Small is beautiful, again?
“Almost all economists agree that technological progress drives long-term economic growth (…) it is now clear that the decreasing cost of computer hardware and software dramatically increased the role of information technology in the economy during the 1990s, even though IT spending represented only 3 percent of GDP (…) IT probably accounts for almost all the growth in productivity in the boom of the 1990s, and it is still perking right along.”
Read David Rotman’s “Can Technology Save the Economy” on MIT’s Technology Review.
David’s article captures the current debate on the need for fostering investments in both R&D and the deployment and consumption of new technologies as well as the role of private investors and public subsidies.
This is discussed in the context of today’s economic vulnerability leading to scarce investments, tight credit, conservative markets and, last but not least, this year’s U.S. Stimulus Bill, which provides $787 billion for technology, energy and R&D spending.
The “new economy” from the late 90s was perceived to enable limitless growth. The apparent death of the business cycle also changed how risk was perceived. “Irrational exuberance” in the form of reckless financial instruments coupled with a faulty regulatory environment yielded today’s crisis. Though James Cooper is reporting significant improvements in the U.S. economy:
- stocks are up 39% from March’s lows, yet 40% down from October’s peak;
- banks are attracting investors and showing a stronger capital base and liquidity.
So, one could think that deficit spending in the form of bail outs and stimulus bills does the trick, at least in the short term. But, it should be noted that this version of the “new economy” implied borrowing from the world’s markets and that China has become the wealthiest country on earth thanks to it’s $2.3 trillion in foreign reserves.
The U.S. remains the home of about half of the world’s 34 mega-companies (down from last year’s 63) with a market capitalization over $100 billion (see this week’s print issue of BusinessWeek.) We have learned that large companies happen to be too big to fail at the tax payer’s expense. So, in this context small is beautiful again:
“This crisis is not just the trough of a cycle, but the end of an era (… ) what we have discovered in the past nine months are growing diseconomies of scale. Bigger firms are harder to run on cash flow alone, so they need more debt (…) have to place bigger bets but have less and less control over distribution and competition in an increasingly diverse marketplace.” Chris Anderson’s “New New Economy.”
Circling back to the role of IT, or ICT for that matter, this time around this is not just about the decreasing cost, but the upward and downward scalability of computing infrastructure on demand, which is enabling smaller firms to be faster to market while saving themselves from budgeting fixed costs (capex.)
This means spending your “data center money” on need basis as an operating expense, while extending the useful life of many of today’s PCs and laptops. So, the emergence of cloud computing appears to be just what the doctor recommended.
Related posts:
- Is cheap the new black?
- ICT’s behavior in economic downturn and recoveries
- Can you be bullish in a bearish market? (1) (2) (3) (4) (5) (6) (7) (8)
- Entrepreneurship and innovation (1) (2) (3)
- Innovation and the role of government (1) (2) (3) (4) (5) (6) (7)
- Business model innovation
- BCG’s 2009 study on innovation
- The state of European innovation
J. de Francisco blogging from Chicago on June 28
Mobility: is cheap the new black?
“This shift is a social experiment, a managerial challenge, and a financial necessity (…) by the spring of 2008, the financial world seemed to be coming underdone, unemployment was rising, and among the fashionistas, cheap was the new black (…) it was the time to create a more youthful energy for the brand (…) it required a mind shift (…) we took the view that the world will forever be different, and we need to acclimate ourselves.”
Read Susan Berfield’s article, “Coach’s New Bag,” on BusinessWeek.
You can get an HP netbook running Windows XP from Verizon for just about $200, Apple’s iPhone “S” from AT&T for $99 or pick up a Peek at Target for $15…
Note that with this kind of gear I don’t need to get myself to the nearest coffee shop to get on WiFi. So, I am also grinding my own coffee at home to save some pennies. By the way, this month’s issue of Harvard Business Review reports that “functional MRI scans show that coffee activates parts of the brain that help focus attention on tasks at hand an it appears to offer some small protection against Type 2 diabetes, gallstones, and Parkinson’s disease.”
