With expensive gear that requires controllers and network operations centers (NOCs), and which have very high reliability promises, somewhere between cable/DSL and T1 service, a small network isn’t financially feasible, while a large network has very high overhead. These big networks required aggressive customer acquisition models, and ubiquitous coverage among other factors.

When you scale large networks bigger, costs don’t rise in a linear fashion. Adding more customers might result in a large increase in customer support budgets. Or if you go from needing one person 24 hours a day in the NOC to two, your costs more than double given absenteeism, sick days, etc. And so on.

Meraki’s approach has to play out, but their idea is to cut the NOC out, essentially, and remove the cost of controllers. I’m unclear on what their maximum throughput is–1 Mbps? 5 Mbps? It’s hard to know. But their equipment is being largely used in best-efforts networks, which have lower expectations, and often in free networks, which come with fewer promises.

The real question is that even though Meraki says that nearly every network they seed grows, sometimes quite quickly and to a large size. As these networks get bigger, can an operator (fee or free) keep costs very low and still serve users? Or do management issues, backhaul, and other elements escalate faster than the cost savings in these networks?