Telco right to walk away as email gains peter out
OPINION: I saw UnitedFuture MP Peter Dunne walking through Johnsonville this week. He lacked his normal bow-tie, but his signature cowlick hairstyle was looking resplendent in the late afternoon watery sun.
The overwhelming impression was of a man walking lightly, freed of a load on his shoulders. No surprise really, given his decision two months ago not to stand as MPfor the Ohariu electorate for a twelfth time.
In government circles, Dunne developed a reputation for being cluey around revenue and future focuses on technology. In the Ohariu electorate, he enjoyed a high profile, with the running joke that he would attend any opening, even if it was just an envelope.
However, after having a pretty good spin for 33 years, Dunne could read the writing on the wall, or more specifically the numbers in the polls. At the time he announced his departure he was trailing Labour candidate Greg O’Connor by 14 points.
Given O’Connor has a mile-wide profile following his Police Association gig and is surfing the Jacinda tsunami, that lead was only going to widen.
So Dunne’s strategic retreat made good sense, despite the fact he got lambasted by some for ‘‘taking the easy option’’.
It must be lambasting season, as a fair number of companies have come in for the same over recent times, including SLI Systems, Sky TV and Vodafone.
Vodafone is an interesting one. One of New Zealand’s biggest telcos, it announced last week that it was abandoning its email service.
This means a quarter of a million New Zealanders will have their Vodafoneenabled email closed down in November. This covers a plethora of legacy providers and email addresses including Paradise, Clear, Ihug, Telstra and Vodafone.
Initially the idea seemed so preposterous that it was denied as a scam when the first announcement emails went out to customers. The message boards on Geekzone and the pulse on Twitter vibrated with warnings to ignore what was obviously a con.
Then when Vodafone put the announcement up on the website and confirmed to media that they were indeed getting out of the email business, denial turned to anger.
The idea that one of the largest telcos in the country couldn’t run a simple email service seemed preposterous, and customers were fuming.
In social media land the question was asked: ’What does this say about Vodafone as an internet service provider or more generally as a technology company?’’
Do they know anything at all about this interweb thingy?
It’s a fair question to ask. Turns out the answer is that they know quite a bit.
Twenty years ago, when Vodafone’s predecessors started offering email, it was a pretty simple thing.
Some cable plumbing, a lever to throttle speed and a few filters to catch nasties and you were pretty much done.
Anyone could do it, and in the land grab for email addresses many did. Often on the smell of an oily rag in the hope they’d get scale or be gobbled up by someone like Vodafone.
This list included the original Wellington digital anarchists Paradise, along with long-forgotten names like Wave, PC Connect and Quik. But from those halcyon days the volume and complexity of email grew out of all proportion. And the economics changed.
The number of nasties that could come through emails increased exponentially and continues to every day. Vexatious spam now makes up something like 90 per cent of all content. Just ask Spark.
Meanwhile, email changed from something associated with home or the office, to something that travels in your back pocket, runs off the closest wi-fi and is powered by global cloud providers who offer it for free.
Well, not exactly for free – they mine and sell your data for truckloads. They just don’t charge you money for the product.
Mind you, as a smart woman once told me, if you don’t pay for the product then you are the product.
So companies like Vodafone have rising costs to provide the service, and competitors who offer better services for free. And realistically, no telco is going to be able to innovate or scale as quickly as Gmail or Microsoft Outlook.
Nor will they be able to harness it as the key to the door of a broader digital ecosystem like the big boys do.
So really it was a no-brainer that Vodafone had to pull the plug. It’s just surprising that chief executive Russell Stammers didn’t pull it earlier.
When you have no competitive advantage, minimal growth opportunities and a long list of risks then relinquishment makes good strategic sense.
Just ask Peter Dunne.
Mike ‘‘MOD’’ O’Donnell is an e-commerce manager and professional director. His Twitter handle is @modsta and he’s not always good at walking away.