Buzz word of corruption always in the news since past decade. The persistence of corruption in some of big countries may reflect the presence of immigrant communities in these countries, in which barter and other forms of reciprocal dealing based on (and constructing) relations of trust, extended family relationships, clan ties, and the like continue to organize significant economic activity and make it natural to think of public officials as "selling" public services to their friends and relatives. Again, problem of corruption in 2008 underscores the importance of the legal framework to economic development. An honest, incorruptible police, criminal law enforcement machinery, and judiciary can increase economic efficiency by greatly reducing the amount of corruption (as well as in other ways), though it is equally important to have a commitment to free markets and a workable legislative and regulatory machinery to prevent economic activity from becoming encrusted with inefficient restrictions.
My personal comment I concentrate on corruption that on balance is bad. Obviously, if governments strongly regulate many activities, then companies, unions, and other groups that are regulated can do better if they can "bribe" officials to overlook or relax these regulations. So the wider is the reach of governments, the greater is the corruption potential. Somehow, other than narrowing the scope of government and strengthening legal institutions, what can be done to reduce (bad) corruption? One simple step is to improve the incentives of officials to act honestly. The incentive to be honest would be stronger when officials are better paid, and if they are fired from their well-paying jobs, and sometimes also punished rather severely if they are caught engaging in corrupt behavior. A few studies do support this conclusion that corruption thrives more in environments where officials are badly paid, such as policemen in most of Asian counties (name it - Indonesia? China? India?).
In a role - corruption is reduced by greater competition between separate political jurisdictions and stronger competition for political leadership. This implies that corruption is lower in decentralized political systems compared to centralized systems. Various studies do indicate that democracies generally appear to have less corruption than totalitarian systems, although some of the corruption in totalitarian systems like the Soviet Union may be of the good kind because the laws are so bad. And, corruption is reduced when information is more easily disseminated to the public. That is why a free press is such an important protector against greater corruption. The press is more effective in better educated societies, and various studies have shown that corruption is lower when education is greater. Education also helps cut corruption by improving political institutions, so part of the positive relation between the amount of corruption and the weakness of institution is the result of the positive connection between education and good institutions.
Next question - Can we stop this?
Tuesday, January 29, 2008
Network Load vs Ported Mobile Phone Numbers
Based on my experience currently in Malaysia, Telekom Malaysia (TM) launched their new Voice Network Query service that enables Celcom (mobile operator) to route voice calls to mobile phones directly to destination operator, minimizing network load. Now that regulations force Celcom to allow customers to port their mobile phone numbers, this introduces some network traffic issues. Of course, I should mention that you can port your traditional landline phone number to a VoIP providers, but that introduces its own series of number portability problems. In any case, this service which will allow major telecoms carriers to route voice calls to mobile phones directly to their destination network operator. The new service overcomes the issue of onward routing of voice calls to ported mobile numbers, thus reducing the issue of excess network traffic generated by voice calls misrouted due to mobile number portability.
When a mobile user switches network but retains their current phone number, calls have traditionally been routed via the user's former operator's infrastructure, which then routes calls to the operator which now provides service to the customer. This double handling of calls generates additional network traffic and transmission costs which, ultimately, are passed on to subscribers. With TM's Voice Network Query, TM customers can check the actual network of a mobile number before routing the call, thus routing the voice call directly to the correct network and avoiding unnecessary network traffic.
TM is able to offer this service by leveraging its SS7 connections into the global mobile network. Using their access directly into mobile operators (ie. Celcom), TM can query any mobile number to establish its home network, whichever operator that number might have originated on.
Somehow - my personal statement says - mobile Number Portability is a great thing for consumers but has caused huge amounts of problems in the routing of voice calls and lack of tariff transparency for the subscriber. Because mobile numbers are attached to a particular operator, when that number is ported onto a customer's new operator, the routing process can become hugely complex. Voice Network Query overcomes that problem with a simple and elegant solution - by 'asking' the phone what network its sitting on before routing the call it's possible to connect directly to the right network without the hassle and cost of unnecessary connections through intermediary operators.
Next question - How they market this 'easily' to us?
When a mobile user switches network but retains their current phone number, calls have traditionally been routed via the user's former operator's infrastructure, which then routes calls to the operator which now provides service to the customer. This double handling of calls generates additional network traffic and transmission costs which, ultimately, are passed on to subscribers. With TM's Voice Network Query, TM customers can check the actual network of a mobile number before routing the call, thus routing the voice call directly to the correct network and avoiding unnecessary network traffic.
TM is able to offer this service by leveraging its SS7 connections into the global mobile network. Using their access directly into mobile operators (ie. Celcom), TM can query any mobile number to establish its home network, whichever operator that number might have originated on.
Somehow - my personal statement says - mobile Number Portability is a great thing for consumers but has caused huge amounts of problems in the routing of voice calls and lack of tariff transparency for the subscriber. Because mobile numbers are attached to a particular operator, when that number is ported onto a customer's new operator, the routing process can become hugely complex. Voice Network Query overcomes that problem with a simple and elegant solution - by 'asking' the phone what network its sitting on before routing the call it's possible to connect directly to the right network without the hassle and cost of unnecessary connections through intermediary operators.
Next question - How they market this 'easily' to us?
Friday, January 18, 2008
Changing Landscape in 2008
Again, I want to share about Technology Trends for 2008. First in mind, technology touches us all - in every aspect of our life. Our digital lives have been transformed in the past ten years. Computers have digital representations of our personal and work lives embedded in our emails and documents, cellphones connect us instantaneously with family and friends, and websites assist us in the search for information and to complete transactions. Technological change continues to accelerate, providing the visionaries with an opportunity for that little extra competitive advantage which can make all the difference between market leaders and the also-rans. As we look at the various technology trends last year, it is important to understand the underlying forces of change and their evolution in the years to come. This is how new opportunities and business are created. Since change is happening across many dimensions, it is also important to get a who-listic view of the world around us.
In addition, there is a need to develop a perspective that centres around emerging markets. These are the next big growth markets and need solutions which are likely to be different from the developed market. Increasingly, many of the world's largest technology companies are looking to create specific emerging market groups and solutions. The developed world has seen computing and communications evolve through many sequential revolutions: personal computers, local area networks, client-server computing, enterprise software, Internet, next generation of network, mobile phones and broadband. Next questions - what happened in the developed markets over two decades is being compressed in the emerging markets in a few years. This means that more than just technology innovation, there is a need for agility, speed and localisation to tap into the opportunities by technology's newest customers. Is it expensive?
To put this context, take a look at China and the changes that are underway. Cellphone adoption is growing, even China Mobile just announced over the course of the quarter, they added 17.3M new customers, and the phone is morphing from just a voice device to both a possible alternative to a computer and is becoming a fashion statement. Computers are becoming a wee-bit more affordable with the likes of AMD vs INTEL making inroads with cheaper processor. Broadband access is starting to become available at reasonable price points. Open-source software creates an alternative to piracy and non-consumption. Internet e-commerce is starting to pick up again with services like airline ticket booking which remove a pain point in daily lives. Technology is no longer a decision to be just made by the management in the company. It is increasingly going to get embedded in multiple aspects of our lives. It is a weapon that needs to be leveraged by top management not just in the marketplace, but also across the extended enterprise. In this context, it is helpful to step back and take a look at ten key technology trends that we are seeing around us and understand their impact for our personal and business lives.
