TECH TALK: Points To Ponder: Points To Ponder

David Tennenhouse, vice president and director, Intel Research on a future with Personal Agents, in an interview with News.com:

You’ll see the PC or the home personal server, whatever you want to call it, evolve to take on a bigger and bigger role. There will be millions of agents per person. Most of the time most of those agents will be dormant, waiting for something to happen. But many of them will be active on your behalf, reaching out to the network, etc. You are going to have an immense number of background activities going on.

We’re already seeing people using agents today, and they tend to not realize it. They essentially get on eBay and they will leave an auction bid. Is that an agent? Well, it depends on your definition. In my mind, an agent is something sitting there on your behalf with a trigger that has been empowered to do something subject to rules that are under your control or supervision.

The real limiting thing right now is essentially that they require too much of your attention. Getting to that next step will be getting them to negotiate with each other.

An article from Accenture on “UbiCorp: A Vision of the Ubiquitous Corporation:

Imagine a world in which meeting rooms scheduled their own cleaning,
furniture companies gave away free chairs, and dolls ordered clothing
and accessories for themselves. Alice in Wonderland? No, these are
just some of the effects of a coming technology revolution, driven by
the ubiquitous presence of microprocessors in homes, offices, vehicles, appliances — and yes,
even dolls. And remarkable as it is that virtually every object in
our daily lives may soon have a mind of its own, the implications and
opportunities for business are even more stunning.

Within ten years, objects embedded with tiny computers will manage most daily tasks, and corporations will deliver goods and services business-to-object, rather than business-to-business or business-to-consumer. For example, the maintenance of a company’s meeting rooms might be set up on an open contract, with one condition — the rooms themselves are the supervisor. Each room monitors and senses all maintenance activity and even directs robots to perform repetitive tasks, like emptying waste baskets. Suppose a waste basket has been removed? The room senses the missing item, and orders a replacement. Similarly, if maintenance personnel are repeatedly late, or fail to show, the room would automatically reduce their compensation. Rather than interacting with a human “facilities supervisor,” the maintenance organization would deliver services directly to the object rooms.

What does all this mean for business? The overall effect will be the emergence of the Ubiquitous Corporation – “UbiCorp” for short – which will deliver goods and services to an ever-growing number of objects, all around us. Business-to-object data will flow both ways through wireless and Internet connections, and all scheduling, record-keeping, invoicing and payments will be fully automated. The need for costly, time-consuming person-to-person transactions will be minimized, freeing workers for more productive decision-making activities, which are in turn empowered through superior insight into real-time business activity.

TECH TALK: Points To Ponder: Points To Ponder

Kevin Werbach on Web Services in Release 1.0:

Web services are software objects that can be assembled over the
Internet using standard protocols to perform functions or execute
business processes. They fill in the white space between applications,
systems and companies with simple messaging, description,
discovery and management protocols and other mechanisms.

Web services seek to realize a widely shared vision for the future of
software: distributed, componentized, standardized, open, scalable,
and Internet-centric.In one way or another, [various] companies hope
to do for applications what the Web did for publishing: reduce costs,
catalyze innovation and dramatically lower the bar for anyone to
create new offerings Instead of mostly static links between data or
content, Web services promise active links (transactions) between
functions.

Beyond the near-term integration benefits, promoters of Web services
envision a world where every company connects to every other, and
systems are assembled and optimized on the fly to meet dynamic
business requirements. Web services are a specific set of technologies
and standards to implement this vision, roughly corresponding to the
“application syndication” category in our earlier framework.

Adam Bosworth of Crossgain (acquired recently by BEA) in an interview to XML Magazine:

What we’re really talking about is the next generation of n-tier
architecture, and it turns out that the next generation of n-tier
architecture needs to be one that can be distributed such that the
Internet is the computer, not just the network. The idea behind any
n-tier architecture is that a program can call another program, or an
application can call another application-in short, that there are
various pieces that work together, but they’re built by different
groups.

For Web services to really go to the next step, it’s going to be very
important that people not repeat the mistake that was made with
objects and reusability, where they didn’t write down this
stuff. Instead, people write down very clearly what the contract is
with the service-where the contract isn’t just, here’s the message you
can send me, here are the messages I can send you back, and here’s the
amount of time that you should respond to me within, and so on. It
should also include, look, here’s the sequence of things that has to
occur-that you’re supposed to do them in-and, by definition, anything
that wasn’t spelled out can be done in any order-and that’s also
missing today.We’ve still got a long ways to go before we have what a
Web services architecture needs for truly having the same kind of
interoperability that you get today between, say, a browser and Web
sites-where any app can go up to any other app and reuse it as a
service, and it’s easy and it’s reliable and when they change
implementation, they don’t break you.

TECH TALK: Points To Ponder: Points To Ponder

An excerpt on software programming from “The Mythical Man Month” by Frederick Brooks (published in 1975):

Why is programming fun? What delights may its practitioner expect as his reward? First is the sheer joy of making things. As the child delights in his mud pie, so the adult enjoys building things, especially things of his own design. I think this delight must be an image of God’s delight in making things, a delight shown in the distinctiveness and newness of each leaf and each snowflake.

Second is the measure of making things that are useful to other people. Deep within, we want others to use our work and to find it useful. In this respect, the programming system is not essentially different from the child’s first clay pencil holder “for Daddy’s office”.

Third is the fascination of fashioning complex puzzle-like objects of interlocking movements and watching them work in subtle cycles, playing out the consequences of principles built in from the beginning.

Fourth is the joy of always learning, which springs from the non-repeating nature of the task. In one way or another the problem is ever new, and its solver learns something: some practical, sometimes theoretical, and sometimes both.

Sean Palmer on “The Semantic Web“:

The Semantic Web is a mesh of information linked up in such a way as to be easily processable by machines, on a global scale. You can think of it as being an efficient way of representing data on the World Wide Web, or as a globally linked database.

