Chris Kranky

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Got milk? Why you need to be all over WebRTC

Chris KoehnckeChris Koehncke

milkmanAs I travel the world, I meet with service provider (aka telephone company) executives who seem to all like to ask me the same question, “what is the business model for WebRTC?”  My answer is usually pretty simple – got milk?

When I was a little boy, the milk man delivered dairy products twice a week to our doorstep. It’s nostalgic. The night before we’d complete a little form with all the items we wanted and leave it with the empties on the doorstep (early e-commerce). It was a business, we got milk.

My mother started shopping at the new A&P and they had a refrigerated section with dairy products (including milk) and behold – the milk was actually cheaper at the store. Our milkman didn’t like this, he professed that he was offering a valuable service and that his millk was somehow better, fresher than that “store bought” stuff. It was a futile effort as we all know. The milkman moo’ed.

Do grocery stores make a lot of money on milk? No. Bulk milk is the lowest margin item in a grocery store (about 15% GM – barely covers the overhead and periodically is a money loser). But what if you turned up to a grocery store and alas they said they no longer sold milk. Can you imagine the public reaction to a Safeway saying they would no longer sell milk? Well they wouldn’t be a grocery store.

So milk or voice is a must have component for any telecom provider. Unfortunately, they’re trying to hold on to the notion of the milkman. It’s a futile effort. WebRTC is a diary product, easily capable of bulk milk delivery but the real opportunity is in yogurt, cottage cheese and smoothie drinks – namely adding additional value through product derivations with resulting higher gross margins. WebRTC enables you to build whatever communications solution you want at a much lower cost than the current milkman is capable.

What I find most incredulous is when I speak about WebRTC telecom executives act like I’ve shown up to steal their baby in the night. But that baby is 100 years old now and what I’ve really shown up at the door with is the ultimate gift – the gift of opportunity.