2008 Trends:
1. Digitisation
Fundamental driver across the technology landscape is digitisation - once things move from atoms to bits, or analog to digital, it becomes possible to do a wide array of transformations which previously were not possible. For example, digital music. For a long time, as the industry has shifted to digital content, it has become possible to not only time-shift consumption via customised playlists on devices like Apple's iPod, but also to distribute it via the Internet for nearly zero-cost, fundamentally undermining the business model of the industry. Something similar is happening in telecom with voice-over-IP. Traditional telcos are realising that the ability to digitise voice and transmit it not over proprietary networks but over the Internet threatens their core business and customer relationship. The digitisation of information and business processes means that countries like China can use their low-cost advantage to offer outsourced services to global organisations.
The process that began with the availability of the personal computer a quarter-century ago is now cutting across the value chain, creating an end-to-end integrated digital flow. From our homes to enterprises, digitisation is the starting point for many disruptive innovations as part of "creative destruction", driving significant changes across industries, bringing not just change but also opportunity in a world that's becoming smaller and smaller. Next Question - cost and security?
2. IT Commoditisation
Back to 2007 - silicon, Storage and Bandwidth are available in plenty. Processing power doubles every 18 months, storage capacity every 9 months and available bandwidth every 12 months. This has been happening for some time now, and is likely to continue for the foreseeable future. The result is there for us to see. Google has built a massive platform with more than 1Mio commodity computers and is in a position to offer free services like email with a storage capacity of 1 GB email. The cost of 1 GB disk space has fallen to just about $1. In countries like Japan and Korea, bandwidth of the order of 30 Mbps is available for about $50... great huh?
Global investment in technology continues. There are more than a billion cellphones around the world, with 2007 seeing sales of more than a billion phones which provide all kinds of functionality ranging from digital cameras, multimedia messaging, FM radio, TV and even some basic computing functions. Again, even in China has wireless data networks in hundreds of major cities with connectivity costs of in minumum (China Mobile vs China Unicom). Seemingly, technology is ubiquitous and everywhere. Or is it? But again - in countries like China, adoption of IT still leaves a lot to be desired. Only the very top of the pyramid uses technology. There are four barriers which need to be overcome for these countries to benefit from the commoditisation of IT: the information barrier, on what technology can really do; the desirabaility barrier, through the availability of relevant and useful software and applications; the manageability barrier, so that IT can be easily deployed and leveraged; the affordabaility barrier, which makes it available at prices that local users can pay.
3. TCO Issues
What is TCO? Term of Total Cost of Ownership - as spending on IT has increased in enterprises, there has been an increasing attention being paid to the TCO in technology. It is not longer just the upfront cost paid for hardware and software that needs to be taken into account, but the overall cost that goes into administration of the systems deployed. As growth has slowed, increasing attention is being paid to the TCO of technology in organisations -- new terminology is 'managed services'.
4. Real-Time Application
The dream of the real-time enterprise (RTE) has been there since the earliest software systems were written. Success has been achieved to varying degrees by different organisations. The challenge is what fuels the various business software companies and the looming consolidation in the industry (considering Oracle's bid for Bea recently). In business, the differentiator is increasingly not in the machines used for production, but in the processes that make up the information refinery. An example of a real-time enterprise is Cisco, which is known to be able to close its books every day. Service-oriented architectures are helping glue the various information silos within the enterprise to create an event-driven platform, built around business processes.
Now, the increasing availability of affordable high-speed network connectivity and its derivatives is letting certain functions within the enterprise interact in real time. The business drivers for RTE technologies continue to drive adoption: Reducing the amount of time it takes for information to be transmitted between functional areas within an enterprise and its supporting supply chain will yield significant business benefits.
5. Security
If there is one single word that is uppermost in 2008, it is security. The proliferation of viruses, spam and spyware have caused headaches aplenty. In addition, the ability to connect various company locations via a virtual private network (VPN) over the Internet also means that data needs to be sent securely. Firewalls, Intrusion Detection, Encryption have all become part of the technology vocabulary. If anything, the emphasis on security will continue to increase in times to come. What we consumers need is a simple, unified protection plan to counter all of these threats. And the computer, software and Internet industries have badly failed us in this regard. They would rather dump the security mess in the laps of users than solve it at the level where a solution really belongs: in the operating system, or the hardware, or the online provider's servers. Next Question - so, anyone up to it?
6. e-Business (raise of dot-com?)
Again, Internet has become a key ally in doing business. A company that neglects its website may be committing commercial suicide. A website is increasingly becoming the gateway to a company's brand, products and services - even if the firm does not sell online(?). Again sample in China (although I don't understand their language), I am seeing an increase in online commerce. The world of e-business is here in full force. And, if we take a look back in the late 1990s when the Internet hype was at its peak, the belief was that the Internet would change everything. Every industry would be transformed. If something wasn't on the Internet, it didn't exist. Then, reality set in. There are many businesses which the Internet has made a difference too. By reducing transaction costs, it has helped consumers get lower prices and forced producers to become more efficient. By bridging geographical barriers, it has allowed companies to open up new markets. Search engines like Google have allowed small businesses to reach out to potential customers far more cost-effectively than other media. Electronic marketplaces like eBay have seen many build businesses around them.
As with any new infrastructure, it takes time for its full potential to be realised. Increasing broadband availability will only accelerate the trend. As the ecosystem around the Internet gets put in place, we are moving closer to the future where e-business and e-commerce become synonymous with business and the commerce, and the "e"-prefix simply disappears. Next Question - when?
7. Collaboration
Productivity emerges from teams of people working together to achieve a common goal. Making groups more productive is the next big challenge that is being tackled by many companies. The focus now has been on tools that make writing - individually and in teams - easier. One of the key requirements - really a very simple one to have, but something so sorely left out in the current system, is a presence indicator. Much like in current IM systems - telling us who's available, who's logged in and therefore present in the office, who I can ping for a query, and ensuring that a response is received. In the case of his organisation, currently, they'd send an email, wait for a response, followed by more emails as reminders, and finally in sheer frustration, pick up the phone and make a call - which can be expensive if outstation (as is the case very often in their line of business) and does not always ensure that they will get a response - what if the person is away from the office? Well, somehow - we aren't there yet, but getting close. A combination of new technologies are coming together to make it easier for us to work together in groups - be it in the workpace or among friends and family.
8. Always "On"
I am trying to make sample in Asia biggest nation, China - around five years ago, it would have been hard to imagine that Chineses people would be buying cellphones at the rate of nearly 2 million a month. Similarly, today, it is hard to imagine a broadband China? but that is exactly what we are about to see. The next couple years will see Chinese consumers and enterprises enveloped in ubiquitous, high-speed connectivity from multiple sources - wireless, DSL, cable and satellite (hopefully, not only in big major cities). Complement this with WiFi-enabled laptops and smartphones, and the always-on world is at hand. This will necessitate a change in the not just employees work, but also the interactions between enterprises and customers.
In China, China Mobile and China Unicom (well, only 2 big players *sigh*)'s data services have become very popular with laptop users as they provide instant access from anywhere. Year 2008 will see cellphone sales of nearly next billion. Each cellphone makes its owner instantly connected to a worldwide network. As more and more features are packed into cellphones, they are becoming cameras, radios and TVs, gaming devices, and even computers. Smart radios are being embedded into all kinds of devices. Also, microchips embedded in products are creating an 'Internet of things'. Also, a mix of broadband and wireless technologies are providing bandwidth aplenty anywhere and everywhere. From WiFi to WiMax, Zigbee to Ultrawideband, Mobile-Fi to 3G/HSDPA or even 4G(?), there is no space which can remain unwired and no device which can stay unconnected. Backhaul networks on fibre are creating a world where it is now even more economical to carry voice over packet-switched IP networks. It is a world where, according to one of the Skype co-founders, telcos will become software application providers (hahahaha...)