Getting back to the subject of this post, this new wave of affordable mobile devices is reflecting the fact that “computers don’t need to be stuffed with the latest whizz-bang technology if they have a high speed connection to the cloud of services available online (…) It is this combination of connectivity and and cloud computing that makes notebooks and their successors so disruptive” as read on The Economist’s “Small But Disruptive.”
Here is a quick glossary to help put the above into context:
- netbooks: low-cost small-form-factor laptops, some of which can be acquired for free from network operators when bundled with two year cellular data plans;
- smartphones: “smarter” phones doubling as mobile computing devices, the iPhone being a popular example, and even tripling as wireless modems when hooked up to laptops;
- data centric devices: you might have read some of my posts on Amazon’s Kindle, so this time around I’ll feature Peek’s mobile email for the masses as an example, see below video;
- 2.0 services: mostly online and interactive stuff, which we experience over an Internet browser and widgets relying on much of the heavy lifting being done by the servers your device connects to;
- cloud computing: versatile and on demand infrastructure that not only speeds up but also lowers the cost of providing 2.0 services; these are computing resources offered as a public utility;
- mobile broadband: ubiquitous high speed access to the Internet over cellular networks.
Related posts:
- Mobile Operator Smartpipes & Applications: (1); (2)
- Cloud Slam 2009 (1); (2); (3) ; (4) ; (5) ; (6) ; (7)
- Emerging Communications 2009 (1); (2); (3)
- twitter’s search for a business case
- 2.0 companies leverage 2.0 technologies
- open cloud manifesto
J. de Francisco blogging from Chicago on June 21
Innovation Interrupted (2)
“Innovation is a messy process – hard to measure and hard to manage. Most people recognize it only when it generates a surge in growth (…) Many companies allow left-brain analytic types to approve ideas at various stages of the innovation process. That is a cardinal error.”
Read “Innovation in Turbulent Times” by Darrel K. Rigby, Kara Gruver, and James Allen on Harvard Business Review.
The above article talks about “both brain partnerships” by which right brain (creative types) and left brain (pragmatic) leaders join efforts to bring to market new products and services that make a difference. This subject was also briefly addressed by an article published by The Economist on entrepreneurship. Here are some famous examples:
- HP’s Bill Hewlett and David Packard;
- Apple’s Steve Jobs and Steve Wozniak and, most recently, Tim Cook;
- Procter & Gamble’s A.G. Lafley and Chief of Global Design Claudia Kotchka;
- Microsoft’s Bill Gates and Paul Allen;
- Virgin’s Richard Branson and Simon Draper;
- Ben & Jerry’s Ben Cohen and Jerry Greenfield;
- Nike’s Bill Bowermann and Phil Knight;
- Starbucks’ Howard Schultz and Orin Smith;
- Calvin Klein and Barry Schwartz.
Nonetheless, it takes more than a matchmaking exercise to get this kind of partnerships to drive innovation. One well known example is what happened between Steve Jobs and John Sculley:
It should be noted that one person can make a difference. Alpha individuals are charismatic, motivated and competitive people interested in shaping things and some of them happen to be “both brain individuals.”
Those would be the equivalent to ambidextrous people who cultivate broad interests: “renaissance men and women” whose creativeness, analytical and problem solving skills help them innovate. However, there aren’t many and, in any case, we live in a sophisticated and fast changing world which is best addressed by working in teams.
Studies on emotional design and social intelligence point to the fact that there is more to success than drive, expertise and experience. Moreover, for the past few years, research papers on management practices and innovation are uncovering how well intentioned processes thought out to streamline operations and improve quality can end up killing good ideas and stifle breakthrough innovations while encouraging bad projects.
- “If you don’t have highly creative people in positions of real authority, you won’t get innovation.”
- “It isn’t just innovation in the usual sense of products and patents that fashion companies pursue. Their creative people typically image a whole picture and see every innovation as part of a whole.”
Related posts:
- Innovation Interrupted (1)
- Entrepreneurship and Innovation (1)
- Entrepreneurship and Innovation (2)
- Entrepreneurship and Innovation (3)
- Emerging Technologies 2009 (1)
- Emerging Technologies 2009 (2)
J. de Francisco blogging from Chicago on June 14
My take away from “innovation interrupted”
“There’s growing evidence that the innovation shortfall of the past decade is not only real but might also have contributed to today’s financial crisis (…) the information technology revolution is worth cheering about, but it isn’t sufficient by itself to sustain strong growth (…) if an innovation boom were truly happening, it would likely push up stock prices for companies in such leading-edge sectors (…) instead [they dropped] (…) [and] venture capital have more less stagnated since 2001.”
