The Business Model of Web Services, WiFi and Weblogs? Kevin Werbach has a column at C-net, "Tech's big challenge: Decentralization" the theme at Supernova. He points out one of greater benefits of decentralization is cost savings (through economies of span & scale):
"By using a decentralized architecture, Napster saved $600 million in storage costs and over $6 million per month in bandwidth expenses, according to Bear Stearns analysts Chris Kwak and Robert Fagin. Name one company that wouldn't want to enjoy those savings, especially in a difficult economy."
Its common lore in the valley these days that the next great companies are being born right now, against all odds. I attended at talk by MIT economist Lester Thurow the other week, where he pointed out that amidst technology waves populated with thousands of companies the ones that survive and prosper are the ones that get the business model right. In 1929, when the market crashed 95% there were 2000 auto companies. By 1960 there were 3, each with solid and differentiated business models.
There is no question about the cost advantages of decentralized systems. My question is what is the sustainable business model? Is it being an arms merchant in a standards-based war?
10:03:30 AM 
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