The world of always-on in a natural manifestation of the convergence of various industries - computing, telecom and consumer electronics. It is a world which telecom- and computing-poor infrastructures like in developing countries can leapfrog to, with the right vision and will. Just like South Korea and Japan has done.
9. Advanced Outsourcing
Since 2007, outsourcing is a fundamental trend, and there is little any US government is going to be able to do anything about it. What is clear is that companies globally are relooking at their cost structures and leveraging the commoditisation that has taken place in IT as well as services to focus on what they do best. It is hard to overlook a 30-70% cost savings for certain processes, but that is just the start. What outsourcing also allows is to also fundamentally redesign business processes. This is what companies like IBM, PwC, KPMG, etc; are onow offering the global majors.
Somehow, the goal is not to replace people. The people are where the creativity comes from. But you take the repeatable, standardizeable pieces and put them in software that we deliver either as products or as specialized services. The humans can apply more of their creativity to the piece that only humans can do. The emergence of Web services is the technological base and the lingua franca that makes the idea of a services stack possible. You have to somehow bridge the world of software to the world of business processes.
10. New Emerging Market as Drivers
Overviewing first phase of the technology revolution over the past few decades has touched the lives of the top of the global pyramid of consumers and enterprises. It is only in the past few years that technology has started making its way into the lives of businesses and families at the bottom of the pyramid - in the emerging markets. Because of the lack of legacy and an inherent need, adoption of some technologies has turned out be extremely rapid. Sample that I have read, in China, about a million computers are purchased every month, as compared to 5 million cellphones. Now imagine what would happen if computers were available at the price points of cellphones. We will then see annual computer sales at 20-25 million for many years to come, making China among the top three markets in the world. What does that mean for the global technology players for whom China has so far been a rounding off error in their revenues and profits? Emerging markets, by virtue of their large numbers, have the potential to be the hotbed for disruptive innovations. They are the new markets which can ignite growth at technology companies. But at the same time, they need solutions which need to be at different price-points from what the developed world has been paying. This is both a challenge and an opportunity.
End of the story - in the world of technology, like time, does not stand still. Innovation and change are the only constants. In Asia, place that I am currently staying, have the opportunity to leapfrog by simultaneously leveraging many of the new innovations that the technology industry is making available. The force of digitisation is at once a threat and an opportunity. The choice is for each one of us to make.Next Question - do you?
In addition, there is a need to develop a perspective that centres around emerging markets. These are the next big growth markets and need solutions which are likely to be different from the developed market. Increasingly, many of the world's largest technology companies are looking to create specific emerging market groups and solutions. The developed world has seen computing and communications evolve through many sequential revolutions: personal computers, local area networks, client-server computing, enterprise software, Internet, next generation of network, mobile phones and broadband. Next questions - what happened in the developed markets over two decades is being compressed in the emerging markets in a few years. This means that more than just technology innovation, there is a need for agility, speed and localisation to tap into the opportunities by technology's newest customers. Is it expensive?
To put this context, take a look at China and the changes that are underway. Cellphone adoption is growing, even China Mobile just announced over the course of the quarter, they added 17.3M new customers, and the phone is morphing from just a voice device to both a possible alternative to a computer and is becoming a fashion statement. Computers are becoming a wee-bit more affordable with the likes of AMD vs INTEL making inroads with cheaper processor. Broadband access is starting to become available at reasonable price points. Open-source software creates an alternative to piracy and non-consumption. Internet e-commerce is starting to pick up again with services like airline ticket booking which remove a pain point in daily lives. Technology is no longer a decision to be just made by the management in the company. It is increasingly going to get embedded in multiple aspects of our lives. It is a weapon that needs to be leveraged by top management not just in the marketplace, but also across the extended enterprise. In this context, it is helpful to step back and take a look at ten key technology trends that we are seeing around us and understand their impact for our personal and business lives.
2008 Trends:
1. Digitisation
Fundamental driver across the technology landscape is digitisation - once things move from atoms to bits, or analog to digital, it becomes possible to do a wide array of transformations which previously were not possible. For example, digital music. For a long time, as the industry has shifted to digital content, it has become possible to not only time-shift consumption via customised playlists on devices like Apple's iPod, but also to distribute it via the Internet for nearly zero-cost, fundamentally undermining the business model of the industry. Something similar is happening in telecom with voice-over-IP. Traditional telcos are realising that the ability to digitise voice and transmit it not over proprietary networks but over the Internet threatens their core business and customer relationship. The digitisation of information and business processes means that countries like China can use their low-cost advantage to offer outsourced services to global organisations.
The process that began with the availability of the personal computer a quarter-century ago is now cutting across the value chain, creating an end-to-end integrated digital flow. From our homes to enterprises, digitisation is the starting point for many disruptive innovations as part of "creative destruction", driving significant changes across industries, bringing not just change but also opportunity in a world that's becoming smaller and smaller. Next Question - cost and security?
2. IT Commoditisation
Back to 2007 - silicon, Storage and Bandwidth are available in plenty. Processing power doubles every 18 months, storage capacity every 9 months and available bandwidth every 12 months. This has been happening for some time now, and is likely to continue for the foreseeable future. The result is there for us to see. Google has built a massive platform with more than 1Mio commodity computers and is in a position to offer free services like email with a storage capacity of 1 GB email. The cost of 1 GB disk space has fallen to just about $1. In countries like Japan and Korea, bandwidth of the order of 30 Mbps is available for about $50... great huh?
Global investment in technology continues. There are more than a billion cellphones around the world, with 2007 seeing sales of more than a billion phones which provide all kinds of functionality ranging from digital cameras, multimedia messaging, FM radio, TV and even some basic computing functions. Again, even in China has wireless data networks in hundreds of major cities with connectivity costs of in minumum (China Mobile vs China Unicom). Seemingly, technology is ubiquitous and everywhere. Or is it? But again - in countries like China, adoption of IT still leaves a lot to be desired. Only the very top of the pyramid uses technology. There are four barriers which need to be overcome for these countries to benefit from the commoditisation of IT: the information barrier, on what technology can really do; the desirabaility barrier, through the availability of relevant and useful software and applications; the manageability barrier, so that IT can be easily deployed and leveraged; the affordabaility barrier, which makes it available at prices that local users can pay.
3. TCO Issues
What is TCO? Term of Total Cost of Ownership - as spending on IT has increased in enterprises, there has been an increasing attention being paid to the TCO in technology. It is not longer just the upfront cost paid for hardware and software that needs to be taken into account, but the overall cost that goes into administration of the systems deployed. As growth has slowed, increasing attention is being paid to the TCO of technology in organisations -- new terminology is 'managed services'.
4. Real-Time Application
The dream of the real-time enterprise (RTE) has been there since the earliest software systems were written. Success has been achieved to varying degrees by different organisations. The challenge is what fuels the various business software companies and the looming consolidation in the industry (considering Oracle's bid for Bea recently). In business, the differentiator is increasingly not in the machines used for production, but in the processes that make up the information refinery. An example of a real-time enterprise is Cisco, which is known to be able to close its books every day. Service-oriented architectures are helping glue the various information silos within the enterprise to create an event-driven platform, built around business processes.
Now, the increasing availability of affordable high-speed network connectivity and its derivatives is letting certain functions within the enterprise interact in real time. The business drivers for RTE technologies continue to drive adoption: Reducing the amount of time it takes for information to be transmitted between functional areas within an enterprise and its supporting supply chain will yield significant business benefits.