Read Michael Mandel’s “Innovation Interrupted” on BusinessWeek.
Michael’s article talks about a decade of disappointments, innovation wise, and how that relates to the economic downturn: “with far fewer breakthrough products than expected, Americans had little new to sell to the rest of the world.” So, exports plateau at 11% of GDP and imports kept growing disproportionately.
After reading this article, one would conclude that process and incremental product innovations are not good enough to keep things moving. These become table stake strategies with fast following global competitors closing the gap sooner than ever before. Moreover, once there, they proceed to move up the value chain and, in some cases, even supersede those once thought as the perennial powerhouses.
If that’s the case, there is a need for going beyond thinking of productivity in terms of incremental performance improvements to also consider what is it that we can do today that we couldn’t do before.
Launching new products that leapfrog the current state of affairs remains a source of wealth generation and a competitive advantage. But, what really maters is if your company’s strategy properly addresses:
- spotting and investing in winning technologies early on;
- accelerating the path to commercialization to win the first customer and then to achieve scale;
- adjacent market opportunities and/or unexpected applications worth capitalizing on;
- becoming a serial innovator and sustaining a leadership position.
J. de Francisco blogging from Chicago on June 8
Mobile Operator Smart Pipes And Applications (2)
“Before Apple’s smooth-talker, portable broadband didn’t look juicy enough to chase- cellular data usage was slim. But the typical iPhone owner uses five times more data than the average cell user. It took Apple and its ecosystem of apps and interactivity to prove the pent-up demand for ubiquitous broadband (…) LTE will offer about the same DSL-ish speed (5-6 Mbps), but bitrates could grow to 15 Mbps by 2012.”
Cliff Kuang’s “Why isn’t wireless Internet access available everywhere yet?” on Wired.
“Although many users assume that smart phones such as the iPhone are responsible for congestion on the 3G network, much of the data growth actually comes from laptop users with data cards or USB dongles, or netbooks with built-in cellular modems. On average, a single laptop generates as much traffic as 15 smart phones — as much traffic as 450 regular phones (Source: Informa)”
Michael Coward’s “Bringing Deep Packet Inspection (DPI) into Wireless Networks” on Wireless Design & Development.
Related post: Mobile Operator Smartpipes &Applications (1)
At MOSP&A we heard from OFCOM that mobility will soon account for more than half of the revenues generated in the telecommunications market. This comes with a growing appetite for innovative services beyond just voice. The value chain is morphing accordingly.
One of the recurrent subjects discussed at this conference was an apparent disconnect between application developers and network operators in terms of standardization and cross-carrier application enablement. Developers stated that they are finding proxies to leverage location information and even billing systems from third parties which might not be the ones supported by the mobile operators. But, when creating native clients, they are also facing the costs of “device fragmentation,” which I referred to in my previous post.
Operators’ application stores have direct access to users and are now seen as a key distribution channels. 70/30 appears to be the new magic ratio for revenue sharing agreements between operators (30%) and application developers (70%). While this is more advantageous to developers than past 40/60 and 50/50 splits, some voiced concerns about having to go through selected third party aggregators and/or publishers in some cases, thus further splitting that 70%. The impact of application certification costs were also part of debates on what it takes for developers to actually break even.
Since most would agree that “time is money” the need for speed was also talked about at Mobile Operator Smart Pipes & Applications: new apps should get to customers in “18 minutes and not in 18 months” as O2 put it. This was welcome news. O2’s Litmus is a marketing program that enables application developers to keep 100% of the intellectual property and collect revenues in 5 weeks instead of 90 days. Additionally, some benefit from funding from Telefonica’s venture arm. Equally important: early adopters and developers can engage in direct collaboration to foster innovation.
