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Economist IT Survey

October 29th, 2004 · No Comments

The Economist writes that “the next thing in technology is not just big but truly huge: the conquest of complexity.”

Steven Milunovich, an analyst at Merrill Lynch, another bank, offers a further reason why simplicity is only now becoming a big issue. He argues that the IT industry progresses in 15-year waves. In the first wave, during the 1970s and early 1980s, companies installed big mainframe computers; in the second wave, they put in PCs that were hooked up to server computers in the basement; and in the third wave, which is breaking now, they are beginning to connect every gadget that employees might use, from hand-held computers to mobile phones, to the internet.

The mainframe era, says Mr Milunovich, was dominated by proprietary technology (above all, IBM’s), used mostly to automate the back offices of companies, so the number of people actually working with it was small. In the PC era, de facto standards (ie, Microsoft’s) ruled, and technology was used for word processors and spreadsheets to make companies’ front offices more productive, so the number of people using technology multiplied tenfold. And in the internet era, Mr Milunovich says, de jure standards (those agreed on by industry consortia) are taking over, and every single employee will be expected to use technology, resulting in another tenfold increase in numbers.

Moreover, the boundaries between office, car and home will become increasingly blurred and will eventually disappear altogether. In rich countries, virtually the entire population will be expected to be permanently connected to the internet, both as employees and as consumers. This will at last make IT pervasive and ubiquitous, like electricity or telephones before it, so the emphasis will shift towards making gadgets and networks simple to use.

UBS’s Mr [Pip] Coburn adds a demographic observation. Today, he says, some 70% of the world’s population are analogues, who are terrified by technology, and for whom the pain of technology is not just the time it takes to figure out new gadgets but the pain of feeling stupid at each moment along the way. Another 15% are digital immigrants, typically thirty-somethings who adopted technology as young adults; and the other 15% are digital natives, teenagers and young adults who have never known and cannot imagine life without IM (instant messaging, in case you are an analogue). But a decade from now, Mr Coburn says, virtually the entire population will be digital natives or immigrants, as the ageing analogues convert to avoid social isolation. Once again, the needs of these converts point to a hugely increased demand for simplicity.

The question is whether this sort of technology can ever become simple, and if so, how. This survey will analyse the causes of technological complexity both for firms and for consumers, evaluate the main efforts toward simplification by IT and telecom vendors today, and consider what the growing demands for simplicity mean for these industries.

Tags: Software

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