5. Security
If there is one single word that is uppermost in 2008, it is security. The proliferation of viruses, spam and spyware have caused headaches aplenty. In addition, the ability to connect various company locations via a virtual private network (VPN) over the Internet also means that data needs to be sent securely. Firewalls, Intrusion Detection, Encryption have all become part of the technology vocabulary. If anything, the emphasis on security will continue to increase in times to come. What we consumers need is a simple, unified protection plan to counter all of these threats. And the computer, software and Internet industries have badly failed us in this regard. They would rather dump the security mess in the laps of users than solve it at the level where a solution really belongs: in the operating system, or the hardware, or the online provider's servers. Next Question - so, anyone up to it?
6. e-Business (raise of dot-com?)
Again, Internet has become a key ally in doing business. A company that neglects its website may be committing commercial suicide. A website is increasingly becoming the gateway to a company's brand, products and services - even if the firm does not sell online(?). Again sample in China (although I don't understand their language), I am seeing an increase in online commerce. The world of e-business is here in full force. And, if we take a look back in the late 1990s when the Internet hype was at its peak, the belief was that the Internet would change everything. Every industry would be transformed. If something wasn't on the Internet, it didn't exist. Then, reality set in. There are many businesses which the Internet has made a difference too. By reducing transaction costs, it has helped consumers get lower prices and forced producers to become more efficient. By bridging geographical barriers, it has allowed companies to open up new markets. Search engines like Google have allowed small businesses to reach out to potential customers far more cost-effectively than other media. Electronic marketplaces like eBay have seen many build businesses around them.
As with any new infrastructure, it takes time for its full potential to be realised. Increasing broadband availability will only accelerate the trend. As the ecosystem around the Internet gets put in place, we are moving closer to the future where e-business and e-commerce become synonymous with business and the commerce, and the "e"-prefix simply disappears. Next Question - when?
7. Collaboration
Productivity emerges from teams of people working together to achieve a common goal. Making groups more productive is the next big challenge that is being tackled by many companies. The focus now has been on tools that make writing - individually and in teams - easier. One of the key requirements - really a very simple one to have, but something so sorely left out in the current system, is a presence indicator. Much like in current IM systems - telling us who's available, who's logged in and therefore present in the office, who I can ping for a query, and ensuring that a response is received. In the case of his organisation, currently, they'd send an email, wait for a response, followed by more emails as reminders, and finally in sheer frustration, pick up the phone and make a call - which can be expensive if outstation (as is the case very often in their line of business) and does not always ensure that they will get a response - what if the person is away from the office? Well, somehow - we aren't there yet, but getting close. A combination of new technologies are coming together to make it easier for us to work together in groups - be it in the workpace or among friends and family.
8. Always "On"
I am trying to make sample in Asia biggest nation, China - around five years ago, it would have been hard to imagine that Chineses people would be buying cellphones at the rate of nearly 2 million a month. Similarly, today, it is hard to imagine a broadband China? but that is exactly what we are about to see. The next couple years will see Chinese consumers and enterprises enveloped in ubiquitous, high-speed connectivity from multiple sources - wireless, DSL, cable and satellite (hopefully, not only in big major cities). Complement this with WiFi-enabled laptops and smartphones, and the always-on world is at hand. This will necessitate a change in the not just employees work, but also the interactions between enterprises and customers.
In China, China Mobile and China Unicom (well, only 2 big players *sigh*)'s data services have become very popular with laptop users as they provide instant access from anywhere. Year 2008 will see cellphone sales of nearly next billion. Each cellphone makes its owner instantly connected to a worldwide network. As more and more features are packed into cellphones, they are becoming cameras, radios and TVs, gaming devices, and even computers. Smart radios are being embedded into all kinds of devices. Also, microchips embedded in products are creating an 'Internet of things'. Also, a mix of broadband and wireless technologies are providing bandwidth aplenty anywhere and everywhere. From WiFi to WiMax, Zigbee to Ultrawideband, Mobile-Fi to 3G/HSDPA or even 4G(?), there is no space which can remain unwired and no device which can stay unconnected. Backhaul networks on fibre are creating a world where it is now even more economical to carry voice over packet-switched IP networks. It is a world where, according to one of the Skype co-founders, telcos will become software application providers (hahahaha...)
The world of always-on in a natural manifestation of the convergence of various industries - computing, telecom and consumer electronics. It is a world which telecom- and computing-poor infrastructures like in developing countries can leapfrog to, with the right vision and will. Just like South Korea and Japan has done.
9. Advanced Outsourcing
Since 2007, outsourcing is a fundamental trend, and there is little any US government is going to be able to do anything about it. What is clear is that companies globally are relooking at their cost structures and leveraging the commoditisation that has taken place in IT as well as services to focus on what they do best. It is hard to overlook a 30-70% cost savings for certain processes, but that is just the start. What outsourcing also allows is to also fundamentally redesign business processes. This is what companies like IBM, PwC, KPMG, etc; are onow offering the global majors.
Somehow, the goal is not to replace people. The people are where the creativity comes from. But you take the repeatable, standardizeable pieces and put them in software that we deliver either as products or as specialized services. The humans can apply more of their creativity to the piece that only humans can do. The emergence of Web services is the technological base and the lingua franca that makes the idea of a services stack possible. You have to somehow bridge the world of software to the world of business processes.
10. New Emerging Market as Drivers
Overviewing first phase of the technology revolution over the past few decades has touched the lives of the top of the global pyramid of consumers and enterprises. It is only in the past few years that technology has started making its way into the lives of businesses and families at the bottom of the pyramid - in the emerging markets. Because of the lack of legacy and an inherent need, adoption of some technologies has turned out be extremely rapid. Sample that I have read, in China, about a million computers are purchased every month, as compared to 5 million cellphones. Now imagine what would happen if computers were available at the price points of cellphones. We will then see annual computer sales at 20-25 million for many years to come, making China among the top three markets in the world. What does that mean for the global technology players for whom China has so far been a rounding off error in their revenues and profits? Emerging markets, by virtue of their large numbers, have the potential to be the hotbed for disruptive innovations. They are the new markets which can ignite growth at technology companies. But at the same time, they need solutions which need to be at different price-points from what the developed world has been paying. This is both a challenge and an opportunity.
End of the story - in the world of technology, like time, does not stand still. Innovation and change are the only constants. In Asia, place that I am currently staying, have the opportunity to leapfrog by simultaneously leveraging many of the new innovations that the technology industry is making available. The force of digitisation is at once a threat and an opportunity. The choice is for each one of us to make.Next Question - do you?
Wednesday, January 16, 2008
Another Flashback
Another copy from my journal in Facebook:
Suddenly, I just got flash in my mind... Take a look at Singapore airport from the air to see how to do it right. (The design is probably not just limited to Singapore itself but most good airports in the world.) There is a terminals area in the centre away from the check-in and arrivals area. The terminals area thus has plenty of parking space for aircraft on all its sides. Every aircraft thus can be connected to an aerobridge. The terminals area itself is connected to the arrivals / departures area with an underground tunnel. The arrivals area is on the lower level, while the departures area is one level above.
Now take a look at the hodge-podge that is Singapore's airport. In the infinite wisdom of the planners, they built common runways but had two separate terminals for domestic and international travelers which for years were connected only by getting on the crowded roads. A couple years or so ago, wisdom dawned and they finally used the inside roads to train passengers back and forth between the two terminals.
