Yippee for IP: A network boom to be grateful for

It's one of the oldest clichés in the management consultant's handbook - if you want to make money in a gold rush, don't mine the gold, sell the shovels. It's so old and so hackneyed that it may well date back to the California gold rush of 1848. But there's some truth in it.

It's been a bad six months for those who work in what we now laughingly refer to as the new economy. You don't have to be a regular to silicon.com to know things have not been going well of late - lay-offs, bankruptcies, profit warnings, power cuts, and now even an earthquake have assailed the industry. But the truth remains the same: there's gold in them thar hills. And it's good to see a report that stands up and supports that. The global IP backbone will be worth $225bn by 2006, according to Analysys research just out. Those clever folks who carry all our data around are set to make a killing. Perhaps it's selling donkeys in a gold rush (robust, carrier-class donkeys at that), rather than shovels, but it just shows - put a sensible business model together, sell a service that people want, and you may well make a stack of cash. And if one rule of gold rush economics is "Don't mine gold," the other one is "Don't rush". Gold was first found in California in January 1848. Production didn't peak until 1952. The next few years will still be a struggle as the weak fall by the roadside or are taken over. But with the IP market set to grow to be worth $250bn by 2006, up from $50bn in 2002, things will be anything but a grind for the survivors.