The Semantic Web was thought up by Tim Berners-Lee, inventor of the WWW, URIs, HTTP, and HTML. What’s the rationale for such a system? Data that is generally hidden away in HTML files is often useful in some contexts, but not in others. The problem with the majority of data on the Web that is in this form at the moment is that it is difficult to use on a large scale, because there is no global system for publishing data in such a way as it can be easily processed by anyone. For example, just think of information about local sports events, weather information, plane times, Major League Baseball statistics, and television guides… all of this information is presented by numerous sites, but all in HTML. The problem with that is that, is some contexts, it is difficult to use this data in the ways that one might want to do so.

So the Semantic Web can be seen as a huge engineering solution… but it is more than that. We will find that as it becomes easier to publish data in a repurposable form, so more people will want to publish data, and there will be a knock-on or domino effect. We may find that a large number of Semantic Web applications can be used for a variety of different tasks, increasing the modularity of applications on the Web.

The Economist on Programming Languages in its recent Technology Quarterly in an article entitled, “A lingua franca for the Internet“:

On the horizon, programming languages face the daunting challenge of helping to turn the Internet into a more intelligent place. A year ago, Tim Berners-Lee, the inventor of the World Wide Web, published a manifesto for a semantic web. His vision is that computers should be able to recognise the meaning of information on the web by its context, and provide users with much more relevant information than web browsers now do.

There are many ways that this could happen. Certainly, some of the semantic information can lie in the data itself. XML helps to do this. And a standard known as RDF (resource description framework) defines how to encode some semantic meaning into XML-for instance, whether one object (say, a person) has a relationship (eg, owns) with another (say, a car). Helpful as RDF and related standards will be in building a web endowed with more meaning, some kind of artificial intelligence programs will be needed to understand context as humans do.

Although such programs can no doubt be constructed in Java or C#, these languages were not designed for such purposes. Herein lies an opportunity for languages designed with artificial intelligence specifically in mind. Such languages have existed for decades. The so-called functional language Lisp computes with symbolic expressions rather than numbers; the logical language Prolog works by making logical statements about objects.

Even though Lisp and Prolog may not be the shape of things to come, a programming language that incorporates concepts from artificial intelligence will no doubt appear when the time is ripe-and leave the likes of Java and C# by the wayside.

TECH TALK: Points To Ponder: Points To Ponder

Amy Wohl on the importance of Business Models:

In order for a business model to work, there must be a sense
of where the money is coming from, what it will be spent on,
and where and when revenues and profits will be achieved.
Setting priorities means getting these in the right order
and in the right relative magnitude.

Setting priorities means:

  • deciding what to spend money or other resources on and in what order
  • selecting a market segment and having the discipline to stay there from both a product perspective and a customer one
  • choosing a marketing mechanism and appropriate partners and sticking with them (unless it’s not working)
  • adding new things to the mix (product features, products, product lines, acquisitions, market segments, partners, etc.,only when earlier priorities have been satisfactorily accomplished or abandoned as no longer suitable

This is hard stuff. When things are going slowly it’s very
hard not to take on customers opportunistically even if they
don’t fit your focus and will take you away from your
plans — but you should. It’s even harder to have the
discipline to control spending to the plan when you see
competitors throwing money about madly and you have some in
the bank — but you’ll be happy you did when you make it to
the next milestone and they’re falling apart.

Peter Drucker on the impact of the Internet in Business 2.0:

The Internet has tremendous importance, but only marginal [economic] sizeThe Internet eliminates distance. That is its impact.Today, the Internet eliminates distance for communication. A client of mine, a major financial services company, moved 85 percent of its telephone customer service — calls from customers, such as “Where is my dividend check?” — from the Midwest to Bangalore. India has a large population of well-educated, English-speaking women. They go to school to get an American accent. You call from Milwaukee and don’t know whom you are talking to. If the question is not routine, she pushes a button and you are speaking to someone over here. As far as the customer is concerned, you have no idea where they are. The reason you go to India is not even the wage differential — you can’t get people in this country to do that terribly boring job.

The cultural impact of the Internet is far greater than the economic one. The important effect is on the middle classes in these half-developed countries. They don’t see themselves as part of their economy, but as part of the worldwide developed economy. This may be the next development: the emergence of psychologically global middle classes.

TECH TALK: Points To Ponder: Points To Ponder – II

This week, we have Something Different once again – a collection of on technology and management. I’ll be back with more of my own thoughts next week. (Read the first Points to Ponder series.)

Jack Welch on Passion in his autobiography, “Jack: Straight from the Gut”:
Whenever I went to Crotonville and asked a class what qualities define an “A player”, it always made me happiest to see the first hand go up and say, “Passion.” For me, intensity covers a lot of sins. If there’s one characteristic all winners share, it’s that they care more than anyone else. No detail is too small to sweat or too large to dream. Over the years, I’ve looked for this characteristic in the leader’s we selected. It doesn’t mean loud or flamboyant. It’s something that comes from deep within. Great organizations can ignite passion.

Dan Bricklin in his article “Natural-Born Entrepreneur” in Harvard Business Review (September 2001):
Even with good training and strong motivation, being a successful entrepreneur is tricky. You have to live with having control and not having control at the same time. It’s like this: In big business, when you need to cross a river, you simply design a bridge, build it, and march right across. But in a small venture, you must climb the rocks. You don’t know where each step will take you, but you do know the general direction you are moving in. If you make a mistake, you get wet. If your calculations are wrong, you have to inch your way back to safety and find a different route. And, as you jump from tock to slippery rock, you have to like the feeling.

