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Pete Baldwin 12/5/2012 | 3:28:58 PM
re: Juniper Spreads Sunshine in Q3 The more that companies talk up the certainty of carriers needing to upgrade bandwidth, the less I believe them.

That's not based on any deep analysis, just superstition... and, oh yeah, the absolutely certain bandwidth-eating tsunami that was supposed to happen circa 2002.

Network upgrades aren't 100% required. The alternative would be a faulty or slow network -- but guess what, we already live with that and generally don't complain. (I'm referring to cell phones.)

Anybody else getting this creeping feeling of doom?
malibu 12/5/2012 | 3:28:57 PM
re: Juniper Spreads Sunshine in Q3 That should depend on the company. If I were Nortel or Alcalu, I would definatley be feeling the doom. But if I were Juniper, Infinera or Starent, I would be feeling bliss at the opportunity that springs from the ashes.
gasman 12/5/2012 | 3:28:52 PM
re: Juniper Spreads Sunshine in Q3 While it may be true that network upgrades aren't a 100% required, but from what I've seen, providers are still spending money and it appears that it's going to stay that way. Capacity on these networks is getting used up hand over fist, we're seeing more and more apps chew up bandwidth. Connectivity to homes and business is getting faster, connectivity to mobile handsets is getting faster, it's driving backend capacity needs. Maybe not as fast as we thought in 2002, but it's definitely growing.
^Eagle^ 12/5/2012 | 3:28:48 PM
re: Juniper Spreads Sunshine in Q3 In other words, what if this correction is not a "normal" albeit a very large correction? What if it is the opening signs of a massive disruption in our global economy and the beginning of a different reality?


^Eagle^ 12/5/2012 | 3:28:48 PM
re: Juniper Spreads Sunshine in Q3 Craig,

I also have a feeling of worry. However, I am conflicted because all the data points say that telco's will keep buying gear. The data says we will all keep using more and more bandwidth and the investments carriers are making are driven by services that people are actually subscribing to. Therefore, the investments are sustainable due to real demand, real profits and real need.

However, I think this only applies as long as the macro economic trend lines continue. If we are going through a "normal" correction (by normal... I know this correction is big, but it could be viewed as correcting the value of assets that are way overpriced)... if we are going through a normal correction, even a big one.. I feel telcom spending and our industry will be OK.

However, the other nagging thing that has me worried: what if the economy gets so bad that we don't actually pay our phone bills and start canceling these advanced services in mass as part of household and business "belt tightening"? If that happens, the carriers have never had any fears about cutting costs... including capex, opex, people... all of the above. My measure is to watch the carriers' quarterly numbers and annual numbers. If we start to see the carriers loosing money... then all bets are off.

paolo.franzoi 12/5/2012 | 3:28:47 PM
re: Juniper Spreads Sunshine in Q3

I think that your example of GM is terrible, but I agree with your thoughts (GM can be fixed completely with one simple move - close all US operations - the rest of the world is profitable for them).

The problem is there is no economic model for shipping more and more bits at a lower and lower $/bps.

materialgirl 12/5/2012 | 3:28:47 PM
re: Juniper Spreads Sunshine in Q3 At the risk of sounding like a total broken record, we surely have cause for concern. Until we all can agree on a NG architecture and FINANCIAL MODEL that works with being dumb bit pipes with smart end points, investment will dwindle.

As long as we try to live the lie that telcos will supply intelligent bandwidth at high prices, a scenario which has no future, investment will stagnate. Just look at ATT and the iPhone for heavens sake. Look at GM, once the biggest company in America, living for decades under the delusion we would always buy bigger cars, the economy or the environment be damned. Economics always wins. It just sometimes takes time, like decades.
materialgirl 12/5/2012 | 3:28:39 PM
re: Juniper Spreads Sunshine in Q3 Dear Seven:
GM is analogous, in that they were a high cost provider of an unsustainable product that made no provisions for a rather obvious future and failed miserably as a result.

The market economy works!

However, as I have ranted on these posts for EIGHT YEARS NOW, we have no dumb bit pipe economic model, as you noted. Instead of trying various metro or co-op like strategies, just to see what is less horrible than the other in practice, we have played this pretend game. We have now wasted 8 years and billions of dollars chasing a high cost dream of the past. We now are collectively out of cash, sitting on a third world telecom infrastructure that is not going to help us get out of this general mess.

Great going.
cw.774 12/5/2012 | 3:28:38 PM
re: Juniper Spreads Sunshine in Q3 Sailboat mentions the macro-economic aspect that chills me. Telecom won't get a bail-out 'cause Gov't types don't understand it. The left hand doesn't know what the right hand is regulating or why.
I can add to his scenario that I think the complicated bandwidth landscape is ripe for pushing more dumb government control (the Gov't on a roll from the "successful" Treasury roll-over of some big banks). This in combination w/the effects of the re-consolidation of the maj. carriers w/superior lobyists and the nation's pending increase in Taxes (I don't care who gets elected)is what disturbs me.

2002 tsunami was people getting wall street hype sickness. Many great REAL applciations promise to entise us for more BW now. BUT This coming threat is bigger, dumber, slower, heavier...
steady 12/5/2012 | 3:28:36 PM
re: Juniper Spreads Sunshine in Q3 Sailboat,

I would rather believe the world will still run in the old way at least for one or two decades. Your worry is rather political than economical. The reality of global economy is USA spending money while other countries manufacturing, servicing and earning USD. The financial crisis demonstrates this game can't last for ever, nevertheless this game will not stop at once, that is why it wouldn't be that "it is the opening signs of a massive disruption in our global economy".

USA is still unique and not replaceable, even though it makes a mess this time. Chinese earn much USD depending on massive cheap labors, but they can't go further in an easy way. In fact without American's overdraft China can't get so much money. Europeans are more like dudes. I don't think they can lead the world before they are unified.

So USA is still the leader. I think at least American can just print green papers called USD to pass through this tough time. Of course it will hurt USD's reputation very much. But anyway at this time, there isn't massive disruption, due to the absence of comparable competitors.
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