So, things are getting better and operators and developers are finding common grounds to innovate. However, as shared in my previous post, MEF’s Andrew Bud stated that “the cost of delivering the same data over a wireless network is 1000 times higher than over fixed networks.” The burning question really is whether by using more iPhone like devices, laptops and cheap netbooks, as well as more and more applications, widgets and mashups… we are putting network economics to the test and, therefore, scalability issues will end up pulling the rog from under the market.
The above chart comes from McKinsey & Company and was part of Alcatel-Lucent’s presentation (please see my disclaimer and disclosure below) which shows that “LTE” has been engineered to deliver higher bandwidth (horizontal axis) at a lower cost (vertical axis.) Just to put this into context: UMTS (3G) and HSPA (3.5G) are today’s wireless access technologies while LTE (4G) is often referred to as a next generation network. The acronym actually stands for Long Term Evolution:
- “LTE promise significantly higher throughput, improved reliability, and better coverage. So the idea of Web services as a foundation for mobile computing going forward isn’t a crazy idea at all — and I think it will become the norm over the next five years.” Craig Mathias’ “Mobilizing your enterprise applications.”
Hugh Griffiths of Microsoft mentioned that operators play a very important role in terms of the user experience and that they have already established an ongoing billing relationship with the end user, which the ecosystem can leverage. In my previous post I wrote about “competing on analytics” as one of the critical success factors. I’m bringing this up again because we also heard KPN openly sharing at this conference that it is challenging to generate revenue from some of the emerging business models. But… note that some of the speakers highlighted that what drives mobile operators to set up application stores is to attract and retain more users subscribing to data plans.
- “Lightspeed Venture Partners estimated that Apple had made only somewhere between $20 and $45 million dollars in revenue off of the App Store (…) Dan Frommer of Silicon Alley Insider has this exactly right: the App Store is one of the, if not the, key driver of two products that are very high margin: The iPhone and the iPod touch (…) no matter if its $50 million, $100 million or $200 million, that’s not a huge amount of money for a company that has nearly $30 billion in cash in the bank. But going forward, that number is only going to increase both as the platform expands and as in-app purchases come into play.” MG Siegler’s “About those iPhone App Store numbers“
Let’s recap:
- consumers and enterprise users are adopting better and more affordable mobile devices;
- operators and application developers are finding common grounds to innovate, both technically and business wise;
- the mobile browser starts to support many of the web technologies and cloud computing models;
- lightweight APIs (network, device, service) enable mash-ups and broaden the developer base;
- mobile operators are focusing on revenue projections from data plans;
- the mobile market is expected to account for more than 50% of telecommunication revenues.
Challenges:
- limited battery life;
- API standardization or lack of thereof (with pros & cons going both ways)
- needed investments to improve network economics;
- today’s turbulent macroeconomic environment.
Admittedly, I really think that things are coming together. So, the question is not “if” but “when.” I have more event notes and insights to go through and, therefore, will be blogging some more about this. In the meantime, I will continue to welcome your comments and emails on the subject.
Related posts:
- Mobile Operator Smartpipes & Applications: (1); (2)
- Cloud Slam 2009 (1); (2); (3) ; (4) ; (5) ; (6) ; (7)
- Emerging Communications 2009 (1); (2); (3)
- twitter’s search for a business case
- 2.0 companies leverage 2.0 technologies
- open cloud manifesto
Other bloggers worth checking out:
- Alan Quayle and his posts on MSP&A: Day One ; Day Two
- Claude Florin
- C. Enrique Ortiz
- Dan Appelquist
- Matt Millar
- Mike Rowehl
- Rudy de Waele
J. de Francisco blogging from Chicago on May 29
Mobile Smart Pipes And Applications – London, May 2009 (1)
“The term of “mobile 2.0″ can best be defined as the next generation of data services to mobile connected devices (…) knitting together Web 2.0 with the mobile platform to create something new: a new class of services that leverage mobility but are as easy to use and ubiquitous as the Web is today. These services point the way forward for the mobile data industry."
Read Dan Appelquist’s blog.
