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BUS. Std: The Net Will Change

September 8th, 2004 · No Comments

My latest column in Business Standard:

The Internet as we know it is about 10 years old. It has had its share of ups and downs during this period. As we look ahead, the Internet that we currently use is going to be fundamentally transformed by an assortment of new technologies and business models. These will have far-reaching implications for us in India in both our personal and professional lives.

The Internet’s impact has been rather limited in India in its first decade. Yes, we have about 8-10 million Internet connections and 20+ million users. But there are more who use cellphones. Applications and services on the Internet have also been surprisingly slow to develop, hobbled by lack of imagination, venture capital and business models. The connectivity situation (low speed, high cost, and intermittently reliable) has not helped.

As we look ahead, a number of developments offer promise of an Internet platform which could be as good as the best in the world. We have yet another opportunity to leapfrog. (Considering that we don’t normally do things when they should be done, attempting to leapfrog is always a good option!) A positive feedback cycle can be created by low-cost access devices, affordable broadband connections, relevant applications and value-enhancing services. There is a need for co-ordinated action across multiple industries to realise this future.

So, what does the New and Next Internet portend? What are its characteristics?

Always-on: We are moving in India from a pay-per-use pricing model to a flat rate subscription model (in some cases, with download limits). But the instant availability of the Internet connection will fundamentally change the way we use the Internet everything now becomes a few clicks and a few seconds away.

Ubiquitous: As data networks envelop us, the Internet will become pervasive. Already, the presence of cellular networks provides computer users the ability to connect from anywhere. In the coming years, technologies like WiMax and mesh wireless will blanket much of urban and semi-urban India.

High-speed: The narrowband speeds that we are used to will give away to higher speeds as real broadband makes its way to the mainstream. The world wide wait will be a thing of the past. What this will do is encourage the use of more media-rich content.

On-demand: As connectivity improves, there will be little difference between online and offline. If it is out there, it is instantly available. This will lead to the rise of centralised services especially for business applications. We will have control over when we want entertainment delivered.

Multi-format: The computer will no longer be the only device accessing the Internet. Smartphones with wireless data networks will provide equally viable alternatives. This means that there will be two screen footprints that content providers will need to cater to.

Two-way: The growth of weblogs is a harbinger of the publish-subscribe Internet. Readers and surfers will have the ability to participate in the content creation process. Cellphones with cameras can turn device owners into content producers.

Personalised: The Internet will also become more individualised as websites (especially search engines and portals) build up increasingly sophisticated profiles based on what we do. This will enable highly targeted advertising.

Not Free: This new Internet will not be built around the free access model that we have been used to. The eyeballs-centric business model is a thing of the past. As we find content and services of value, we are more likely to start to pay for them.

This New Internet will make possible path-breaking applications and services. From voice-over-IP which will allow phone calls anywhere in the country for a flat fee to video-on-demand which can provide education and entertainment to users when they want it, from software-as-a-service for businesses to automate all their processes to multi-player gaming platforms which will transform leisure time, the New Internet will create new opportunities as well as threaten conventional business models. It will force players in computing, entertainment, consumer electronics and entertainment to tread into each other’s territories.

We are already seeing early services which are building around these new attributes in the US and some other countries: Apples iTunes music store sells music and could as easily be extended to other DRM (digital rights management) content, Google has fundamentally changed the online advertising business, Starbucks complements its coffee blends with Wi-Fi hotspots, Chinas online games have transcended piracy, Salesforce.com has signalled the rebirth of the application service provider (ASP) business, TiVo timeshifts television and will soon offer movie downloads, Vonage offers flat-rate unlimited calling plans over IP networks, cable companies offer a bundled triple play service combining cable, telephony and Internet access.

India, too, will experience many of these disruptive innovations sooner than we can currently imagine. The New and Next Internet is the harbinger of change and turmoil. It creates opportunities and threats. It is time that we start thinking and building for tomorrow. Because someone somewhere might be doing just that.

Tags: Bus. Std. (ICE World) Column

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