Not so long ago, in the United States and other industrial nations, basic capital-intensive services such as electricity, gas, rail travel, telecommunications, and water were delivered by monolithic monopolies. Almost all of them were heavily regulated or owned by the state. But over the past 10 to 20 years, these industries have disaggregated into businesses that perform one segment of what had formerly been a vertically integrated product-delivery process. The provision of electricity, for example, now involves four distinct businesses focused, respectively, on generation, high-voltage transmission, low-voltage distribution, and retailing. Significantly, each service in the first wave of disaggregation rested on an asset base owned by the company providing it.

The first wave sparked tremendous innovation and improvements in efficiency by introducing competition into those parts of the business system—such as generation in electricity and long-distance service in telephony—that are not natural monopolies. As a result, the logic of disaggregation has become widely accepted, even though the process has some way to go in many countries.

A number of companies are beginning to experiment with disaggregation at a second, deeper level. The major difference between this stage and the first is that now only one of the resulting businesses...