Uday Kotak, Vice-Chairman, Kotak Mahindra Finance Ltd:
Follow your ambitions, even if they appear to be unreasonable. Because, only an unreasonable person has the chance to excel and succeed, as reasonable person always believes in adapting to the world. Reasonable persons generally adapt to the world, instead of trying to conquer the world. But unreasonable persons force the world to adapt to their needs and end up conquering the world. Thus, success goes only to the unreasonable, ambitious, and not to the reasonable, realistic.

From a presentation by General Colin Powell on Leadership:
Don’t be buffaloed by experts and elites. Experts often possess more data than judgment. Elites can become so inbred that they produce hemophiliacs who bleed to death as soon as they are nicked by the real world. Small companies and start-ups don’t have the time for analytically detached experts. They don’t have the money to subsidize lofty elites, either. The president answers the phone and drives the truck when necessary; everyone on the payroll visibly produces and contributes to bottom-line results or they’re history. But as companies get bigger, they often forget who “brought them to the dance”: things like all-hands involvement, egalitarianism, informality, market intimacy, daring, risk, speed, agility. Policies that emanate from ivory towers often have an adverse impact on the people out in the field who are fighting the wars or bringing in the revenues. Real leaders are vigilant, and combative, in the face of these trends.

TECH TALK: The New War: A Time for Indian Tech Companies To Look Ahead and Beyond

Times just got more challenging for everyone – individuals, companies and countries. The future looks grim. Stock markets have got battered all over the worldwide – at one point, the Indian markets touched an 8-week low, having fallen by over 15% since September 11. The talk is now of an almost-certain global recession. For Indian software services companies, so dependent on an already-slowing US market for business, the events of the past week can only make matters worse with increasing bench strengths (employees not deployed on revenue-generating projects).

As entrepreneurs (and in some sense, we all are), one has to be optimistic and look at how to convert these near-term challenges into long-term opportunities. This is the time for real leadership. An excerpt from a presentation on Leadership by General Colin Powell:

Perpetual optimism is a force multiplier. The ripple effect of a leader’s enthusiasm and optimism is awesome. So is the impact of cynicism and pessimism. Leaders who whine and blame engender those same behaviors among their colleagues. I am not talking about stoically accepting organizational stupidity and performance incompetence with a “what, me worry?” smile. I am talking about a gung-ho attitude that says “we can change things here, we can achieve awesome goals, we can be the best.” Spare me the grim litany of the realist,” give me the unrealistic aspirations of the optimist any day.

So, what can Indian companies, especially those in the IT sector, do in the present situation?

We need to build for the future. The opportunities of tomorrow do not go away. One needs to look beyond the next couple of years. There is a New Internet being created, which opens up a vast array of opportunities. A recent article in Forbes ASAP by Michael S. Malone talks about the convergence of developments in optics, semiconductors and real-time enterprise computing software which will enable the creation of the “Great Global Grid”. Writes Malone:

The Internet isn’t dead–it’s molting. And what will come out of the
chrysalis will be gigantic. Once again, let history be our
guide. Every important digital technology over the past 50 years has
seen an initial explosion of entrepreneurial activity, followed by a
90%-plus shakeout of the competitors (although only a small dip in
revenues).

But what is generally forgotten is that after the shakeout,
the few remaining survivors enjoy exponential growth. Within a couple
of years they are joined by a new generation of savvier young
competitors. Meanwhile, over the subsequent two decades, the industry
itself typically grows 100 times bigger.

Mountains of money, an entrepreneurial resurgence, a new generation of processors, severe overcapacity of cable, broadband, viable e-commerce models, important new core technologies in hardware and software, and a breakout in IT. We’ve seen such conjunctions before–in 1958, 1970, 1976, and 1996–and each (the integrated circuit, the microprocessor, the PC, and the Web) set off an explosion that reverberated throughout the world.

Had you been looking closely at the converging curves of business, money, and semiconductor technology, you would have seen the microprocessor coming as early as 1968, even if you couldn’t have predicted the Intel 4004. We can do the same now for the convergence of 2004-2005, and give it a name – Internet II: The Great Global Grid.

Can we create products and technologies which can position Indian companies at the heart of this New Internet? This will require not just entrepreneurs to take the plunge (or re-position their existing businesses), but also Indian venture capitalists to stop shying away from early-stage investments. Many of the Indian software companies are also extremely cash-rich (the top companies have cash in excess of USD 100 million) and continually generating cash from operations. So, can the next Microsoft come from India?

Like the way the US and its allies have united, Indian companies and entrepreneurs need to come together to leverage the opportunities. If we can imagine a world beyond the next two years, there are manifold opportunities. But they cannot be captured by a single company alone. What is needed is a coalition to take advantage of the opportunities and magnify the efforts of single companies. In that context, perhaps, the right question to ask in not if the next Microsoft can come from India, but can the Indian IT companies create a pool of companies that match the likes (and clout) of their current day counterparts in the US. India has the talent and the money. What is needed is the vision to imagine a different future.

TECH TALK: The New War: What India Can Learn from the US

Minutes after the aircraft hit the second World Trade Center tower, President George W. Bush was on national (and international television) talking about the incident. Besides the President, many senior US administration officials have been on TV on a regular basis to update everyone on what has been happening. This helps prevent rumours and speculation, and more importantly, gives confidence to the people watching that there is someone in charge and rallies them towards a common cause.

If there is one thing that comes out watching the aftermath of the attacks in the US, it is that of the need for immediate, clear and extensive communications. This is one area which India has been lacking in.

India has had two serious “foreign affairs” crises in the past few years: the hijacking of IC-184 to ironically, Kandahar in Afghanistan, and the Kargil War. Most recently, we had the India-Pakistan summit in Agra, which was very much in the full glare of the media. In every case, we had a public relations and communications disaster.

