Stardust Global Ventures

Most of us have heard heard the story that extinction of the dinosaurs came about some 65 million years ago due to the impact of an asteroid on the northern Yucatán Peninsula, Mexico. It’s referred to as the K–T extinction event describing the boundary between the Cretaceous Period and that Tertiary Period.

Recent news has given me pause to think about this in terms of the communications industry. In particular, I find myself referring more and more frequently to the legacy telecommunications industry as dinosaurs. I’ve even thought about it just a bit more broadly. Here’s why:

• Dallas-based AT&T will lay off 12000 within year
• Cisco To Shut Down For 4 Days At Year End
• Nortel To Explore Bankruptcy (NT)

AT&T, if we hearken back to the old Bell System is the mother of all dinosaurs in telecom. And while even back in 1984 the death knoll sounded, the legacy AT&T (we affectionately call them Bellheads) has remained in motion for a long time. Today AT&T is doing pretty well in the wireless world, but the legacy of the wireline is about to see what I think is some normalization.

Cisco isn’t a telecommunications company in the traditional sense, but in our world of unified communications, they’re certainly a big animal in that space. Shutting down operations doesn’t send a signal of strength and confidence even though Cisco blusters how well they’re doing. I personally have doubts about Cisco’s viability for the next 5-10 years.

Nortel is one of those companies I’ve written about many times. Personally, I feel like they lost their identity and their real focus when the acquired Bay Networks back in 1998. Since then Nortel has seemed to fight and endless struggle to find their real message and articulate their valule proposition. It’s as if they lost their way and have been stumbling ever since, even while they continued to lead the industry in many areas. I expect to see Nortel wind up sliding into the pick-a-part piecemealing out of assets before too very long.

This all makes me wonder – is the giant balloong of the Internet and wireless broadband the extinction event for legacy telecommunications> I think it is. The major legacy telcos and their equipment partners, have, in many cases, suffered a malaise that’s left real research and development in those large enterprises woefully behind. The spirit of innovation moved from those centers of thought leadership to the small entreprenuerial space instead.

The impact of the Internet meteor struck in 1969, but the tidal waves of change have been continually reshaping the landscape ever since. Extinction is indeed the ultimate end for many companies as these waves of change have been changing the landscape of the telecommunications industry for 40 years.

So for a bold year end statement, I’ll postulate that telecommunications is dead and unified communications has risen to take its place. Our tools for talking and collaborating have changed. Natural evolution dictates that some (I think many) of the legacy companies will go the way of the Studebaker, Edsel and the Tucker.

Since we’re coming to the end of another year, I find myself thinking about which companies are dinosaurs and that I think will vanish into the past in the next two or three years. I’ll share my choices once I’ve thought about it a bit more, but I’d love to hear who you think are candidates for the telecommunications deadpool.

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