Event highlights:
Last week I attended Mobile Operator Smart Pipes & Applications in London, which I found quite interesting. I would suggest reading Alan Quayle’s notes (see links at the bottom of this post) to get the scoop on this two day conference. So, I will start this post with what many deem as key changes in the mobile broadband industry:
- leading network operators are exposing network resources and taking down past commercial and technical barriers to enable external developers to launch smarter applications and data centric services in weeks rather than years, O2’s Litmus being an example;
- infrastructure vendors are delivering next generation mobile broadband networks, smarter pipes which rely on end to end IP and pave the way for service & context aware architectures: see Alcatel-Lucent’s LTE;
- mobile developers benefit from lightweight development models that broaden the developer ecosystem while tapping into the operator’s marketing, distribution and billing muscles as part of a variety of partnering programs such as Orange’s;
- mobile browsers and widgets start to leverage web standards and aim to overcome today’s fragmentation in terms of devices, operating systems and networks; click here to read Vodafone’s insights and here to read about Opera’s new browser;
- device manufacturers are launching user friendly multimedia devices and providing developers with adequate resources, Apple’s iPhone being the reference model;
- content providers and advertisers are better understanding and meeting the requirements of the mobile user experience; MMA’s Mobile Advertising Guidelines;
- regulators discuss “innovation friendly” policies, specially when “less turns out to be more” in the end users’ best interest;
- service providers are working on transparent and straight forward pricing for mobile data and any related services; making relevant new services easily discoverable by means of application stores;
- end users are adopting new kinds of wirelessly connected devices and applications; note that many of these will not be subsidized and supported by network operators; Amazon’s Kindle was the most talked about reference;
- venture capital (known as risk capital in Europe) is taking advantage of the nascent mobile 2.0 industry for both consumer and enterprise markets as “wireless” is expected to become the leading means of consuming online services; see Jarvinian’s IT Mobility Initiative.
Critical success factors:
A- There is consensus on the need for making QoE a strategic priority as delivering on the mobile users’ quality of experience has become a source of value and differentiation. As a result, user centered design and human factors engineering are driving innovation as seen by the growing relevance of mobile usability practices and network & application engineering for QoE.
B- A venturesome environment and industry-wide innovativeness are also key. More so when it comes down to enabling mutually beneficial business models. The fact is that mobile broadband involves a complex value chain where no single player excels at delivering each component. So, understanding what’s at stake, industry dependencies, and shared risk taking are critical success factors. Some food for thought:
- Developers talk about the need for mitigating risks by enabling cross-carrier services beyond today’s voice and SMS.
- Moreover, many openly stated that there are alternatives to more than 80% of what operators can deliver by means of network APIs which, in any case, might end up being operator specific to developers’ dismay.
- OneAPI (network) and BONDI (device) aim to tackle the mobile fragmentation problem, saving developers from having to incur the cost of re-writing applications over and over.
- Mobile network operators are concerned about making substantial capital investments and long term commitments to broadband infrastructure if their networks’ destiny is to become dumb pipes.
- Some even claim that it’s hard to figure out how to make money out of these “experiments” while facing the paradox of declining margins in a fast growing market labeled by industry experts as the “next big thing.”
- Network operators are looking at cloud computing paradigms and are, therefore, assessing the merits of virtualized radio access networks. This goes beyond the passive sharing of basic cell sites to share active infrastructure such as BSS, base station subsystem.
- In this context, it is worth noticing that Andrew Bud, Chairman of the Mobile Entertainment Forum, highlighted that delivering the same data over wireless is 1000 times more costly than over fixed networks. Informa reports that laptop and netbook subscribers already account for more than 50% of mobile data usage and that a single laptop can generate the equivalent of traffic involving 15 smart phones.
C- Competing on analytics opens up new opportunities as telcos embrace 2.0 models. There are concerns about what regulators might and might not allow mobile operators to do with the data they collect. Having said that:
- Real time reporting and predictive analytics enable traffic and content delivery efficiencies over wireless networks, which would be hard to achieve otherwise.
- In a 2.0 world, analytics is not just about enabling a more efficient and effective execution, but about achieving a degree of service personalization that delivers value and makes a difference to the end user. If interested in the subject, I would suggest reading an article I published on Alcatel-Lucent’s Enriching Communications last year.
