Telepocalypse

Reintermediation, Cisco-style

I don’t think everyone has twigged how significant Cisco’s purchase of Linksys was for the future of an open Internet.

Microsoft have mediated all value flowing between a PC application and the PC hardware by interposing Windows in the middle. By controlling the default settings such as the desktop icons, they can route customers to other Microsoft or preferred third party services. They know how to capture and monetise the value of that open hardware platform. Technical interoperability can also be used as a cudgel to blugeon competition to death.

Cisco are heading towards the same situation. Instead of the PC platform, the open hardware platform is the Internet. Linksys gateways are mediating all flows of value into and out of the home. They’re even reintermediating themselves between Microsoft and the rest of the world.

As a nameless acquaintance recently told me, if people think Microsoft is a ruthless monopoly, they should try taking a look at Cisco and Intel.

How can this happen? Well, take their most recent product announcements. What if all Linksys gateways are pre-provisioned to one favoured VoIP service provider?

Even wickeder would be if Intel agreed to make the next Centrino have some, err, embrace and extend WiFi additions that only worked with Linksys gateways. Or if the big iron Cisco routers in DSL providers and cablecos had features that worked better when end users have Linksys boxes.

I was going to say that Cisco makes Bill Gates look like Mother Teresa, except that she turns out to be less than a paragon of virtue. I just hope you weren’t thinking that open source, open standards and a weekly five bucks into the collection dish were going to make us all free.