Commoditisation of the Internet

Commoditisation of the Internet

Commoditisation of Internet is a threat to business

The commoditisation of Internet has clearly entered the South African marketplace, with differentiation being eroded by competition which has led to customers treating Internet as a commodity and selecting services based on price alone.

This is a dangerous point for businesses and the industry as Internet Service Providers (ISPs) struggle to differentiate themselves. When commoditisation happens, customers choose Internet based on price alone without examining in detail what they are getting or whether it will enable their business vs hamper it.

Because the Internet is not a tangible ‘product’ that you can touch and see, it makes it harder for businesses to place value on their Internet and so they defer on price. Customers will spend thousands on their mobile calls and data, yet when it comes to Internet they view it differently.

Telecoms industry is somewhat at fault for not explaining the differences between Internet services to make a quick sale and by using confusing and often misleading marketing messages. In addition, businesses who may not know any better are making decisions that may in fact cause dissatisfaction when the Internet they purchase does not meet their needs.

ISPs sell businesses a 10 Mbps service, which means that however you cut it, 10Mbps is exactly that 10Mbps, that won’t change but how that 10Mbps is used does. Bandwidth, contention ratios, service levels, upload speeds are just as important and are often not properly explained or are placed in fine print in the terms and conditions (T’s & C’s).

Internet is in fact not a commodity but a tool for business enablement. Most entrepreneurs tend to let the IT department ‘take care of all of that’, but they are seldom aware of the operational impact the Internet has on their company’s efficiency and ability to make a profit.

At Zinia we believe that once business owners see the Internet as a valuable business tool and not a commodity, they will understand the importance of bandwidth and how access to that 10Mbps line is critical, as priority tasks become more clearly defined. It’s about efficiency, for example, most of your available bandwidth needs to accommodate the early morning email influx, from there, access to critical software/cloud based service tools like those for sales and accounting teams need to take priority. It’s about getting money in, and controlling what money goes out.

Efficiencies around profits are also centred around people, those who work for you, and your customers. People are happier when things just work, for most of your employees, their productively is increased when business tools like the Internet let them do their job. If page slowdowns negatively affect your employees, imagine the impact they can have on your customers. That delay will trickle into client service costing you money. Did you know that earlier this year Amazon calculated that a 1 second delay on their page speeds could lead to a potential loss of $1.6 billion in sales each year?

The value of Internet comes in with the service contract and the supplier’s ability to align with your business’ needs. The best way to do that, is to understand how to use the Internet to enable you to make money.

ISPs need to be accountable and committed to their clients. This means being responsible when selling and adhering to their own T’s & C’s. As business models become more reliant on Internet technology, ISPs must take consultative approaches that are product agnostic if their customers’ businesses are going to be successful.[/vc_column_text][/vc_column][/vc_row]

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