The new terminal (terminal 3) that has been created for some of the airlines (replacing the old one) forces every traveller to be carted in a bus and connecting train. There is no provision for any aerobridge. Which era are we willing in? The terminals area and the arrivals / departures area is in one cramped building limiting growth. A significant part of the airport has been overrun by squatters limiting the expansion of runways.
Somehow, we pay a price every day for these kind of inefficiencies in the system. Many of these decisions could have been done right the first time around - and we did not need to be rocket scientists for that. We just had to look at best practices that people have followed before us. But being one of history's oldest civilizations, we think we have all the answers. Luckily, the rest of the world doesn't seem to think so. What do you think?
Suddenly, I just got flash in my mind... Take a look at Singapore airport from the air to see how to do it right. (The design is probably not just limited to Singapore itself but most good airports in the world.) There is a terminals area in the centre away from the check-in and arrivals area. The terminals area thus has plenty of parking space for aircraft on all its sides. Every aircraft thus can be connected to an aerobridge. The terminals area itself is connected to the arrivals / departures area with an underground tunnel. The arrivals area is on the lower level, while the departures area is one level above.
Now take a look at the hodge-podge that is Singapore's airport. In the infinite wisdom of the planners, they built common runways but had two separate terminals for domestic and international travelers which for years were connected only by getting on the crowded roads. A couple years or so ago, wisdom dawned and they finally used the inside roads to train passengers back and forth between the two terminals.
The new terminal (terminal 3) that has been created for some of the airlines (replacing the old one) forces every traveller to be carted in a bus and connecting train. There is no provision for any aerobridge. Which era are we willing in? The terminals area and the arrivals / departures area is in one cramped building limiting growth. A significant part of the airport has been overrun by squatters limiting the expansion of runways.
Somehow, we pay a price every day for these kind of inefficiencies in the system. Many of these decisions could have been done right the first time around - and we did not need to be rocket scientists for that. We just had to look at best practices that people have followed before us. But being one of history's oldest civilizations, we think we have all the answers. Luckily, the rest of the world doesn't seem to think so. What do you think?
Tuesday, January 15, 2008
Business Review: Cost of Triple Play
Interesting survey from net that I thought I'd share regarding Triple Play expenditures. They said, application and content service providers are really starting to ramp up their spending. These providers around the globe see triple play services not merely as a means of increasing top-line revenue, but as a means of self-preservation. Network operators are redefining and realigning themselves to be the one-stop shop for all things digital for residential and enterprise subscribers, and they believe triple play services will give them the competitive edge they need to succeed.
From the review, majority of service providers in the study plan to further increase capex spending in the next 12 months on IPTV equipment, broadband CPE, broadband aggregation equipment, and voice over broadband equipment, and they expect revenue growth in all areas of triple play services in the next 12 months. And a big chunk of revenue it is: The average percent of total company revenue from triple play services ranges from around 40% to 50% in 2006 to 2007. Again, they said - with nearly 40% of their capex budgets going to triple play service infrastructure, service providers are sending a clear message that the combination of voice, data, and video services is a long-term differentiator for them, and carriers are demanding complete interoperability, full standards compliance, and an open and flexible architecture from their suppliers to ensure the content and services they provide will work right out of the box and far into the future.
IP voice is a big draw for triple play providers, but it's video that's really the newest, most exciting, and most technically challenging part of triple play services, and IPTV is where all the action is. In fact, most of Asian service provider already offer IPTV, and that one offers it by 2007-2008 (I believed).
My review from findings in this industry (ref.Asia):
- Key drivers for most of service providers deploying triple play services are
1) increased broadband revenue per user
2) new revenue streams
- And most of them rate vendor interoperability a key technical challenge when rolling out triple play services
- The most pressing business challenge triple play service providers face is securing broadcast and on-demand video content; acquiring content is also a challenge
- iTV (interactive TV) is the fastest growing video service offered by service providers, bringing Internet capabilities directly to the TV screen, including instant messaging, shop at home, click to call and click to purchase capabilities, and, most significantly, online gaming services.
Next question: How much it will cost for us?
From the review, majority of service providers in the study plan to further increase capex spending in the next 12 months on IPTV equipment, broadband CPE, broadband aggregation equipment, and voice over broadband equipment, and they expect revenue growth in all areas of triple play services in the next 12 months. And a big chunk of revenue it is: The average percent of total company revenue from triple play services ranges from around 40% to 50% in 2006 to 2007. Again, they said - with nearly 40% of their capex budgets going to triple play service infrastructure, service providers are sending a clear message that the combination of voice, data, and video services is a long-term differentiator for them, and carriers are demanding complete interoperability, full standards compliance, and an open and flexible architecture from their suppliers to ensure the content and services they provide will work right out of the box and far into the future.
IP voice is a big draw for triple play providers, but it's video that's really the newest, most exciting, and most technically challenging part of triple play services, and IPTV is where all the action is. In fact, most of Asian service provider already offer IPTV, and that one offers it by 2007-2008 (I believed).
My review from findings in this industry (ref.Asia):
- Key drivers for most of service providers deploying triple play services are
1) increased broadband revenue per user
2) new revenue streams
- And most of them rate vendor interoperability a key technical challenge when rolling out triple play services
- The most pressing business challenge triple play service providers face is securing broadcast and on-demand video content; acquiring content is also a challenge
- iTV (interactive TV) is the fastest growing video service offered by service providers, bringing Internet capabilities directly to the TV screen, including instant messaging, shop at home, click to call and click to purchase capabilities, and, most significantly, online gaming services.
Next question: How much it will cost for us?
Monday, January 14, 2008
What is Google Android?
Again another fiesta that I have heard about Google from Youtube.com - first, I should point to a funny parody of the supposed Google Android on Youtube, which takes the concept of Google Adsense (ads based on keywords on the webpage) and extends it to speech-recognition of words spoken on the phone to "speak" relevant ads.
Well then, as you know, Google Android aka Dream Phone is a mobile phone platform based on the Linux operating system and developed by the Open Handset Alliance. There have been many rumors about what it will ultimately look like, with several parodies of it circling YouTube, especially this one:
http://www.youtube.com/watch?v=naUnXplUtrQ
I decided to check out the URL. Sure enough it had two fields - one for entering in your phone number (From) and another field for the destination number (To). Further, the top of the page boldly claims "Google dream phone, android, gphone... whatever its called. Here's a live demo! demo1.0" I was skeptical to say the least, but figured I'd try this anyway.
The preview they gave for speech phrases the demo would recognize often were based in Mountain View, the headquarters of Google, such as "weather for Mountain View". Even asking "what are we doing tonight" was answered with movie times for Mountain View. Trying so hard to associate Google's HQ location made me even more skeptical this was legit. Speech recognition and the ability to conference in two legs of a call is nothing new.
I will say there are plenty of existing technologies that can do what this preview that they just did. Though perhaps this is a legit sample of Google Android. Perhaps Google and their partners just doing something? Who knows? If I had to make a prediction on this 2008, I'd say this is a hoax. But still pretty fascinating to be on a call and then have advertisements or information injected into the call depending on what you say. Be afraid... Be very afraid!
Meaning FREE CALL!!
Well then, as you know, Google Android aka Dream Phone is a mobile phone platform based on the Linux operating system and developed by the Open Handset Alliance. There have been many rumors about what it will ultimately look like, with several parodies of it circling YouTube, especially this one:
http://www.youtube.com/watch?v=naUnXplUtrQ
I decided to check out the URL. Sure enough it had two fields - one for entering in your phone number (From) and another field for the destination number (To). Further, the top of the page boldly claims "Google dream phone, android, gphone... whatever its called. Here's a live demo! demo1.0" I was skeptical to say the least, but figured I'd try this anyway.
