25 Years of Technology

InfoWorld has a special report, summarising the past thus:

1979 – 1985: The Dawn of the PC – Personal computers meet the enterprise

1986 – 1995: The Networked Enterprise – LAN, Ethernet, Lotus Notes, Windows 95, and a connected workforce

1996 – 1999: The Internet Era – What a lovely bubble it was

2000 – 2003: The Age of (In)Security – Grappling with worms, viruses, and a devastating terrorist attack

It also looks ahead to the next 25 years:
– The path to pervasive computing
– Computers that mimic intelligence
– The invisible workforce: IT in the future
– After silicon: Biocomputing at work

John Battelle’s 2004 Predictions

Among the 2004 predictions by John Battelle, a few stand out:

The Web becomes a platform (again). Thanks to commerce and service APIs, RSS, and the ubiquitous interface of search, geeks around the world are again leveraging the web as a platform for cool new tools. 2004 will be the year these tools break out in something of a pre-cambrian explosion, reminiscent of the Mac in late 1980s, or CD-ROM in the early 90s. Only cooler. Examples: Grokker, Bloglines, Amazon API.

Along those lines (and no surprise to this readership, but still and all…), blog ecologies of like-minded folks will garner increasing cultural and social power. We’ve seen this happen first in the technology and media space, and recently politics has figured it out too. 2004 will see the rest of the world join in, especially in natural communities where power is projected: think professional verticals of finance, law, medicine, marketing. Folks who you never thought would ever blog will be coming online and claiming power. As a result, more blog ecologies will impose registration and/or subscription (the money kind, not the RSS kind…).

Second generation blog/RSS aggregation sites will come close to combining directory functions with LinkedIn- and recommendation-engine-like features – think Amazon+Yahoo for the blogosphere….

Howard Dean and the Internet

Wired has a story on how “the Internet invented Dean”. Some of the lessons:

– Make the network stupid: “The network should be as simple as possible, with advanced functionality and intelligence moved out to its edges. For the Dean campaign, this means that hundreds of independent groups are organizing with very little direction from headquarters.”

– Let the ants do the work: “Because the entire Dean system is densely linked, the distant work of all the local groups feeds back into the campaign.”

– Leaders are places: “Dean’s network made it easy for his supporters to vote in the MoveOn poll, while offering MoveOn members an opportunity to influence the Democratic race, even if their own state’s primary was irrelevant. Participation, not policy, was key.”

– Links attract links: “Barabsi gives a formal model for what everybody already knows: Popularity breeds more popularity; links are made most quickly to Web sites that have the most links…The most important thing to notice about Barabsi’s model is that the advantage of arriving early and offering adequate or superior fitness increases exponentially over time.”

– Allow the ends to connect: “Local Dean groups are not obsessed with passing their messages to the candidate. They are busy talking among themselves.”

There’s definitely a lot we can learn from the way the Dean campaign has aggregated technology and people – they’ve created a new “political platform”, which is genuinely of the people, for the people, and by the people.

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Apple and Innovation

Fast Company attempts to answer the question we all have about Apple: “The battle over digital music is just another verse in Apple’s sad song: This astonishingly imaginative company keeps getting muscled out of markets it creates. So what does Apple have to tell us about innovation?”

Almost everyone agrees that Apple’s products are not only trailblazers but also easier to use, often more powerful, and always more elegant than those of its rivals. Yet those rivals have followed its creative leads and snatched for themselves the profits and scale that continually elude Apple’s grasp.

All of which raises some interesting questions. If Apple is really the brains of the industry–if its products are so much better than Microsoft’s or Dell’s or IBM’s or Hewlett-Packard’s–then why is the company so damned small?

That Apple has been frozen out time and again suggests that its problems go far beyond individual strategic missteps. Jobs may have unwittingly put his finger on what’s wrong during his keynote speech earlier that day in Paris. “Innovate,” he bellowed from the stage. “That’s what we do.” He’s right–and that’s the trouble. For most of its existence, Apple has devoted itself single-mindedly, religiously, to innovation.

With such examples as Apple in mind, a number of skeptics are beginning to ask whether our heedless reverence for innovation is blinding us to its limits, misuse, and risks. It’s possible, they say, to innovate pointlessly, to choose the wrong model for innovation, and to pursue innovation at the expense of other virtues that are at least as important to lasting business success, such as consistency and follow-through. When it comes to economic value, Schumpeter’s creative destruction may have an evil twin: destructive creation.

James Andrews, of the Boston Consulting Group, for example, argues that too many companies presume that they can boost profits merely by fostering creativity. “To be a truly innovative company is not just coming up with great new ideas, or products and services,” he says. “It is coming up with ones than generate enough cash to cover your costs and reward your shareholders.”

Andrews says companies can boost the odds of their success by choosing the most appropriate of three innovation models. The first and most traditional is the integrator model, in which a company assumes res-ponsibility for the entire innovation process from start to finish, including the design, manufacture, and sale of a new technology. In general, large, well-heeled companies–Intel, for example–do best with this model. Second is the orchestrator approach, in which functions such as design are kept in-house, while others, including manufacturing or marketing, are handed off to a strategic partner. This model works best when speed is of the essence, or if a company wants to limit its investment. When Porsche couldn’t meet demand for its popular Boxster sports coupe in 1997, for example, it turned to Finnish manufacturer Valmet rather than open another costly plant. Finally, Andrews says, there’s the licensor approach, in which, for example, a software company licenses a new operating system to a series of PC manufacturers to ensure that its product gets the widest distribution at the lowest possible investment cost. That’s you, Microsoft.

