There is an interesting tension these days between open and closed services when it comes to quality of service (when I say “quality of service” i mean that in the broadest possible sense).
Consider the following:
1. Phone service. Compare skype vs landline or vonage vs comcast voip
2. Email. Consider gmail (ads, no techsupport etc) vs “pro email” from Exchange or ISP email.
3. Video. compare video from the open internet vs from a telco or cableco
4. Blogs or publishing. host it yourself with Moveable Type vs 3rd party hosting (ie hosted WP or Blogger)
5. Web services. Own your own hw vs managed hosting vs amazon s3/EC2.
(There are plenty of other examples)
On one end of the spectrum is a best efforts service quality and on the other end is something that approaches bulletproof status or carrier class. There is a price tradeoff. Quality tradeoff. And there is an innovation curve tradeoff.
In many cases in comes down a “quality of signal” vs speed/execution of features, functionality and user experience.
Why don’t more people use email from their ISP where there is tech support and no ads. Instead many of us prefer gmail. Same thing with web services that use Amazon’s infrastructure. Amazon may go down and it’s outside the control of the developer but the tradeoff is capital efficiency, time to market, etc. Amazon is working just fine for many of our portfolio companies.
On the other hand, Vonage never worked for me. But Comcast VOIP is rock solid.
The same is true for video. High def television from directv or comcast or verizon is stunning. Web video doesn’t look like that yet. But the convenience and user experience of web video trumps quality for some people. Not for others.
Here’s another example. WHen you pay Comcast you expect it to always work. If they don’t call you back you get upset. When Facebook goes down what is the user reaction? And what is the relative value?
Open platforms like the internet is bringing innovation faster than ever to new markets and applications. It is shrinking & disrupting many markets (ie telephony, newspapers, advertising, etc).
It also changes the quality of the signal.
At least for now.
Open platforms can always innovate faster than closed networks (think open internet vs the historically closed mobile network pre-iphone). But open platforms also bring along tradeoffs vs managed services.
The race is on. And the stakes are higher than ever. As our networking pipes get fatter and web applications get richer it will be interesting to watch it play out.