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One example of this occurs in the automobile industry1 and how b-2-b services have evolved within it. In this industry, there are several levels, each with distinct uncertainty. There are parts for automobiles — these have low uncertainty. They are a commodity, and users don't need choice. For transactions involving parts, centralized systems have evolved. In other areas, such as service agreements, where market uncertainty is high, centralized services have not evolved because distributed systems are more successful because of their flexibility. This example shows how my
1 In a conversation in the defense of this thesis with Marco Iansiti.
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argument of the value of experimentation, which provides choices for users, depends on the uncertainty.
While useful and general, this argument in its current stage has limitations. Foremost is the difficulty of input data, such as market uncertainty, or the difficulty of arriving at a realistic value for the business and technical advantages of centralized management for a particular situation. The usefulness of this book is a high-level view about the choice of management structure in light of the ability of service providers to know what users want. It cannot make precise forecasts; rather, it predicts trends.
Another weakness of this work is the complexity of each case. While applicable to a wide range of situations, each case must be carefully analyzed. There are many subtleties when management structure shifts, and each case is different. This was true in the two case studies. In email, technology was potentially important in the shift to Web-based email, whereas regulation was unimportant. In the case of voice services, regulation needed careful treatment, while technology was not a factor requiring thoughtful analysis.
Common Thread — Flexibility
The common thread in all the previous examples is the success of protocols and infrastructure that allow flexibility in management style. At all levels of the stack, many protocols and applications being adopted are flexible in this regard. At the bottom layer, the wireless link market seems to be tipping toward the 802.11 set of standards for LAN connectivity. As Chapter 11 illustrated, the wireless Wi-Fi link market is very flexible in the management style it allows — from a very distributed, do-it-yourself infrastructure to a more centralized structure, promoting more efficient resource usage, technical advantages, and easy billing. At the application protocol layer, SIP and Internet email protocols demonstrate the same type of management flexibility that the 802.11 infrastructure allows. As Chapter 10 demonstrates, SIP allows true end-2-end services or more centralized architecture, when services are designed around an SIP proxy. Internet email allows both a distributed and centralized management structure, as discussed in Chapter 8. Finally, at the highest level, are Web-based user applications, which have this property of flexible management structure. Web-based applications such as email can have a distributed structure, with ISPs running POP-based Web email, or a more centralized structure (Hot-mail). Protocols that are flexible in regard to management structure and successful at many layers illustrate the value of flexibility in management architecture.
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Link layer protocols send data directly from host to host on the physical media, which may be twisted pair, fiber, or wireless. My focus is on wireless — 802.11 and 3G. The current evidence indicates that 802.11 is growing fast in many different markets. The commodity nature of the equipment, easy setup, enthusiastic response from users, and good performance enable this growth. Fewer distributed models of 802.11 are becoming popular, as organizations such as Joltage and Boingo start to impose a more centralized management structure with wireless service in airports, hotels, and other hot spots. The future of 802.11 seems solid as a wireless LAN technology, and it might prove useful for other applications. The flexibility of management choice with 802.11 has stimulated the growth of this new technology because it meets the needs of so many users.
Higher up the protocol stack are application layer protocols for building services such as SIP and megaco/H.248, or the Internet set of email standards, along with the applications that use these protocols. SIP and megaco/H.248 are two protocols used for building Internet services with voice as an integral component. As discussed in Chapter 10, SIP is very flexible in the range of management structure it allows, but megaco/H.248 is not. This is similar to the flexibility with 802.11 because SIP and 802.11 both allow a continuum of management structure, meeting the needs of different user groups. SIP allows end users to experiment without anything within the network knowing what these end users are doing, and SIP allows centralized service providers to manage SIP proxies that impose a centralized structure. SIP is catching on because of its flexibility — it allows users to do what they please. Distributed management gives users freedom to experiment, while centralized management gives users efficient use of resources, technical advantages, and easy management. The email set of standards also exhibits this trait of flexibility in management structure. The protocols allow building email systems with a centralized or distributed management structure. End users can run Sendmail on their local machine, or they can use a more centralized server along with the POP protocol or a Web-based centrally managed email service such as Hot-mail. Internet email users have choices in how their messages are managed: With POP, the user must manage messages on his or her computer; however, with IMAP and some Web-based email services, users have the choice of leaving email messages on the email server, thus delegating the responsibility of message management to this server — a more centralized management structure. SIP and the Internet mail set of standards are two examples demonstrating how the same protocols are able to build applications with both centralized and distributed management structures.