Air Time: Wi-Fi and Commoditization

Posted by Dave Molta
April 19, 2006

Quick! What do soybeans, pork bellies and natural gas have in common? If your answer involves your favorite local diner, you're way off track. These are major commodities bought and sold on international exchanges every day. Commodities are a good thing; they imply an expectation of quality and availability along with price competition. What's not to like about that?

It's commonplace to hear pundits talk about the commoditization of IT. And while there may be a lot more variation among notebook computers than soybean bushels, the prevailing wisdom is that technology commoditization is also beneficial. However, there are times when commodity technology impedes progress and establishes an ugly legacy with complex challenges. Wi-Fi is the latest example.

All Hail Ethernet!

If commodity Wi-Fi is arguably bad, then an opposing example is Ethernet, which stands as a testament to the power of open standards, the economies of siliconization and the market power of mass adoption. Despite the sage advice once given me by an IBM salesman--that the laws of physics would prevent Ethernet from ever exceeding 10 Mbps--the technology has been continuously enhanced over the years. It dominates not only the LAN but, increasingly, metro networks as well. It's interesting that, in an era of MAC-layer switching, very little of the original contention-based Ethernet specification is relevant. Still, it's the poster child for all the good that comes out of standards and commoditized technology.

While the incredible success of Ethernet speaks well for the value of commoditization, what happens if a technology reaches this stage prematurely, in a form that inhibits future progress? Like any legacy system incapable of meeting current, let alone future, needs, it begs to be replaced by something different, but doing so presents enormous obstacles.

Related Reading

More Insights