Wednesday, November 14, 2012

Google Agile: Boldness in the High-Speed Internet Industry


In a market saturated with claims about the virtue of faster speeds, Google has staked its claim in the broadband internet industry.  After generating an outpouring of buzz in cities around America with a contest to become the pilot city for Google’s broadband network, Kansas City will finally receive details about the service it can receive from Google’s massive infrastructure investment there.

At a time when other major internet providers roll out new, gimmicky products every cycle, Google believed that customers deserved better internet service.  Far better service.  The network that Google has spent over half a billion dollars developing in Kansas City is estimated to increase internet speeds by 100 times over the industry standard.  Although there are sizable up-front costs to consumers (high monthly fees as well as a $300 upfront construction fee), the Google Fiber network is a remarkable display of boldness. 

Management literature suggests that successful companies know when to indulge in a bold strategy and when to act patiently.  Having witnessed the offerings and scalability of existing internet providers, Google thought it prudent to display its technology on a grand skill in a mid-size, demure American city – a bold move. 

Google also thought the timing was right to invest hundreds of millions of dollars in a product that has not been demanded; after all, how much speed can the average household discernibly demand for checking their email and Facebook?  And yet, projections indicate that fiber networks are the future for internet usage and data storage, placing Google in a commanding position given their pilot investment in Kansas City.

It is fair to say that only Google, who has enough cash and organizational agility to dabble tangentially in other industry spaces, can afford to act so boldly in a market of a few large actors.  The point stands, however, that a strategy featuring calculated, periodic boldness is the mark of an industry leader, or in this case, a soon-to-be leader should Google Fiber impress as expected.

This theory raises an important question worth considering: how do companies without the financial and organizational heft of Google exhibit organizational agility and boldness without accepting an unacceptable level of risk?

Sources:
http://www.informationweek.com/telecom/business/google-fiber-hooks-up-first-customers/240134933

“Google Unveils Superfast Internet in Kansas City, Mo.” By John Eligon. Bits Blog for The New York Times. <http://bits.blogs.nytimes.com/2012/07/26/google-unveils-superfast-internet-in-kansas-city-mo/>

Competing through organizational agility. By: Sull, Donald, McKinsey Quarterly, 00475394, 2010, Issue 1

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