Writes Shekhar Gupta in the Indian Express:

Governments screw up all the time and democracies are most imperfect. But the Americans have now shown you how a government of real systems, laws and experience gets its act together. Unlike us during Agra, Kandahar, Kargil, this one is not hiding from the media. Nor is it speaking selectively to certain journalists or channels, answering a few questions, and hoping the rest of the media would pick it up.

Another learning from the events of the past week has been the bipartisanship among the Republicans and the Democrats in the US. The Congress and Senate met and approved not just aid of USD 40 billion towards the rebuilding effort, but also the use of military force. There was not a single dissenting voice. The whole nation, led by its leaders, has rallied about the President. This is the political maturity that Indian leaders need to learn.

What did we do after the Tehelka expose? We demanded and got the resignation of our Defence Minister, George Fernandes, one of the abler people in the Union Cabinet. As citizens, we need to learn a lot from the way Americans have handled this crisis. Shekhar Gupta once again:

Contrast the trademark shrillness of our public response with the understated dignity of the Americans. There is no public outcry to go bomb somebody – here, both during Kargil and Kandahar, public opinion was like a lynch mob, cross the LoC, carpet bomb something, sort this problem out “once and forever”.In the US, no one of any consequence has said a word against Islam or the Arabs, there is no clamour for instant revenge.

As we watch TV and the images unfold in front of us, it is time to do some thinking about what we as a nation can learn from America. Crises and disasters are not under our control. How we respond is.

TECH TALK: The New War: A View from India (Part 2)

Death and disaster are not uncommon. This year, two disasters – one natural and one man-made – have brought it closer to all of us. The Gujarat earthquake was the first one in which we all seemed to know someone who died. Now, in the World Trade Centre and Pentagon bombings, we all know of a fellow citizen, an innocent brother, sister or friend, who perished.

The unfolding tragedy of the past week also brought into sharp focus the importance of the Visual. Pictures, especially live pictures, shock and numb. It did not matter where you were. Geography and national borders meant little. As long as you were in front of a television set, the pictures were identical everywhere in the world. India had seen this for the first time during the Gulf War a decade ago (that is when cable television took off).

If television fed the hunger for knowing what was happening now, the newspapers and the Internet supplemented the hunger for more information and opinion. Telephones, especially cellphones, along with email and Instant Messaging bridged loved ones and friends.

As the week wore on, it became clear that modern day technology has become so good and accessible that at times it can be frightening.

The flight simulators gave a near-perfect experience of what it is like to fly.
Forging passports and identities is easier to do now than ever before. Perhaps, the Internet too helped the terrorists communicate. Our national defences have become more and more high-tech, but the methods of our wars and enemies have changed. Monitoring and intelligence systems too will now need to.

I used to complain about the security checks at Indian airports. Only passengers are allowed in the terminals – family and friends have to bid goodbye from the crowded outside. Carry-on baggage is x-rayed once, and then opened for another check just before boarding. Passengers are frisked twice. Checked in baggage needs to be identified prior to boarding. Being a frequent traveller, this seemed too elaborate and time-consuming a process. I am never again to complain about this process again.

If anything, more modern systems like face-recognition or biometrics need to be deployed. This is the engineering and technological challenge: how can we make the world a safer place, and yet not take away the freedom of movement and right to privacy?

TECH TALK: The New War: A View from India

The world changed on September 11. Innocent people from all across the world, including an estimated 250 Indians, were killed by the senseless actions of a group of terrorists. The events in New York and Washington were broadcast in real-time around the world. Suddenly, the horror of what was happening was visible in all our homes – in real-time. There was now a new enemy, a new war – one unlike what the world has faced before. This time around, the war is going to be different, because one will not know when it is over.

Sitting in Mumbai, one may have been physically far away from New York and Washington. But as the developments unfolded, it became clear that India is not going to be far away from the next battleground. Pakistan is at the centre of attention, and the possible link as the US plans a retaliation against terrorist targets in Afghanistan. The future is uncertain. The enemy we are all dealing with is one that is prepared to die and kill civilians. The next new thing now is fear.

Terrorism was at the heart of the discussion when the Indian Prime Minister Atal Behari Vajpayee met with Pakistani President Pervez Musharraf in Agra recently. Terrorism knows no borders. It is what India has been fighting in Kashmir for the past many years, and what few countries in the world have acknowledged. These regional battles, like sparks, should have been contained and extinguished but were allowed to spread.

This war is one that impacts every country, every society in the world. Every community has good people and bad people. A global network of terrorists exploits the bad people to hurt the good people. Terrorism has no favourites. A past friend can be a future enemy. India discovered this when Rajiv Gandhi was killed by an LTTE suicide bomber in 1991. We have seen it now in Afghanistan.

The next war is not going to a high-tech war. All the combinations of smart missiles and other weapons will not get rid of the enemy. Unlike previous wars, this one is not with a state or a government. It is right versus wrong, good versus evil. It is a crusade that has to be fought on the ground, and in the hearts and minds of people everywhere. Countries and people now have to make their choices – are they with the good or with the bad. There is no middle road, no abstentions, no neutrality in this war.

TECH TALK: Disruptive Technologies: Email + IM + SMS

Email, Instant Messaging (IM) and Short Message Service (SMS) are the triad of communications. Email gives a universal address and provides a message store. Instant Messaging provides real-time communications, and information on presence. SMS, also known as Text Messaging, offers reachability through a personal device (cellphone) for a low cost. The common thread running through all three is “messaging”.

Each of the three applications have become very popular but for different reasons. Email is great for aysnc communications, being able to send rich text (attachments), send easily to a group of people, keep an organized record of the communications (in folders), and increasingly be able to interact through HTML forms. Email also suffers from spam, because anyone can send me email at my address. IM is good for quick short messages with others who I know are online. IM is now also getting extended to support multimedia. SMS has become very popular for person-to-person communication, but has a difficult typing interface, a small display and limits message size to a few words.