From the beginning, Apple appears to have employed the integrator approach–the model with both the highest costs and highest risks.

At the heart of Apple’s innovation conundrum also lies a powerful cultural bias: the lionization of purely technical innovation. Ours is a material society. So it’s natural that when we think of innovation, we are more inclined to think of objects, things that we can see, touch, and feel, and of inventors such as the Wright brothers and Thomas Edison. It turns out, though, that the most economically valuable forms of innovation often aren’t the tangible kind. Instead, they are forms of innovation that we might belittle as less heroic, less glamorous: the innovation of business models.

In virtually any industry, business-model innovators rather than technical innovators have reaped the greatest rewards in recent decades, argues Gary Hamel, the chairman of Strategos, an international consulting company that focuses on helping businesses innovate successfully. Hamel points to Amazon, eBay, and JetBlue. Each company either delivered goods and services differently (by bringing distribution of books or secondhand goods to the Web) or more cheaply (by becoming a sort of Wal-Mart of the skies). Dell has done both.

There’s one last essential element to successful innovation that has often been missing at Apple: follow-through. As Howard Anderson, founder of both the consulting firm Yankee Group and the Boston-based venture capital firm Battery Ventures, puts it, “Innovation isn’t the key to economic growth. Management is the key to economic growth.” In practice, that means supporting product innovation with such things as a solid sales force, a strategy for collaborating with developers and makers of complementary products, and a strategy for customer ser-vice. “Companies that rely too heavily on creativity flame out,” Anderson says. “In many ways, execution is more important. Apple is innovative, but Dell executes.”

Forbes looks ahead to 2004

Forbes editors and writers look ahead:

Quentin Hardy: “For all the focus on big companies and large themes like on-demand computing, small companies will flourish.”

Arik Hesseldahl: “Gateway, Hewlett-Packard or one of the other big PC retailers will buy an established brand name in the consumer electronics business.”

Rich Karlgaard: “For the first time in years, it will be fun to be a CIO in a large company.”

Stephen Manes: “When it comes to security, Microsoft’s wares are so utterly hopeless that hackers and spammers will maintain the upper hand.”

Penelope Patsuris: “The race to pack digital cameras into ever-smaller shiny metal packages will wind down. Credit-card sized cameras won’t go away, but look for photography’s digerati to start beefing up more than the megapixel count.”

Bruce Upbin: “I see a great unplugging coming. People are drowning in data trying to keep up with their digital selves.”

TECH TALK: 2003-04: Offshoring, VoIP

4. Offshoring

Even as the economies of the developed countries like the US recover, what is becoming clear is that it is a jobless recovery. Even as productivity reaches record levels, many jobs in services are migrating to lower cost countries. What China did to manufacturing in the 1990s, India is now doing to services. Offshoring has become the new word added to the vocabulary of CEOs hungry to cut costs.

Offshoring is not new. Call centres have been there in Ireland and Philippines for many years. Indian software companies have been providing outsourced countries for the better part of the last decade. What is new this time is that the shift is beyond answering phones and emails. Just as Y2K herald the coming of age of Indian software companies, the current slowdown in much of the developed world and the pressure to reduce costs is working well for countries like India. Aided by the Internet and high-speed telecom networks, enterprises are shifting business processes to countries with a lower cost base. From the early days of medical transcription to the current outsourcing of accounting, finance and legal functions, offshoring is moving up the value chain.

The impact of offshoring is at the economic core of the US. Wrote Business Week in an article on the rise of India: This deep source of low-cost, high-IQ, English-speaking brainpower may soon have a more far-reaching impact on the U.S. than China. Manufacturing — China’s strength — accounts for just 14% of U.S. output and 11% of jobs. India’s forte is services — which make up 60% of the U.S. economy and employ two-thirds of its workers. And Indian knowledge workers are making their way up the New Economy food chain, mastering tasks requiring analysis, marketing acumen, and creativity.

This trend is also causing heartburn and a backlash in some sections of the developed world. While there may be some limited (and largely unsuccessful) efforts to protect jobs in local communities, what is clear is that the offshoring is going to cause a fundamental rethink of education and training systems in the US.

2004: Offshoring will continue and accelerate. While India will be the biggest beneficiary, other countries in the Asian and East European regions will aim to catch up.

5. VoIP

In one momentous week in early December, Time Warner Cable, Qwest and AT&T all announced plans to offer voice-over-IP services. Wrote News.com: The announcements signal a major turnaround in VoIP attitudes among phone service providers, who initially worried that all-you-can-eat pricing for Internet calls would undercut traditional long-distance service. Competitor Verizon Communications has said it plans to begin Internet phone services in early 2004, while SBC Communications is still conducting tests. VoIP has reached a tipping point.

Among one of the disrupters in this space is Skype, a p2p telephony service that allows users to make free phone calls over the Internet. Think of it as the Napster for telecom. Another innovator is Vonage. What is clear is that VoIP is yet another cold technology which reduces the overall cost of doing business.

2004: It will be interesting to see the combination of VoIP with WiFi and smartphones. Many new business applications centred around VoIP will come to the fore.

Tomorrow: Search, Linux

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