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CHRISTIAN MAYAUD

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Internet eVolution | The Layering Market | Telecom eVolution

30 The Verticom Group

Internet E-volution of Vulnerable Markets

Phase I -- Rapid Spread of IP Standards

“Up-Market” Incumbents (“Mortar” Players)

• High-Cost High-Margin Vertically-Integrated Proprietary Premises-based Solutions

“Down-Market” Challengers (“Click” Players)

• Low-Cost Low-Margin Horizontally-Layered Open-Standards-Component-based Networked

Solutions

Phase II -- Rapid Market Portalization

• Market Incumbents Disintermediated by a Rapid Influx of Portal “Re-Intermediaries”

• Temporary “First Mover” Advantage rapidly leads to Intense “Me Too” Competition due to low

barriers to entry

Phase III -- Rapid Portal Commoditization

• “Differentiation Imperative” leads to Rapid “De-Differentiation” (Commoditization)

• Driven by the Rise of “Component Platform Players” (Portal Arms Dealers)

Phase IV -- Rapid Market Balkanization

• Market fragments into many Sustainable Digital Franchises

• Fragmentation sustained through --

– Traditional Branding & Marketshare

– Rise of “Stickiness” (High Customer “Switching Cost” Barriers Erected)

• Dynamic User-Profile-Driven “Smart” Network-Directory-based COMtent

– Level-Playing Field established & maintained by Platform Players

Phase V -- Rapid Market Layering

• Portal Consolidation (Customer Ownership Layer – Top)

• Platform Consolidation (Platform Ownership Layer – Middle)

• Rationalization of Internet Channel & Distribution with “Real World” Processes (Bottom Layer)

Don’t Drink the eKool-Aid Market eVolution

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