So far, all the three applications have worked independently. There has been no integration between them. The result has been the presence of three namespaces and three different interfaces: one needs to remember an email address (which is likely to be present in the address book of the email client/server), the IM IDs present in the buddy lists of the non-interoperable IM programs, and the cell numbers which are present in the phone book on the cellphone.

Email, IM and SMS have become killer applications in their own way. The two big networks we use are the Internet and the Cellphone network. Yet, there has been very little integration between the three apps or the two networks. This gap between the fixed and the mobile networks needs to be bridged. The combination of the small computing device, the radio, and IP protocol provides a platform for information and services anywhere.

Imagine a system which does the following:

  • Provides a single contact address, integrated with the corporate mailbox
  • Offers a single message, synced store
  • Tells us when our buddies are online when we check email received from them
  • Forwards messages in brief on the cellphone immediately
  • Enables us to control/filter messages through a “communications portal”
  • Works with all email clients, all cellphones
  • Has a common address book
  • Integrates with our desktop calendar and sends alerts to the cellphone
  • Allows for quick interactive access to specific info on websites through IM, SMS
  • Keeps a copy (archives) of all our communications and allows search on them
  • Can work with existing mail platforms (Exchange, Notes) and all GSM operators
  • Is programmable and extendable by developers (or even end-users)
  • Uses the latest technologies of Web Services (XML, SOAP, WSDL, UDDI)
  • Has adapters to enterprise applications

    This has the potential to be disruptive to the way we communicate and access information, especially combined with the proliferation of low-cost wireless data devices. Combining Email, IM and SMS bridges the gap between from the desktop to the wireless networks. Presence Management and Interactive Agents are going to play a key role in the new always-on world, with the mailbox at the heart of universal communications.

TECH TALK: Disruptive Technologies: SMS

The Short Messaging Service (SMS) revolution is an unlikely one: the cellphone keypad is inadequate for typing the message length is short (no more than 160 characters). And yet, it has captured the imagination of cellphone users unlike anything else. While on the one hand there are optimistic forecasts of the 3G services, the success of SMS has proved that it is impossible to predict what users want and will use. For most cell operators, SMS services have ben an after-thought. Today, SMS represents about 3-5% of revenues worldwide. The biggest success has been Philippines at an incredible 22% of revenues. According to Ovum, income from text messaging is expected to reach USD 18.9bn this year or about 4.7% of total revenues of US$400bn.

A recent report by Merrill Lynch on Mobile Data identifies the key factors for the success of SMS:

Adoption by the youth segment: The youth market is an early adopter and helps build scale and mass acceptance of new services.

Pre-paid services: Pre-paids lower the cost of entry and help build scale for SMS services.

Affordable service: The cost of messaging is significantly cheaper than per minute mobile calls and even when compared to paging, thus encouraging high volume usage.

Common GSM platform: Given the larger base of subscribers, new services such as long-distance roaming could be developed.

Interoperability: Interoperability has been a proven driver of messaging growth. In the UK, after interoperability was available in April 1999, SMS traffic increased seven-fold.

Calling Party Pays (CPP): CPP encourages use of messaging as users do not have to pay for incoming messages. In the US, two-way billing has slowed messaging as the receiver has to pay for receiving messages. CPP does not translate to lower revenues as incoming messages stimulate response and more traffic.

Wide diversity of services: With a common platform and large subscriber base, a large variety of services have been developed, the most popular of which are consumer applications such as simple person-to-person messaging, notifications of voice and fax mail, unified messaging, ringtones, chat, information services, mobile banking and payment, and National and international roaming.

SMS gross profit of about 90%: Margins on messaging are usually very high as there are low variable costs and these almost fall directly in the bottom-line.

90% of SMS is still person-to-person. The power of SMS can get magnified if combined with IM. An extract from Pulver’s report:

The next big ‘thing,’ exploiting the potential of wireless networks together with text messaging, is called WIM – Wireless IM, or MIM – Mobile IM. It is a hybrid of IM and SMS, possessing attributes of both. So, how will IM and SMS features be merged in Mobile IM:

  • SMS has a store-forward capability, so sending messages is possible even when the recipient is not ON. The user gets notified when there is a message waiting, as with Voicemail.
  • Presence improves the user experience, knowing when a recipient is available. What’s more, choosing name from recipient list, instead of a number, is far more intuitive.
  • IM accommodates multi-party chats. Voice networks find it hard to bridge several parties, and the radio bandwidth is a limiting factor for multiple sessions reaching the handset. It is yet to be seen whether multi-party Voice conferences can be accommodated before true 3G networks are in place.
  • But the most interesting part of this is that the interworking between Internet IM on PCs and IM on mobile devices marks a true convergence. This will connect not only anyone with a mobile phone, but also any PC user who can be associated with a telephone number.

SMS and IM are two options for real-time communications. Let us now integrate it with the third pillar: email.

TECH TALK: Disruptive Technologies: IM and SMS

The popularity of Instant Messaging (IM) and Short Message Service (SMS) fulfill our most basic need – communications. They are both the unexpected “killer apps” on the Internet and on GSM Cellphones, respectively. Both have been adopted by teenagers in large numbers, and are only now moving into the enterprise.

IM technology consist of two parts – Presence and Buddy Lists. Presence indicates online/offline status, and availability. Buddy Lists allow users to control who can communicate with them. IM has taken off in popularity because unlike email, its instantaneous. It is just like having a conversation. It also allows multi-tasking, since one could do doing various things on the computer between sending IM messages. IM helps bridge people together in real-time. Writes Mark Chediak in Red Herring on Instant Messaging:

IM applications let users exchange text messages and files in real time over the Internet. They have gained popularity because they’re often quicker and easier to use than email or the phone. International Data Corporation, a research firm, predicts the number of global corporate IM users will increase more than tenfold over the next three years, from 18.4 million this year to 229.2 million in 2005. And the amount companies pay for IM is expected to grow from $133 million this year to $1.1 billion by 2005.