Mobilizing myself:
The above picture shows the OQO I took with me to London, which I used to:
- take notes at the event and check the websites presenters and panelists referred to,
- microblog on the spot via facebook updates,
- keep up with my email and checking voice mail,
- review and edit a couple of presentations,
- write this post that you are now reading…
all done thanks to web apps and a browser (Google’s Chrome) to illustrate the benefits of 2.0 services and cloud computing for people on the go. By the way, that OQO:
- runs Windows XP and can connect to WiFi and 3G networks;
- even though it comes with a sliding keyboard, my preference is to hook it up over Bluetooth to a handier foldable keyboard, which also fits in my pocket;
- once I’m back in my office, I plug a 22 inch flat screen;
- nonetheless, I can access any of the applications I talked about from any other computer if need to.
I like this configuration because it fits in my jacket’s pocket. Others MSP&A participants took netbooks with them instead. Mobile operators are making free netbooks available when enrolling in annual data plans.
The Mobile Enterprise:
Going back to MSP&A, we did not hear much about mobile applications for the enterprise. That prompted me to ask a couple of questions on that subject since:
- Enterprises are looking into mobilizing the workforce, this means mobile enabling corporate applications.
- IT managers are taking steps to move to private or public clouds where apps become software as a service.
- Enterprise services, such as portals, CRM and any business intelligence app for that matter, are becoming multimedia mash-ups.
The above trends are important to enterprises because:
- Mobilizing a company’s workforce is expected to rise productivity in measurable ways.
- Moving desktops and apps to data centers has become a cheaper, faster, and some would argue more secure IT strategy than continuing to roll out and maintain thick client software.
- Mash-ups further improve productivity as related data and media from different domains get rendered and refreshed in a meaningful fashion and at your finger tips.
This is relevant to the mobile industry since:
- Mobilizing a company’s workforce implies a sizeable customer base for mobile data plans and enterprise class services.
- When enterprise apps live in the cloud users access them via browsers, which relies on always-on connectivity.
- Capable browsers and widgets craft mash-ups that not only retrieve rich media but also open up a number of simultaneous connections to multiple servers which requires faster and smarter networks.
While vertical solutions that appeal to a specific industry are key, I do think that horizontal applications that are of value to most enterprises (e.g. CRM, customer relationship management, coupled with CEPB, communications enabled business process) might be the low hanging fruit as far as mobile broadband services is concerned.
Related posts at consultaglobal:
- Cloud Slam 2009 (1); (2); (3) ; (4) ; (5) ; (6) ; (7)
- Emerging Communications 2009 (1); (2); (3)
- twitter’s search for a business case
- 2.0 companies leverage 2.0 technologies
- open cloud manifesto
Other bloggers:
- Alan Quayle and his posts on MSP&A: Day One ; Day Two
- Claude Florin
- C. Enrique Ortiz
- Dan Appelquist
- Matt Millar
- Mike Rowehl
- Rudy de Waele
J. de Francisco blogging from Chicago on May 24
Social networks in a small global village
“Unlike the record-driven search tools of the past, the new people-tracking utilities build a highly detailed dossier about you solely from information that you published [or that others published about you] (…) aggregated identity is actually a new type of identity (…) a lot of people know that they have a public MySpace page; a lot of people know that they have a public Twitter album; but when combined, it’s not one plus one equals two: you actually create a new identity.”
Read JR Raphael’s article, “People Search Engines Tell Your Secrets,” on PCWorld.
Last month I was approached a few times to discuss the impact of social networks and shared media. My talking points usually start by addressing the “small global village” phenomenon as follows:
- the so-called “Global Village” implies that we can now relate and engage others anywhere provided Internet access;
- the notion of “Small Village” makes us think of closeness and the fact that everyone knows things about everyone else.
If you are a user of social networking and shared media services you happen to be subject to some of the social dynamics commonly attributed to small towns. Interestingly enough, many expose themselves (and unfortunately others) on social sites assuming that different behavioral rules apply or that their anonymity is somehow guaranteed.
My recommendation relies on proactively managing one’s online identity instead of letting the web generate an identity that might neither reflect your values nor how you would like to be perceived. In other words, learn to dress up and project your persona online:
- choose where you would like to be seen and with whom you would like to be associated;
- leverage the privacy settings of the online services that you happen to use and opt out when needed;
- if you are using social networking services just for fun: give yourself the benefit of thinking twice before posting anything;
- if you are using social networking services for business: publish what you think others should know about you as part of a subtle public relations campaign.
