Investing in Internet Infrastructure!
The point with Internet Infrastructure is that it runs the Internet :), the Internet is not going away, or going to stop growing.
So what is this Infrastructure? Well, let’s break it down into three pieces.
Everything on the Internet sends and receives data, and we all pay for this transfer in Bytes of Data, this infrastructure is location-based, the cables to your house, your ISPs Peering Connections to other Internet Providers, and their connections to Global Fiber rings.
Hosting and Computing:
Be it that you are running a service at home from your laptop or have your own servers in a rented rack, to Virtual Machines at a cloud service provider. You are in all cases hosting an Internet service.
If you are running an Internet service of any value, your service needs to be protected, so we use encryption schemes, antivirus, penetration testing, banning of bad actors via IP
So from an Investor point of view, how do you look at these?
To invest in transfer, you need to think Big and therefore that investment is out of reach to most investors and it is dominated by the large Telcos and Cable companies.
To invest in hosting and computing, you need to host huge amounts of servers and server space, be it in your own data halls or in shared halls, there is a big upfront cost to get started, you also need to consider electricity and peering costs.
To invest in security, you need to be ready to invest in research and development of a product from that research, and understand that there is new development happening in this field on an ongoing basis.
So is there any opportunities here for small investors? Well not without disruption.
So looking at transfer what is the disruption potential? Well, the physical layer pretty much locked in and there is really no innovation at the horizon that feels viable at this time, but there are Low-Level Orbit Satellite systems that could disrupt the existing models, but to get in on the ground floor of LLOs can be tough especially for small investors.
So what about Hosting and Computing, well here we can see more clear innovation and new opportunities, where the biggest would be to bring Sharing Economy to the infrastructure, just as AirBnB disrupted the $500 Billion Hotel industry, we are looking at an opportunity for Software to eat the $250 Billion, and growing, Hosting market.
In Security, the opportunities are few and far apart, so there are limited opportunities for smaller independent investors to get onboard.
Decentralization and Cryptocurrency open up possibilities for smaller independent investors to buy in early and be a part of the disruption, the Internet is growing you could be growing with it.
But do Remember that all Investment is a risk and even the Internet was not a given winner in becoming the global network, so never invest more then you can lose and do your own research before you give your money to any investment opportunity, and if it sounds too good to be true, it probably is.