Convergence to cannibalise service providers, SMS

Gartner has predicted shrinking service provider ranks and the death of SMS as a business tool as technological convergence accelerates in coming years.

Analysts at this year's Gartner Symposium talkfest in Sydney said the rate and breadth of convergence meant the days of certain services and service delivery types were likely numbered.

Bob Hafner, a Canada-based analyst at Gartner, said told attendees that network convergence was much broader than simply IP telephony.

“We're seeing a whole wealth of convergence offerings across very different lines of networking,” he said.

IP telephony was making voice into a communications application and was spurring LAN convergence while MultiProtocol Label Switching (MPLS) was doing the same for the WAN, Hafner said.

“Wireless networks and wired networks are coming together,” he said. “Also, our personal and business computers, they're converging. In my life, for one, it is very hard to tell when my business day ends and personal life begins.”

As all those different technologies converged, service providers would be under intensifying pressure to compete for delivery of any and all services that began to overlap, he said.

“From a service provider [perspective], putting all those on a single network is going to cannibalise existing and long used services,” Hafner said.

Traditional telecommunications services were particularly at risk. “You're now going to cannibalise that cash cow revenue that has been there in some cases for 100 years,” he said.

“Some service providers are not going to be able to change quickly enough. Some aren't going to be around in a few years. There's definitely going to be some change in this market.”

Ken Dulaney, a US-based Gartner analyst, added that SMS services – a phenomenon only now emerging as a profitable business offering – were almost certainly an example of a telecommunications offering slated for demise, at least in business.

“SMS is probably going to die out as a business phenomenon, to be replaced by wireless email,” he said.

When wireless email could go anywhere, SMS services would become superfluous. And as IP networks spun a web encompassing all workplace and home applications, that looked likely, Dulaney said.

“Many people are trying to become real-time enterprises and so improve the throughput of their supply chains. But the supply chain is an information chain and that needs to be continuous to be effective,” he said.

Five years from now, bosses everywhere would see staff response times to emails as key performance indicators, Dulaney predicted.

“We believe that email will be on every device in the next five years and we'll begin to use it as the global economy will push us all the way,” he said.

Robin Simpson, an Australia-based Gartner analyst, pointed out that technologies such as Wi-Fi and GPRS were already showing signs of decline.

“First of all, businesspeople want broadband, at 200Kb/s or more [for] email, web browsing, and perhaps in future some applications that we use at the moment on the LAN,” he said.

Sydney already had four commercially available wireless broadband technologies, Simpson said.