Presence technology is what has the potential to make IM disruptive. Presence allows us to find and contact people in real-time. Email goes into a mailbox, and a telephone call can go into a voice mailbox. They both do not guarantee communication with the person we want to talk with. Only IM does it.

IM is morphing from a person-to-person communications tool into an information access tool. An example is ActiveBuddy. Write John Borland and Stefanie Olsen in News.com (April 25, 2001):

ActiveBuddy is putting a new twist on an old idea of bots or “intelligent agents”–small pieces of software that can act more or less independently of direct human control. The service meshes the “chatterbots” that have populated the Net for decades, badly mimicking human conversation, with the database searching functions of an ordinary portal such as Yahoo’s My Yahoo service. To consumers, the ActiveBuddy tool appears as just another name on a “buddy” list of one of the various IM providers. But on the other end of the buddy is a computer rather than a person.

A recognition of the importance of Instant Messaging is Microsoft’s decision to integrate Windows Messenger into Windows XP. Innovation in IM has just begun. One way to enhance its power is to combine it with SMS and Email.

TECH TALK: Disruptive Technologies: Handheld Computers (Part 2)

The first generation of handheld computers failed. Remember Apple Newton? Then, along came Palm. With a focus on doing a few things well and working more like an information organiser, Palm created the industry. Wrote David Pogue in The New York Times (December 14, 2000):

From the day it was born in 1996, the PalmPilot has been a slender reed resisting the winds of complexity. Electronics stores refused to stock it; who would buy a gizmo that did little more than suck in the address book and calendar from your PC? Venture capitalists implored Palm Computing to add features. “It needs a modem!” “A voice recorder! Color screen! Upholstery attachments!”

Fortunately, the designers at Palm were worshippers in the church of simplicity. As a result, their pocket-size creation became one of the most successful inventions in history, with nearly 10 million sold in four years.

Palm was followed by Handspring, Compaq (with its iPaq), Sony, and others. Research In Motion focused on the enterprise through its always-on Blackberry (which integrates with the corporate mailbox) and carved out a niche for itself.

A new generation of companies like Cybiko and Danger is targeting
consumers with a range of lower-cost, connected wireless
devices. Within the enterprise, handhelds are finding their niches (an
example is the most recent announcement of Palm and Siebel teaming up
to offer mobile CRM solutions). Palm also offers the ability to view
and edit MS-Office files, and later sync them with the files on the
desktop. The innovations in handhelds are happening along two fronts:

adding more features and functionality within the device (the
Springboard add-on module in the Handspring can convert it into an MP3
player, a cellphone and many other things), and enabling connectivity
through wireless networks.

There are two ways to look at the new handhelds: as possible PC replacements (which is highly unlikely at this time), or as adjuncts to PC (which is how they get used most of the time). The possible PC replacement capability is what has the potential to make handheld computers disruptive. But it is not going to happen in the developed countries of the world.

There is a whole world of people out there who have not been touched by computing. The installed base of computers in India is less than 6 million for a population of 1 billion. For these people, the low-cost, connected handheld can become the primary computing device. Witness the rapid adoption rate of cellphones in many of these markets (growth rates in excess of 50% per annum). What is needed is localisation (ability to support different languages) and voice as an input medium. These handheld computers can then be plugged into the computing grid through wireless networks to use all the resources of processing power and storage that they need.

Thus, for handhelds to be truly disruptive, they need to target a new market – people who have never used computers. Creating content, applications and services for this market can become an industry as big as the PC industry itself. After all, there are 4 billion people in the “rest of the world”. The real personal computing revolution lies ahead.

TECH TALK: Disruptive Technologies: Handheld Computers

In the early 1980s, the then new desktop computers (“personal computers”) were seen by the makers of the minicomputers as toys. These “toys” became more and powerful with every passing year and finally signalled the end of the reign of the minicomputers. In today’s era, the handhelds (Personal Digital Assistants or PDAs as they are called) are much like toys compared to the PCs. And, more interestingly, they actually are “personal”. The pace of innovation in handheld computers is packing in more power and more features. Wireless networks are ensuring that they are always connected and ready to receive data. Integration of cellphone circuitry makes some of them able to work as smart phones.

In contrast, PCs, with an installed base of over 500 million, have become boring. The innovations have slowed even though the Wintel (Windows+Intel) combine keeps up the pace of new products. We have Pentium 4 and Windows XP being released, hoping to boost slowing sales. But for the customer, there is no longer the urge to go and upgrade to the newest model. Penetrations in countries like the US have already reached near-saturation levels. In countries like India, where the growth rates are still good, cost continues to be a major consideration. The only market where PC growth is powering ahead is China. The industry which for two decades has captured our imagination unlike anything else is waiting for the next big thing.

Walter Mossberg’s comments in the Wall Street Journal (December 28, 2000) ring true:

The PC, which has carried the digital revolution for 24 years, has matured into something boring — a costly commodity already possessed by most of the households in the U.S. that can afford one. And while it is being replaced, or complemented, by a new wave of cheaper and friendlier digital appliances, those devices still are in the development stage, so they can’t take up the slack caused by the PC slump.

In other words, the digital world is in a transition, and there’s no way to tell how long it’ll last. There’s a strong future on the other end of that transition, but it will be a bumpy ride getting there.

The PC has peaked as the sole device capable of doing digital things. It will gradually get repositioned as a tool mainly used by content creators, programmers and power users.

For everybody else, the next decade will bring an array of simpler digital devices — wireless and wired, handheld and deskbound — to take over many popular functions now performed by PCs.