The preview they gave for speech phrases the demo would recognize often were based in Mountain View, the headquarters of Google, such as "weather for Mountain View". Even asking "what are we doing tonight" was answered with movie times for Mountain View. Trying so hard to associate Google's HQ location made me even more skeptical this was legit. Speech recognition and the ability to conference in two legs of a call is nothing new.
I will say there are plenty of existing technologies that can do what this preview that they just did. Though perhaps this is a legit sample of Google Android. Perhaps Google and their partners just doing something? Who knows? If I had to make a prediction on this 2008, I'd say this is a hoax. But still pretty fascinating to be on a call and then have advertisements or information injected into the call depending on what you say. Be afraid... Be very afraid!
Meaning FREE CALL!!
Friday, January 11, 2008
Borderless Connectivity
Again...somehow, to distill this great 21st century business transformation and what it portends for businesses and individuals, I decided to open up the screen on my notebook and reached out my friends from South Africa, Malaysia, Singapore and China; to bring up-to-the boring discussion about technology and life. Although we were continents apart, somehow, we were virtual office mates through our many collaborations using the Net and Skype Internet telephone, messaging and file sharing (total cost of collaborating this way? $ Zero). Such intimate interaction with individual knowledge workers, scattered around the globe, wasn't possible before the world was wired, and gives you a hint of what is collaboration without borders. And I use this technology to communicate as well with my love, Rachael in China - no hassle.
Well, consider this amazing fact - last year, mobile phones drew nearly 2 million new users(?) every day. 2008 will see the global mobile user base cross 5-6 billion(?). In comparison, the installed base of computers is about 800 million (ref. from an online journal). The contrast is even more stark in the emerging markets. By 2008-end, Asia will have about 50 million computers, and over 100 million mobiles. China has 80 million computers and around 400 million mobiles. Any way one slices it, for an increasing majority, the mobile phone will be their first - and only - computing device. What is interesting is that the mobile is always-on, always-available and a personal device. Never before in our lives have more than two of these conditions been met - and now suddenly, all three are met - simultaneously. This makes possible all kinds of new applications.
Other, for the most part, voice has been carried separately from data, while video has had its own network. Now, it is all changing as next-generation networks built around IP at their core, and voice and video are digitised. Voice becomes yet another application - as is already happening with VoIP, and network TV shifts to networked TV. IMS, MPLS and SIP are some of the building blocks for these networks. This triple play jargon is becoming a quadruple play with the integration of mobility. For example, in the future, consumers can experience Multimedia Communications Services features over their televisions, including the ability to answer email, instant messages and conduct a teleconference - all from the comfort of a living room sofa. Users in the future also will be able to access their subscription television service from multiple different devices instead of just their home TV. Next question - When in Asia and how much?
For all of us in Asia long-used to dial-up and unreliable Internet access, hope is at hand. This world of occasionally-connected computing is giving way to always-on connectivity over DSL and cable. In addition, the 2.5G and 3G wireless networks also ensure that our mobile phones are also always connected. The other thread is the increasing availability of bandwidth. Even as users in South Korea, Japan and Hong Kong experience affordable multi-megabit access, this will extend to other markets also. And change life and lifestyles forever. In an always-on world, data and applications can reside in the cloud, and we as users can access the information we need from the device we want independent of location. This has been talked about for long, but the next few years are seeing the mix of access devices and networks to bring us truly ubiquitous and pervasive connectivity.
Carpediem! (seize the day!)
Well, consider this amazing fact - last year, mobile phones drew nearly 2 million new users(?) every day. 2008 will see the global mobile user base cross 5-6 billion(?). In comparison, the installed base of computers is about 800 million (ref. from an online journal). The contrast is even more stark in the emerging markets. By 2008-end, Asia will have about 50 million computers, and over 100 million mobiles. China has 80 million computers and around 400 million mobiles. Any way one slices it, for an increasing majority, the mobile phone will be their first - and only - computing device. What is interesting is that the mobile is always-on, always-available and a personal device. Never before in our lives have more than two of these conditions been met - and now suddenly, all three are met - simultaneously. This makes possible all kinds of new applications.
Other, for the most part, voice has been carried separately from data, while video has had its own network. Now, it is all changing as next-generation networks built around IP at their core, and voice and video are digitised. Voice becomes yet another application - as is already happening with VoIP, and network TV shifts to networked TV. IMS, MPLS and SIP are some of the building blocks for these networks. This triple play jargon is becoming a quadruple play with the integration of mobility. For example, in the future, consumers can experience Multimedia Communications Services features over their televisions, including the ability to answer email, instant messages and conduct a teleconference - all from the comfort of a living room sofa. Users in the future also will be able to access their subscription television service from multiple different devices instead of just their home TV. Next question - When in Asia and how much?
For all of us in Asia long-used to dial-up and unreliable Internet access, hope is at hand. This world of occasionally-connected computing is giving way to always-on connectivity over DSL and cable. In addition, the 2.5G and 3G wireless networks also ensure that our mobile phones are also always connected. The other thread is the increasing availability of bandwidth. Even as users in South Korea, Japan and Hong Kong experience affordable multi-megabit access, this will extend to other markets also. And change life and lifestyles forever. In an always-on world, data and applications can reside in the cloud, and we as users can access the information we need from the device we want independent of location. This has been talked about for long, but the next few years are seeing the mix of access devices and networks to bring us truly ubiquitous and pervasive connectivity.
Carpediem! (seize the day!)
Thursday, January 10, 2008
Asia Futurama - What Next in Our Life?
A copy from my journal in Facebook
Somehow - I strongly believe that we in Asia have an opportunity to build the next Black Swan, a company that in 3-5 years can be as important as Google is being seen today. Keeping a perspective of the future world that we want to create is necessary so that we make the right decisions as we work towards building it. The three key building blocks for my thinking about the future are broadband, mobility and emerging markets. Broadband will enable on-demand, net-native services. Mobility will empower users with computers in their pockets. Much of this future will begin and spread faster in emerging markets because they have very little legacy.
The opportunity lies in putting these building blocks together and creating an ecosystem of focused enterprises which can build out elements of the future. This is what I think of as the Emergic Enterprise Ecosystem. I am trying to have the best of both worlds - be an entrepreneur AND build the ecosystem. Starbay Development Limited is my 1st entrepreneurial endeavour - focused around incubator of mobility and software-as-a-service, with a focus on emerging markets like Southeast Asia. The Emergic ecosystem is about taking some of the other disruptions and getting greater leverage.
I did not start off thinking like this or with a master plan. These ideas have evolved in the past year. My goal is to make a positive difference to the middle- and bottom-of-the-pyramid in emerging markets through the appropriate use of technology. In doing so, I believe we can also build out the next Black Swan from Asia to the rest of the world.
Sample in China, we have one of the world's largest populations. And amongst all the enterprise that Asians have been known for, it will be good to also build one of the world's largest corporations in the next decade. Ambitious, yes. Earlier, it would have taken decades to build the next-generation conglomerates. But now, disruptions provide an opportunity to compress time. Google has become the largest media company (by market capitalisation) in about more than 6 years. We in Asia should set ourselves the goal of doing so in even less. Let us embrace Aggregate and Brainstorm Coming Disruptions, leveraging Entrepreneurship to Focus on building the next Googles.
Hear me, Asia... China...India...Malaysia...Singapore...Indonesia... others?