Note that the above advice is fairly different from that of others who would recommend limiting usage or not even getting started with social networks to begin with.
What escapes the “small village” metaphor is the issue of “identity theft” which takes advantage of the global nature of the web. This means that someone can pretend to be you without your knowledge, which is a serious crime. The main recommendation is that personal information needs to be safeguarded and that we need to develop a culture of security while taking advantage of what the web has to offer.
Related posts:
J. de Francisco blogging from Chicago on May 22
Emerging Technologies 2009 (2)
“Once you have decided that this is the right innovation wave, you must judge carefully when you will you go with it– before the peak, at the peak, after the peak? Perhaps you want to wait until almost the trough. Maybe you should take it easy and ride this one in on the plateau. Make an active decision based on your needs and circumstances (…) Don’t let hype dictate your timing decision.
Understanding that no one size fits all and that some make better use of a given technology than others, I would think that Gartner’s chart portrays the market’s perception on a variety of emerging information and communication technologies:
- the left half of the graphic deals with the rise and fall of specific technologies;
- the right half plots those which have become widely adopted and, eventually, mainstream technologies.
Note that at the left corner, Gartner has placed Erasable Paper Printing Systems which Xerox is currently developing. The use case seems to focus on reusing daily print outs. The other one is Context Delivery Architecture, CoDA, which Gartner relies on an architecture that makes services become aware of of the end user’s context (e.g. preferences, role, identity, presence, location) for the purpose of delivering the application and content that you need in a JIT, just-in-time, fashion. By the way, in the below interview, Mark shares that cloud computing is now at the peak of the hype cycle.
In this video he talks about how to make the most of the hype cycle to make technology decisions in today’s uncertain market environment.
Related posts:
J. de Francisco blogging from Chicago on May 12
Emerging Technologies 2009 (1)
I am currently reviewing last month’s issue of MIT’s Technology Review which showcases “10 Emerging Technologies.” The editors define emerging technologies as innovations which involve a paradigm shift and have a potential to change lives in years ahead. Here is the list, which I sorted out into three broad categories:
MEDICAL APPLICATIONS:
- $100 Genome – this innovation is positioned as key to personalized medicine: inexpensive sequencing technology able to deliver an entire human genome in about eight hours; this means that medical treatment would account for the patient’s distinct genetic profile, thus assisting the medical profession with diagnosis, prognosis and drugs.
- Paper Diagnostic Tests – squares of paper the size of postage stamps that can dipped into a urine or blood sample, so that depending on the chemicals happen to be present present, the paper changes colors to help diagnose a range of diseases quickly and cheaply; the production cost being estimated in the order of cents per unit.
- Nanopiezotronics - think nanoscale sensors that can be safely implanted as part medical treatments such as bone loss monitoring your joints or as part of wearable devices and your clothing’s fabric and hearing aids, just to name some examples.
COMPUTING:
- Racetrack Memory – nanowires are used to enable ultradense and rugged memory chips; the intent is to deliver three dimensional memory by implementing U shaped nanowires which are arranged in vertical position; as result, they can handle x100 times as much data while keeping production costs at competitive levels, which is key to future compact compact computing devices.
- HashCache - storing web content to make Internet access more affordable in the developing world based on a highly efficient method of caching frequently accessed web content on a local hard drive; this is being field tested in Ghana where a classroom equipped with commodity and even older PCs could store and cheaply access one terabyte of web data, which could handle today’s wikipedia; the technology will be licensed for free to nonprofits.
- Software Defined Networking – OpenFlow allows researchers to define data flows using software and set rules that tell switches and routers how to direct network traffic; this means remote control of network hardware that the researchers claim can help improve cellular networks to best handle network traffic when a user is moving.
- Intelligent Software Assistant – improving the way we search by deploying an engine that can complete tasks rather than just collecting and displaying lines of search results; an initial version is aimed at mobile users who can speak commands in casual language; this project takes advantage of trends such as the growing computing power of mobile phones and increasing speed of mobile networks.
