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Tuesday, July 27, 2010

Magnificent post by Internet-thought on telco CEOs

Required reading - especially parts on why telco execs pretend to be competing with Google and Apple to justufy their huge salaries for running a utility (ahem, like regulators who pretend not to be regulating utilities), then invest in IT service companies because they screwed up content (Endemol, movie companies, web portals):
"IT-services companies are the construction companies of the digital age. IT companies are just like your local builders. They are lying, thieving, unprofessional, shoddy bastards you can't do without. Everything would be better if you could Do It Yourself, except that you don't have the time and the expertise and you've seen too many DIY projects fail horribly. So you hire a bastard IT-company (builder). Really there is no difference between a construction company and an IT company. Both make life hard for the customer and the supplier. An IT company is always faced with a customer who underestimates the work, but who still rather pays someone else to do it, than do it themselves. So whoever the customer chooses, it is generally the one with the second lowest price. This is the guy who didn't calculate all the contingencies well, but was at least able to name some to comfort the customer, who knows there will be contingencies. Then the customer and the supplier set off on a perilous journey of over expectation for both the end product and end profit. Half way through they know the journey is impossible and neither are going to get what they want. For the remainder of the journey they fight over all the extra work that needs to be done. In the end neither is happy, both claim they paid too much and got too little etc. So low margins, high hassle. And this is the market telcos want to get into, because somehow it fits their high margin business.."

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