TECH TALK: Disruptive Technologies: Software Utility – Opportunity for India

Software as a Utility makes a lot of business sense for small and medium-sized companies, especially in emerging markets like India. Most of these companies have not used much software other than an accounting package, email and the MS-Office suite (most likely, a pirated copy). What these businesses need is an integrated eBusiness suite of applications at an affordable price point. The only way this can be done is by delivering software as a subscription service.

This is how disruptive technologies emerge. They target a new, low-end market and then make their way upwards. The initial market needs to, in the words of Clay Christensen, “be delighted with a crummy product.” This is exactly what software can do for these businesses. They can now become more efficient by using software for their business processes and automate tasks they would do manually. These businesses can serve as the starting point for a new generation of enterprise software companies.

Craig Baity of the Gartner Group elaborates on the opportunity for India (in a recent panel discussion organized by Business Today):

India has potential is Applications Software Packaging. You are great at developing software, but there isn’t one Indian software brand in the world. Last time I was here, I met some cement companies. It turned out that they had what they believed to be one of the world’s only applications for managing the supply chain for that industry. They had an application that was helping them shift cement from one end of the country to another, and they had a data-centre employing 2,000-3,000 people supporting the application. Why couldn’t they work on packaging and branding it and selling it to companies that can’t afford Oracle and Informix and SAP, which is most of Asia by the way.

There is another interesting element at play here: Microsoft’s new licencing policies. Faced with a market reluctant to go in for new upgrades, Microsoft has modified its pricing and licencing terms for its new products. This means that most organizations (Microsoft’s existing customer base) will end up paying much more for Microsoft products in the coming years. According to Meta Group, “Aggressive pricing and licensing changes for use of Microsoft Windows 2000 on servers are driving customers and competitors alike to seek an alternative. In the past six months, we have encountered a strong wave of user animosity toward Microsoft in the wake of server pricing changes to its Client Access License.”

The question, therefore, from the perspective of markets like India is: will software companies like Microsoft price their products differently in emerging markets? Just as many books (especially, text books) are available in India at much cheaper prices, will software companies do price discrimination? I don’t think so. Books available at lower price points in India are restricted for sale outside the country. Even though it is theoretically possible to buy books in India and ship them elsewhere, the cost of shipping becomes prohibitive.

Unlike the atoms of books, software is bits. For bits to be bought and shipped through the Internet is much easier (remember Napster?). Software companies will not do anything that can cause a negative impact on their earnings from their primary markets – North America, Western Europe and Japan. This makes me believe that software pricing will remain uniform worldwide.

This creates the opportunity for lower-priced software, which is initially targeted at the emerging markets, to make inroads at the low-end of the market. The Internet is the distribution medium, and the software can be offered as a service, reducing packaging costs. Marketing and Branding still need to be done, and therein lies perhaps the bigger challenge. But for Indian companies looking at an opening to build a global brand in software, the timing couldn’t possibly be better.

TECH TALK: Disruptive Technologies: The Software Utility (Part 2)

That the software business model is going to change is clear. Writes Ray Lane, a partner at venture-capital firm Kleiner Perkins, in Strategy+Business:

The software industry’s economic model makes no sense. First, applications are built on proprietary standards, which prevent separate programs from working together and make upgrades costly. Second, applications are sold through indirect channels and direct sales forces, an approach that boosts marketing expenses and doesn’t use the Internet as a low-cost distribution channel. The model is a serious obstacle to innovation – of every dollar paid for software, 50 to 60 cents covers the vendor’s sales and marketing costs, whereas only about 15 cents goes into RD to create better products.

The Internet is shaking up this model. Through digital delivery, software developers will activate new application features on customers’ servers, rather than require customers to replace an old version with a new one across multiple IT systems. Developers can sell software as a service, greatly lowering the costs of software distribution and increasing operating efficiency. No longer burdened with installation duties, customers can focus on how to use new features to transform their operationsWith the Internet-enabled model, software makers could upgrade applications at any time and deliver them immediately.

The new world of Web Services is helping accelerate the shift in how software is going to be delivered, and creating new opportunities. This is India’s best opportunity for creating a global software brand. Linux can be the platform, and the software delivered through the Internet, built on protocols like XML, SOAP, WSDL and UDDI. Writes Jon Udell in Linux Magazine (June 2001):

As the Web evolves from a collection of pages into a cloud of services, Linux’s future as a major platform seems assured. Web services, expressed in terms of the SOAP protocol, are inherently open. Microsoft will naturally want people to use only its own HailStorm services to store and manage identities, personal information, and the like, but there’s nothing to stop anyone else from creating equivalent services.

To interact with these Web services, users will require new kinds of client software. Consider messaging and personal information management. Our e-mail clients and PIMs, which have changed remarkably little over the last 10 or 15 years, serve us poorly. Do you know anyone who isn’t suffering from e-mail overload or calendar confusion? Now imagine what happens when we start sharing these communication channels with a swarm of Web services. We’re going to need applications that real people — not just geeks — can use to filter information effectively, sign and encrypt messages, index and locate documents, collaborate on group projects, and delegate access to data and services.

TECH TALK: Disruptive Technologies: The Software Utility

The information complexity in the world is increasing. Thanks to the Internet, there is more information available than ever before – both at the consumer level and in enterprises. Writes Andreas Stavropoulos in News.com (August 21, 2001):

The world of information they are asked to manage is becoming more complex all the time. For one, handheld and mobile devices proliferate; whether they’re hanging from our belts or tucked in a coat pocket, chances are most of us have come to depend on cell phones, PDAs and an assortment of “smart” gadgets to keep us plugged in to the information flow.

For another, the velocity of information has greatly increased as new software packages and, more importantly, new business processes are implemented to cope with real-time data availability. The challenge of maintaining such real-time information views–that is, ones that are complete, current and consistent across different IT systems–is significant: It often requires a major overhaul or rebuilding of a business’s information infrastructure.