Tuesday, January 8, 2008
The East is Rising
I recently read e-book entitled "Extreme Competition" by Peter Fingar. It is very interesting to view based on current real situation and topic that I want to discuss. Anyway, today's world looks very different from the vantage point of where I currently reside here in Kuala Lumpur, Malaysia. It is a world full of infinite opportunities as companies seek to leapfrog the legacy of decades of slow development. It is a world with youthful energy and money being unleashed as one navigates the branded malls and restaurants coming up all over. It is a world where mobile phones connect people who never used a landline befor - and perhaps will never use a desktop computer, opting for more advanced mobility and wireless devices of all manner.
It is also a world where the services juggernaut in urban Malaysia is complemented by the largely agricultural rural economy, where hundreds of millions still live in plantation area. It's a world where the old still exists and, at times, even dominates the new. The contrasts may be stark, but there is one thing that is ubiquitous in this country: Optimism! For the first time in living memory, there is a belief that tomorrow will be better than today - from lot of Malaysian banner. That perception alone can make all the difference. I see not just the Old Malaysia of yesterday, but the New Malaysia of tomorrow. It is Malaysia that will be built in a world of extreme competition, and extreme opportunities-powered by transformations and disruptions.
Disruptions are technological shifts that can provide opportunities for newcomers to take on incumbents?and perhaps usurp their power. It happens all the time. Today's king is not guaranteed to be tomorrow's emperor. I have seen this in history and politics, and I also see it in business. While at times, incumbents hasten their downfall by questionable decisions (in retrospect), at other times entrepreneurial start-ups, with some luck, race their way to the top. While there is no magic formula, understanding disruptions and key trends is crucial for success. This is the journey Peter Fingar takes us through - from business process transformation creating real-time enterprises, to the combined buying power of the billions in the world?s emerging, underserved markets. Today's world is one of complexity, but a thorough understanding of the underlying principles can help in reaching new markets and customers.
I am a strong believer that there is a tectonic shift taking place in the world. The East is rising. And with a reverse brain drain of talent taking place from the West, innovations are now starting to flow from the world's emerging markets - with the potential to blowback to the developed nations. Today's non-consumers are becoming the new battleground - because their delight will shed light on the economic future of all nations. What is needed is an understanding of the present to build a vision of the future. Extreme Competition provides the needed framework to peer through the fog of today, and unravel the contours of tomorrow.
Next question - What is the benefit for us?
It is also a world where the services juggernaut in urban Malaysia is complemented by the largely agricultural rural economy, where hundreds of millions still live in plantation area. It's a world where the old still exists and, at times, even dominates the new. The contrasts may be stark, but there is one thing that is ubiquitous in this country: Optimism! For the first time in living memory, there is a belief that tomorrow will be better than today - from lot of Malaysian banner. That perception alone can make all the difference. I see not just the Old Malaysia of yesterday, but the New Malaysia of tomorrow. It is Malaysia that will be built in a world of extreme competition, and extreme opportunities-powered by transformations and disruptions.
Disruptions are technological shifts that can provide opportunities for newcomers to take on incumbents?and perhaps usurp their power. It happens all the time. Today's king is not guaranteed to be tomorrow's emperor. I have seen this in history and politics, and I also see it in business. While at times, incumbents hasten their downfall by questionable decisions (in retrospect), at other times entrepreneurial start-ups, with some luck, race their way to the top. While there is no magic formula, understanding disruptions and key trends is crucial for success. This is the journey Peter Fingar takes us through - from business process transformation creating real-time enterprises, to the combined buying power of the billions in the world?s emerging, underserved markets. Today's world is one of complexity, but a thorough understanding of the underlying principles can help in reaching new markets and customers.
I am a strong believer that there is a tectonic shift taking place in the world. The East is rising. And with a reverse brain drain of talent taking place from the West, innovations are now starting to flow from the world's emerging markets - with the potential to blowback to the developed nations. Today's non-consumers are becoming the new battleground - because their delight will shed light on the economic future of all nations. What is needed is an understanding of the present to build a vision of the future. Extreme Competition provides the needed framework to peer through the fog of today, and unravel the contours of tomorrow.
Next question - What is the benefit for us?
Monday, January 7, 2008
What is Digital Infrastructure in Indonesia?
The internet and mobility buzz are back! There's a buzz among entrepreneurs as venture capital companies are putting money into companies focused on the regional Asian market. Online advertising (display, search and classifieds) is growing. Users are starting to spend on transactions - going beyond ticketing. What needs to be done to ensure that the boom isn't just a transient bubble?
There are, in reality, two Internets - segmented by the access device and the type of connectivity. Sample in Indonesia, PC-based wireline Internet has about 20-30 million users (ref. data from APJII - Indonesia Internet Association), with a majority of the users using cybercafes. With only 4-6 million computers in Indonesian homes, this Internet is still a long way from becoming a utility in people's lives. The mobile-centric wireless Internet can potentially reach a significant portion of around 150 million cellphone users in Indonesia. However, the reality is that other than voice, there are only two services which touch a large fraction of this user base - SMS and ringback tones (sample of Value Added Services). The mobile-as-Indonesian's-computer paradigm still has a long way to go. Looking at it another way, for the real boom, the wireline Internet needs more devices (home computers) and the mobile Internet needs more services. What will it take to make both happen?
Somehow, to solve the device problem, one needs to rethink computing in a world where broadband exists - and thus make computers affordable and manageable. For this, the answers lie in borrowing two ideas from the mobile industry - create a device that costs very minimal and combine it with a reasonable monthly service charge, and make the device simple to use without requiring its owner to become a technology expert!
The solution to these twin challenges lies in thinking 'thin' computers for Indonesian homes - connected over DSL or cable to servers over high-speed networks. All the computational processing is done at the server-end, and the network computers become simple 'on-off' devices - without compromising on the performance that current desktop computers offer. To make the mobile Internet a reality in Indonesia, two changes need to happen, and they have to be driven by the mobile operators since they are the 'gatekeepers.' First, an open publishing platform is needed to allow anyone to create a mobile website that is accessible by everyone - just like on the PC Internet. Next question - HOW?
Second, mobile operators need to change their billing philosophy for value-added services. The bulk of the revenue that users pay must be given to the content providers. Mobile operators should, instead, charge for packet data flow through their 'pipes.' At a broader level, just like NTT Docomo did with its i-mode service in Japan in 1999, Indonesian mobile operators need to encourage the creation of a value-generating ecosystem. Taken together, these innovations can help build Indonesia's digital infrastructure, create a framework for other emerging markets to emulate and provide a large domestic market for companies to finally think Indonesia First... well, as one of the biggest market potential in Southeast Asia.
Because of the low home computer base in Indonesia, people largely use cybercafes to access the internet, paying between Rp.1,500 - Rp.10,000 per hour. Broadband access in Indonesia has been slow to grow - in part because most new investments have focused on the mobile infrastructure. But the bigger issue has been that the new home computer market is only a couple of million. That severely limits the target market for broadband providers. (Yes, there are about 5-10 million computers still not connected by broadband. If these people have not gotten broadband access to the Internet now, then I can only surmise that either access is not available or they have no reason to get one). Of course, broadband in Indonesia is not really broadband YET. Although the advertised bandwidth may be 256 or even 512 Kbps, actual speeds are often a fraction of that. Furthermore, since access plans often have very low data transfer limits, broadband in reality is at best an (almost) always-on narrowband connection.
Internet has myriad services. New sites keep popping up daily. It is almost trivial for anyone to create an Internet presence. So, even as services mushroom, the growth of the Internet in Indonesia is hobbled by the lack of connected access devices. The starting prices of computers have come down and income levels for the middle-class have gone up. Yet, people have not adopted computers like they have done with mobiles. I think there are two reasons for this beyond the affordability dimension. First, they lack desirability; they are not "must-have" devices. And second, they are perceived to be complicated to operate.
