I think it was Cisco’s John Chambers that once said that big companies can’t innovate, as he refocussed a large part of their R&D budget to nurturing and developing partnerships with small companies that could. Today we are seeing a similar trend in the pharmaceutical industry, where large internal research labs are being replaced by smaller external research companies.
And it is smaller, more nimble companies that are developing innovative business approaches, technologies, and service delivery models in broadband; not just in the UK but across Europe. Heavy Reading predicted that around 60% of European fibre connections would be delivered by non-incumbents, with the largest sector being local municipal networks led by smart, small-scale innovators.
While the pattern in the UK is a little different, we too are seeing innovation growing just as it has across the continent, but these companies need space and support to develop in order that their impact can be felt, their promise can be assessed, and for the main industry players to construct partnerships or acquire the best of them. So with this in mind, the Government’s policies for supporting SMEs in public procurement exercises and the wider localism agenda are both smart and well timed if the UK is to genuinely deliver “Europe’s best superfast broadband market by 2015”.
Few sensible people would argue with the policy – but there appears to be growing concern over the implementation.
The announcement of BDUK’s intention to procure a national framework seems to have simultaneously divided the industry and undermined the Government’s policy objective. Having spoken to industry players that say they’ve seen drafts of the procurement plan, they tell me that it will require revenues of at least £40m generated in at least the last two consecutive years, excluding not just SME’s but many of the established players in the industry as well.
Nobody doubts that delivering such an ambitious plan will be very hard, but side-lining the most nimble, innovative players won’t make it any easier.
Let’s hope the rumours and grumblings are ill-founded!