Chris Kranky

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The business case for WebRTC?

Chris KoehnckeChris Koehncke

spreadsheetThe CEO of a technology company sat at the bar and asked, “So Chris what’s the business case for WebRTC?” There is no business case to ever use WebRTC, I replied. Happy, he dug his meaty paw into the bowl of chips and munched on. CEO 1, Kranky 0.

I then asked him what he thought the business case for Verizon FIOS was. He snorted that I was tempting stupid again with that question. Verizon was selling Internet, telephone and video services with FIOS, it was a great business. Sadly, he had his facts wrong.

There is no business case for the deployment of Verizon FIOS. A 6,000 line Excel spreadsheet created by a Verizon Communications business analyst cleared illustrated that there was no way FIOS could ever recoup it’s investment, made no sense marketing wise. The numbers were staggering. An investment of $23 billion would reach only 1/2 of the Verizon foot print ($1,200 for each house passed). For those who actually subscribed to the service, the actual subscriber cost would amount to $2,437. Add in the back office networking equipment and the spend increases to a whopping $3,897 per actual subscriber. No monthly subscription fee would ever recoup this investment.

But Verizon had someone not scared to make a stupid decision and lucky for him he was also the CEO, Ivan Seidenberg. What Ivan knew and the business analyst didn’t was that copper was dead and the cable companies were getting ready to clean Verizon’s clock playing the speed and video card. Ivan’s decision to move forward with FIOS had no other loftier goal than to ensure that Verizon remained in business. A failed decision here may have meant that you’d be complaining now about your Comcast mobile service. This was a do or die decision.

Returning to WebRTC, it’s not quite that dramatic, but the technology barriers around voice & video have been lowered dramatically. It is easier and less expensive to build voice & video applications using WebRTC. ¬†While you’re busy trying to figure out the business case, your competition is not. They’re focused on a developing a variety of new & old applications and they’ll be competing with you with an entirely different cost basis. In short, they’re looking to clean your clock.

Lucky for you, experimenting with WebRTC isn’t going to cost $3,897 per sub but saying there is no business case is missing the entire point. This is all about change.