It came to my attention recently that Orange, the French incumbent ISP and a powerful market player in numerous other European and non-European countries had launched a Testlab for Gigabit apps in San Francisco.
It’s an interesting move, one that on paper goes in the right direction although one might argue that it’s coming a little bit late. I’ve been advocating for years that ISPs need to understand how to integrate OSP innovation in their offers, either as an intermediary or simply through exposure. Step one is for said ISPs to be aware of what’s out there as early as possible in the development cycle. A form of externalized innovation.
The lab works very simply by giving start-ups access to gigabit connectivity for free to test their products and services. In exchange Orange, presumably, gets early visibility on interesting or innovative products that require heavy bandwidth to deliver. In fact, the blurb on the GigaStudio website suggests distribution opportunities through Oranges international footprint. In other words, once they identify a promising service, they can help spread it around because they have a critical mass of Gigabit customers already.
Let’s forget for a minute that most likely Orange does not have a critical mass of Gigabit customers (fiber is only deployed en masse in France, and Gigabit isn’t on the menu yet), the focus is on heavy bandwidth apps. Still, the move raises a number of interesting questions.
First and foremost is the following: is a gigabit app an app that requires a gig at the point of production or a gig at the point of delivery ? I would argue the latter, the former being, all things considered, easy to set up in most large cities (provided you can pay). Then what does the lab offer exactly? Wouldn’t it have made more sense to set it up in a city that has gigabit to the home already? Chattanooga, Kansas City, Austin, Wilson NC, etc. Hell, even closer to San Francisco in Brentwood just across the bay, where Sonic is deploying?
Tied to that is a second broader question: why Silicon Valley? Silicon Valley has been the hotbed of startup activities, but actually very few of these are wireline focused. Most of the investment in the last decade has been in mobile services and software, not wired services and/or hardware. That’s not to say there will be no interesting wireline start-ups there ever, but I suspect Orange set up the lab there because they already have a presence in San Francisco rather than go where they might find more interesting and relevant projects. A typical case of looking for your lost watch under the streetlamp even though you lost it elsewhere just because there’s light.
Finally, can Orange really play an intermediary role in distribution? Can they really speed up the ramp for startups to worldwide critical mass? I doubt it, although I’m happy to be convinced otherwise. It would certainly require a massive shift in culture and commercial approach. Not that it would be wrong, quite the contrary. But if I look at a functional example of exposing customers to cool apps instead of developing yourself (albeit at a much smaller scale) I think the guys at Adamo are doing the right thing, embedding a Chromecast into every subscription. It’s (in my opinion) the smart and cheap approach to app exposure, but I can’t imagine Orange doing anything like that…
Still, I’m intrigued, and I might very well try to meet these guys next time I’m in San Francisco…