Still can’t understand why bandwidth is being “stockpiled” to provide “Room to Grow.” If the bandwidth was cheaper more apps would be found. Despite growth slowing (to only 26% CAGR), “Cloud” being the source of most of this growth, and really sufficient volume for volume pricing to work, 86% of the capacity isn’t lit (and a reasonable proportion of what is isn’t at 100Gbps even.)
If this is on a lambda basis, OK, you sell the beast not the cut. Otherwise, start a market, take the vig, and let them fill it.
Even travel sites understand that.
It turns out that the average rake at Priceline Group is even higher today, as they allow merchants to voluntarily bid up their rake for better placement in the network (you can see this in the table above). This is one of my favorite marketplace business model “tweaks.” You start with a low rake to get broad-based supplier adoption, and you add in a market-driven pricing dynamic that allows those suppliers who want more volume or exposure to pay more on an opt-in basis. This way no one leaves the network due to excessive fees, yet you end up with a higher average rake over time due to the competitive dynamic. And when prices go up due to bidding and competition, the suppliers blame their competition not the platform
Rake, vig, brokerage fees, it’s all margin in the end. And those bloody pipes would be full. Coming from historic scarcity, where the bit you don’t move now you never move, the wasted opportunityis intolerable, particularly as transistors (and George Gilder) taught us that wasting a plentiful resource is how we progress.