Jan 11, 2012

Why don't businesses "cut the cord" the way consumers have?

Consumers have embraced "cutting the cord", and many have eliminated their cable and telephone bills through use of cell phones, VOiP and streaming media. In fact, I was thinking about this before coming in to the office today while watching an episode of Clannad (weakness for Anime admitted) on Netflix and talking to my girlfriend on my iPhone. I have saved almost $2000 per year by canceling Cable TV and landline, with no real impact other than having to hang out with friends at the local pub to watch a few football games.

Why haven't business done the same? The cost savings would be substantial, and after a short period of adjustment, I can't point to anything in my daily life that has suffered as a result, college football championship games excepted.


There are a few factors here.  First, most companies are conservative by nature.   There is always a risk that a new technology that has been embraced with significant capital expenditure only to be obsolete a short period later.  Also, a downside of being an early adopter can be the use of first gen technology that is barely out of beta, and reliability is often the primary concern with equipment/services.  There are also more complex concerns for a business trying to "cut the cord" than there are for individuals.  It is very simple for an individual to switch to VOiP at home, using an existing broadband connection, whereas a business needs multiple line, high quality audio transmissions and near perfect reliability.  This may not be possible through an existing pipeline, and may require additional expenditure to ensure sufficient bandwidth.  I'm not saying it can't be done, SIP trunking is out there and it works, but it isn't as simple as it is for an individual.  I do think we will see more and more businesses "cutting the cord", but we are at the early stages of seeing unified communication broadly implemented.  BTW, I think Clannad is really cool too; it can be hilarious at times and the animation is fantastic!

Businesses are different than consumers, and in some cases lag far behind consumers in adopting new technologies. Or they might partially adopt a new technology but without actually using it to completely replace older technologies.

I suspect many will eventually cut the cord, but it will take a long time. Far longer than it took with a lot of consumers. Perhaps that's a good thing though since businesses need to be cautious about how they integrate and replace older technologies.
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