At the same time, the “walls” of enterprises are falling: Software-enabled horizontal and vertical intra-enterprise collaboration cuts across traditional functional silos. Business partners, sellers and customers are allowed selective access and control over the enterprise’s resources, linked by collaborative commerce, supply-chain optimization, applications, and so on.

While Blade Servers are enabling the creation of the computational utility, Web Services are helping build out the software utility. The first step towards this is the Application Service Provider (ASP) who offers software on subscription rather than a large upfront payment. ASPs bring down the entry barrier in terms of cost and deployment time by offering a standardised, one-size-fits-all product.

This change is illustrated by Adobe’s decision to use SalesForce.com for its sales force. Says Business Week (August 27, 2001):

Late last year, when the economic ice storm howled into Silicon Valley, software maker Adobe Systems Inc. had been toying with the idea of buying a $10 million system for managing its sales operations. Instead, to hold down costs, it signed up with an Internet company, Salesforce.com Inc., which provides 200 salespeople with up-to-the-minute information about their customers and sales activities via any Web browser. The cost: a mere $50 per person per month. Setup time: a couple of days. “It was something we could use immediately and very inexpensively,” says Bruce R. Chizen, Adobe’s chief executive.

TECH TALK: Disruptive Technologies: The Tech Utility – Blade Servers (Part 2)

Server design is undergoing a change. Write Stephen Shankland and Michael Kanellos (News.com, February 28, 2001):

IBM, Hewlett-Packard, Compaq, Dell Computer, Sun Microsystems and others already sell servers just 1.75 inches thick, similar to the thickness of a standard pizza box. The measurement is known as 1U. Right now, a rack can hold 42 1U servers, each in its own enclosure, sitting horizontally. In the future, a rack of the same height will be able to hold hundreds of ultradense servers–basically exposed motherboards stacked vertically in groups inside enclosures that are each several Us high.

For years, server designers focused on boosting the power of single servers by increasing the number of CPUs, squeezing every last iota of performance out of software and pushing to restrict crashes to less than five minutes a year. But with the arrival of the Internet, companies have decided to fill racks with dozens of less powerful machines to accommodate immense amounts of Web traffic.

Initially, these superskinny servers will be full-featured designs like today’s models. But later, the devices will be blown apart into separate components, IBM and Intel say. The philosophy will resemble stereo components, in which different boxes handle different tasks–only instead of different modules for CD players and tuners, there will be different boxes for CPUs, storage and network communications.

A blade server combines CPU, storage, input/output, and some routing to create a
generic processing unit. Writes Andy Gibbs:

Blade design, sometimes called ultradense or hyperdense, may turn into an ideal option for Web serving and other processing-light and transaction-heavy applications.

A design benefit of these blade systems is that they use a specialized high-speed bus to connect the series of exposed motherboards – it’s like plugging in oversized expansion cards. These headless servers can maintain fast, rock solid
communications at gigabit speeds with each other via their interconnection bus, and also can be managed better.

There are no cables coming from each server because all of its communications are sent and received through the special bus, allowing racks to be really cleaned up and organized. Some systems need as few as six cables for a fully loaded rack when connected to power, storage, and the network.

This new generation of servers will provide disruptive to many existing companies. Writes Milunovich of Merrill Lynch:

If web centers and blade servers are the future of computing, almost every enterprise vendor could be affected. Enterprise winners are determined by where commoditization occurs and where margins reside. Our analysts argue that there are no longer independent server, storage, software, and networking segments or business models. Web centers and blade servers bring consolidation to the physical level.

As with many other disruptive technologies, the innovation is being driven by start-ups like Egenera, RLX Technologies, Scalant and Fiber Cycle.

TECH TALK: Disruptive Technologies: The Tech Utility – Blade Servers

Servers have become the heart of the Internet, and Data Centres, which house these servers, have become the new “power centres”. The wheel has turned a full circle: the Internet has brought back centralised computing. Computers and people are all connected in the viral economy. Writes Steve MacLaughlin:

Companies are more interconnected than ever before. They react faster than ever before. They possess more access to information than ever before. They communicate with suppliers and customers faster than ever before. The downside of these advances? When companies get sick it spreads that much faster to everyone they touch. Welcome to the viral economy.

Making this connectivity possible are the server arrays. Server technology has been moving incrementally in the past few years. Now, a radical new design called “blade servers” is hoping to make a big improvement in being able to pack computing power more densely to optimise space utilisation and power consumption, and also increase manageability and scalability.

Steve Milunovich of Merrill Lynch says that the bottleneck on the Internet today is due to slow servers (a US-centric viewpoint). He provides a perspective on the need for a new Internet plumbing architecture.

We believe the Internet build-out will drive technology for the next 5-10 years. The focus has been on network infrastructure, but we believe effective systems must be balanced end-to-end. The network has been getting most of the investment; we think servers will be next. In fact, with millions of users performing billions of discrete transactions that require parallel databases, a new data center architecture is needed.

The dominant computing model is shifting to network-centric computing. This wave is about building out the Internet plumbing. Sun says that today’s Internet connects 100 million people, but tomorrow’s could connect as many as 1 trillion people and devices. That much activity at the edge requires a substantial infrastructure investment in the center. Our conclusion is that the data center must turn into a web center.

We think the web center will be where next-generation corporate and consumer applications run. The complex mesh of VPN-secured, massively parallel, Internet-enabled, n-tiered software requires operationally friendly processing centers. New hardware and software architectures will be likely needed for these web centers to be maintainable.

Because broadband utilization is less than 5%, the long haul will not be a problem. The bottleneck could become servers and storage thanks to new applications such as video attachments and Voice over IP. Once broadband gets rolled out and the Global 00 webify, increased investment in servers should follow. Microsoft senior researcher and Turing Award winner Jim Gray says that even today the World Wide Wait is caused by slow servers, not network congestion.