approach will come to redefine the relationship between the WICs and the CSPs. Facebook and Amazon appear to me to be firmly on this page already. Amazon might be much less openly communicative than Facebook on this, but the truth is that Facebook was no better just a couple of years ago.
Kevin Lo and Facebook, his new employer, are clear not just that they believe in a more collaborative Phase 3, but that they want to lead it. And make no mistake, there are a lot of benefits that can come to Facebook in terms of enhanced business relationships with the CSPs. Many leading CSPs are interested in this more collaborative model. They like it -- a lot. Hence the long list of CSP participants in the Open Compute Project (OCP) Telco Project, as well as a list comprising Telefonica, SK Telecom, EE (now part of BT), MTN, Indosat, Globe and Deutsche Telekom among those that are participating in TIP.
So what perspective will CSPs have on Google -- or Alphabet -- two years from now? I don't expect the folks running Google Fiber or Project Fi to pull their horns in any time soon, or indeed perhaps ever. I don't expect Google's investment momentum in its own new wireless access technologies or new wireless service business models to dry up, either. On the contrary, there's every reason to expect that Google will want to accelerate some or all of that over the medium term, at the very least.
If nothing else, Google's ongoing efforts at competing with the CSPs will ensure that the Phase 1 flame of distrust borne of disruptive competition will continue flickering robustly in some CSP quarters for a long time yet. What may change over time, however, is the way in which Google harnesses these capabilities -- and the business model with which the company brings them to market.
The sight of all those Tier 1 CSPs signing up to partner with Facebook in joint product development is bound to be provoking a lot of thinking in Mountain View. Kevin Lo certainly thought about it -- and came up with a conclusion that will resound well beyond his new workplace.
— Patrick Donegan, Chief Analyst, Heavy Reading