Death of the Phone Network

Dana Blankenhorn writes that within five years, there will be no such thing as a phone network anymore.

There will only be data. Voice is a low-grade data service. Every service provided by the voice network can be emulated through software.

Clue one. AT&T has stopped marketing long distance voice.

Clue two. Skype now serves regular phones through agreements with four backhaul carriers.

Out of such Clues are grand predictions made.

With voice pushed onto the Internet the bandwidth devoted on phone lines to voice can be put to better use, increasing local bandwidth to 8 mbps or more. This is absolutely necessary if the phone carriers are to compete against the current onslaught of cable modem and coming onslaught of Wireless ISP competition.

1,000,000,000 PCs by 2010

News.com writes that the present base of 600 million users will grow to a billion by 2010, ” fueled primarily by new adopters in developing nations such as China, Russia and India.”

Selling computers to people in these countries, however, won’t be easy. Poverty, unreliable energy supplies, a multiplicity of languages, regional laws and education levels are all potentially major obstacles. And they could all get more daunting, rather than easier to manage, as time goes on.

“The problem isn’t with the first billion, but the second or third billion,” said Roger Kay, an analyst at IDC.

To penetrate these markets, companies are creating the sort of nation-building programs more often associated with organizations like the U.S. Agency for International Development (USAID) and the United Nations. Microsoft, for example, has set up an initiative called the Local Economic Development Program for Software, in which company employees advise government officials on building tech programs at local universities, intellectual-property laws and other issues. Brazil is one of eight countries in the program.

Designing products to be cheaper is also an issue. Hewlett-Packard’s 441 system is an early attempt to grapple with the price and management issues. Introduced in South Africa, the computer features four keyboards with mice and monitors so that four different people–in a variety of the local languages–can work simultaneously. The Linux-based computer may get introduced to Southeast Asia later.

If technology can be seeded in a national economy, the gross domestic product will grow and in turn lead to future customers, said Maureen Conway, vice president of emerging market solutions at HP.

“But you’ve got to start the cycle somewhere,” Conway said. “The low-cost access device is critical to product development.”

Consider the following. By 2010, every one of today’s PCs will also be replaced/upgraded. And if we can get the price points of PCs down to that of cellphones (along with a subscription model), we can do another 500 million. That’s a total opportunity of 1.5 billion computing devices in the next 6 years.

Tech for Road Warriors

WSJ writes about 10 technologies for mobile workers:

1. Laptop PCs
2. Tablet PCs
3. Smart Phones
4. Wireless Internet Phones
5. Portable Printers
6. Power To Go
7. GPS
8. Badge Computing
9. Roadside Support
10. Off-Hour Diversions

The Myth of Disruptive Technology

John Dvorak has a counterpoint on Clay Christensen’s ideas on disruptive innovations:

There is no such thing as a disruptive technology. There are inventions and new ideas, many of which fail while others succeed. That’s it. This concept only services venture capitalists who need a new term for the PowerPoint show to sucker investors.

One could almost make an argument for Linux as a disruptive technology. It’s free, so that helps. But what is it disrupting? Microsoft? In 1992, when Linux was invented, Microsoft had about $2.2 billion in the bank. Now Microsoft has over $70 billion in the bank and continues to grow. Some disruption.

One problem in our society is the increasing popularity of false-premise concepts that are blindly used for decision making. The amount of money squandered during the dot-com era because of “paradigm shifts” and “new economies” is staggering. People actually believed that all retailing would be online and that all groceries would be delivered to the home as they were in the 1920s, despite changes that make delivery impractical. Who cares about reality? We have a disruptive technology at work!

The concept of disruptive technology is not the only daft idea floating around to be lapped up obediently by the business community. There are others. But the way these dingbat bromides go unchallenged makes you wonder whether anyone can think independently anymore.

Scoble defines disruptive technology: “A technology that no one in business wants but that goes on to be a trillion-dollar industry.”

TECH TALK: A Tale of Two Summers: Bridging Two Worlds

My thinking this summer was very similar to what I had been thinking in 1994, when I wanted a new way to reach Indians worldwide. Then, I used the Internet as a distribution platform. Now, I needed to do the same. Then, I focused on delivering news and information to an audience with their own computers and connectivity. Now, I was seeking to deliver the basic utility of computing to an audience which had no computers and no connectivity.

What struck me was how similar and yet so different the two worlds were. Go back to 1994 and the pre-Internet era. We communicated largely by phone and fax. Phone calls were still quite expensive I remember paying $2-3 per minute to call India from the US during peak hours. It was an era of writing long letters home every Sunday. With friends at universities, talk meant a Unix program which would split the screen into two and each of us could then see what the other was typing. Computers in India were limited to the real upper end. India software service companies had just started to make their mark somewhat in the US. Cellphones were the privilege of a few in the US.

The world of 2004 is awash in computers globally. More than the computer, it is the cellphone which has become the device we hold dearest to us. Even as 180 million computers will be bought this year, nearly 600 million cellphones will be purchased globally. Voice-over-IP threatens the very existence of the telecom companies in the US. Call rates between India and the US have dropped to single digit rupees per minute. Letter-writing has been replaced by IM and video chatting almost every day between families separated by distance. The Internet has made available information on our fingertips. At least some parts of India in 2004 is shining and rising. Finally, the buying power of the 200+ million Indian middle class market is there to be seen.

And yet, the device that has been at the heart of the productivity revolution the digital hand, as James Cortada puts it is barely visible across India. With an installed base of 10 million (albeit growing now at 3-4 million per annum), computers are still the preserve of a few. Even where there are used, their full potential is not exploited. Computers, instead of being windows to different worlds, have become just keyholes to a static view. This is because the deep back-ends that computers need have yet to be developed in India. A mix of high dollar-based costs, lack of connectivity, missing applications and disappearing margins have minimised the impact that computing has had.

1994 needs to be bridged with 2004. Computing and the Internet need to be married to create a new platform which can make the power of a connected computer accessible to every family, student and employee. Starting in 1994, the Internet helped bridge the information gap between Indians abroad and India. Beginning in 2004, we need to bridge the digital divide that pervades India. Ten years may have elapsed between the two summers, but the building blocks for the next revolution are very similar.

Tomorrow: A Personal View

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