- Biological Machines – think of cyborg devices such as remote controlled living bugs carrying miniaturized sensors and microelectrical mechanical systems (MEMs); the researchers’ goal is to create “biological machines” and sensor networks having already worked with controlled beetles.
ENERGY:
- Traveling Wave Reactor – making nuclear power safer and less expensive with reactors that require only a small mount of enriched fuel and leveraging liquid sodium as a coolant.
- Liquid Battery – storing solar power in batteries which would cost a third of today’s best models. The goal is to absorb large amounts of electricity at an affordable cost by using materials that allow for simple manufacturing.
You can access the above and other MIT Technology Review videos by clicking on this link.
J. de Francisco blogging from Chicago on May 11
Entrepreneurship and innovation (3)
“Gustavo Manso, assistant professor of finance at MIT’s Sloan School of Management, argues that [ pay per performance ] is not the rational way to encourage the innovation upon which our economy depends (…) Manso asserts that, among businesses on experimentation for innovation, incentives that don’t penalize failure and promote long-term success lead to more innovative business strategies than fixed-wage or pay-for-performance incentives. “
Read Thomas Claburn’s article, “Pay-For-Performance Compensation Limits Innovation,” on InformationWeek.
“Reinventing Your Business Model” was published by HBR at the end of last year. Clayton M. Christensen is one of the co-authors who advises corporations to watch for disruptive technologies and to stay ahead in the game by raising the performance of their products and services while investing in emerging firms at the leading edge. One other conclusion is that there is a better chance for an incumbent to capitalize on a disruptive technology when creating independent units to that effect.
Opposed to expecting existing ones to quickly change their ways. My recollection is that Clayton would argue that companies such as IBM have managed to stay afloat in part by creating independent units addressing disruptive technologies. As an example, he refers to how the company jumpstarted the PC business at a time when mainframes dominated the market. Otherwise, innovators can get bogged down by the intricacies of larger and diversified corporations.
The so-called intra-preneurial teams can be implemented under three different models:
- collaboration among subject matter experts from various departments who work together as part of multi-functional teams; they incubate the underpinnings of the new technology and, at the end of the process, they return to their departments (chances are, many might have been multi-tasking and joggling responsibilities all along anyway)
- small fully dedicated teams able to tap into other corporate resources and infrastructure on a need basis; which generates dependencies on other teams with different priorities and, at times, developing similar and/or competing projects;
- autonomous teams which operate independently and behave like a start-up.
There are pros and cons to each one. As a matter of fact, some projects involve the above three as part of a phased approach. In any case, a key question is:
- what kind of incentives motivate teams to innovate?
As, the quality of the answer depends on how the question is formulated, I think it is more appropriate to ask instead:
- what kind of environment and (qualitative & quantitative) incentives motivate individuals to become change agents and to overcome the risks and challenges inherit to entrepreneurial projects?
With regards to compensation, Manso states that:
- “The difficulty arises because innovation is the result of the exploration of untested approaches that are likely to fail, and failure is usually associated with low wages and termination (…) the optimal compensation scheme that motivates exploration exhibits substantial tolerance (or even reward) for early failure and reward for long-term success (…) the threat of termination may prevent the agent from exploring new untested approaches.”
When thinking of adopting entrepreneurial behaviors as part of corporate projects, it pays to get a clear understanding on the dynamics behind risk and rewards. I would think that individuals asked to incur higher risks than other employees are more likely to undertake challenges if they would:
- be compensated by means of higher rewards upon success;
- gain professional credit and recognition and/or opportunities for career advancement based on merits;
- have access to job placement opportunities upon project exit or completion… both in and outside the corporation.
Basically, the point is that to motivate entrepreneurial behaviors at established firms there is a need for:
- having an end in sight and a clear and regular feedback mechanism;
- an environment which lifts the kind of constrains that limit opportunities for entrepreneurial projects to succeed.
The point that I am making is that those with entrepreneurial spirit might not be as concerned about “termination” as they might be about the other factors I am outlining in this post…. otherwise it would be hard to get anyone to start a new business out there since it is well known that the success rate for start-ups is around 10% give or take.
J. de Francisco blogging from Chicago on May 8