One could argue that the new generation of mobiles are in fact multimedia computers. While that's partly true, the experience of the big keyboard and display of a computer cannot be replicated with today's mobile devices. One can imagine "teleputers" - mobile phones which have the ability to connect to external keyboards and to large external displays. But that's not available today and perhaps lie some years into the future...or may be tomorrow? Again, next question - what's needed for the PC-based Internet to take off in Indonesia is a solution that combines the affordability and the manageability of mobile devices? With such a solution, it will be possible to take computing to another 100 million Indonesian homes in the next five years.
There are around 80 million mobile users in Indonesia, but only just over 1% of them use their mobiles for Internet access. Of course, not all mobiles have the ability to access the Net, but from a technology standpoint, I would estimate that at least more than 50% of the phones in Indonesia on GSM and CDMA would be able to access the Internet. And yet, few of us do. We seem quite happy just using the mobile for phone calls and SMSes. Some of us use the operator portals to get ringtones, wallpapers and games. But that's about it. Where is the campaign? Again chicken and egg situation that I will discuss in other topic.
There are a number of reasons. First, while CDMA phones have a convenient "easy button" (press the button) to access a portal, the GSM phones need some extra configuration to get connected over GPRS. Second, mobile operators want to keep the users who do get connected within their walled gardens. So, they become the gatekeepers for the services. So much so, it is almost impossible for any independent service provider to create a portal that can be accessed by all users who have active data connections. Third, short-sighted pricing plans for data ensure that the ones who do want open access will have to pay a high price for it. In addition, no one in Indonesia is really promoting the mobile Internet. Mobile operators are busy focused on new customer acquisition - after all, every new $3 ARPU (average revenue per user - per month) customer adds anywhere between $300-600 to their market cap! The handset makers like Nokia, SonyEricsson and other fancy mobile devices focus mostly on features that are native on the handset - like a great music experience. The mobile value-added service players have still not gone out and determinedly create independent off-deck brands which attract users - presumably, because they know few can access them as of now.
Put it all together and we have a mobile Internet that has neither users nor services. Can the mobile become like a magic lamp - fulfilling all our wishes? What are these wishes? Sample, when again latest Nokia N95i ad asks if "is this is what computers have become", why don't we feel like going out and buying one? Is there really an opportunity for mobile data services beyond the downloadable ringtones, wallpapers and games?
For the mobile Internet to happen, mobile operators need to believe that Data, not Voice, will change the direction of the ARPU trajectory - assuming of course that ARPU matters. In Indonesia, currently, everyone is happy focusing only on the minutes of usage...even for FREE! A time will come - in the not too distant future - when voice will go to zero-margin - and then to zero (although some operators already playing that campaign). It is for that world that mobile operators need to learn from the PC Internet - that creating an open platform can foster innovation in a way no closed environment can. Indonesian mobile operators need to think of themselves as running two businesses. One targeted at top and middle Indonesian, and the other at bottom of the pyramid Indonesian. While the latter has huge growth potential (an untapped market of 270-300 million Indonesianns in the next 2 years), the former is stagnant, addressing a saturated market with flat ARPUs and little growth. All of the mobile operators' strengths are in building out the user base in Indonesia.
They have done this very well in the past few years and continue to do so. They also have plenty of work left in this regard - hundreds of millions of Indonesians left out of the telecom revolution are finally going to get connected. Creating the infrastructure to get these millions on the network is a huge challenge. In doing so, they need to rethink their role for the existing user base. This user base has been 'mobile' for a few years now and are hungry for new services. Indonesia has a world-class wireless data infrastructure but it is barely talked about. By closing their walled gardens, the mobile operators are making a big mistake. This user base can pay a lot more - after all, there were many who paid Rp.1,500-1,800 per minute for phone calls (GSM). Somehow, they have money to spend. But the services available to them are limited - even though for many, the mobile is the primary or even the only interactive device in their lives.
Mobile operators need to do two things to make the mobile Internet a reality in Indonesia for the first user base. First, they need to open up their data networks so consumers can go to any website they desire. Second, they should encourage the creation of a cornucopia of services by creating a business model which has more favorable revenue share terms for the service providers. Mobile operators can still make a lot of money - and I would argue, that this will be a magnitude higher than what they do today - by billing consumers for data traffic on open access. In other words, instead of thinking of themselves as "media" and worrying that they will just become "bitpipes" - mobile operators need to think of themselves as "services pipes". If they do this, consumers will see them as the genie that made the mobile into a magic lamp.
There is a lot at stake for Indonesia to grow more. The Internet is core and necessary digital infrastructure if we are to continue to develop. Home computers and mobiles are the two necessary devices which will become the windows to the world of services. Even though we are not there yet, forward-thinking organisations and entrepreneurs can take us there.
Next question - regulatory issues? Anybody want to continue this?
There are, in reality, two Internets - segmented by the access device and the type of connectivity. Sample in Indonesia, PC-based wireline Internet has about 20-30 million users (ref. data from APJII - Indonesia Internet Association), with a majority of the users using cybercafes. With only 4-6 million computers in Indonesian homes, this Internet is still a long way from becoming a utility in people's lives. The mobile-centric wireless Internet can potentially reach a significant portion of around 150 million cellphone users in Indonesia. However, the reality is that other than voice, there are only two services which touch a large fraction of this user base - SMS and ringback tones (sample of Value Added Services). The mobile-as-Indonesian's-computer paradigm still has a long way to go. Looking at it another way, for the real boom, the wireline Internet needs more devices (home computers) and the mobile Internet needs more services. What will it take to make both happen?
Somehow, to solve the device problem, one needs to rethink computing in a world where broadband exists - and thus make computers affordable and manageable. For this, the answers lie in borrowing two ideas from the mobile industry - create a device that costs very minimal and combine it with a reasonable monthly service charge, and make the device simple to use without requiring its owner to become a technology expert!
The solution to these twin challenges lies in thinking 'thin' computers for Indonesian homes - connected over DSL or cable to servers over high-speed networks. All the computational processing is done at the server-end, and the network computers become simple 'on-off' devices - without compromising on the performance that current desktop computers offer. To make the mobile Internet a reality in Indonesia, two changes need to happen, and they have to be driven by the mobile operators since they are the 'gatekeepers.' First, an open publishing platform is needed to allow anyone to create a mobile website that is accessible by everyone - just like on the PC Internet. Next question - HOW?
Second, mobile operators need to change their billing philosophy for value-added services. The bulk of the revenue that users pay must be given to the content providers. Mobile operators should, instead, charge for packet data flow through their 'pipes.' At a broader level, just like NTT Docomo did with its i-mode service in Japan in 1999, Indonesian mobile operators need to encourage the creation of a value-generating ecosystem. Taken together, these innovations can help build Indonesia's digital infrastructure, create a framework for other emerging markets to emulate and provide a large domestic market for companies to finally think Indonesia First... well, as one of the biggest market potential in Southeast Asia.
Because of the low home computer base in Indonesia, people largely use cybercafes to access the internet, paying between Rp.1,500 - Rp.10,000 per hour. Broadband access in Indonesia has been slow to grow - in part because most new investments have focused on the mobile infrastructure. But the bigger issue has been that the new home computer market is only a couple of million. That severely limits the target market for broadband providers. (Yes, there are about 5-10 million computers still not connected by broadband. If these people have not gotten broadband access to the Internet now, then I can only surmise that either access is not available or they have no reason to get one). Of course, broadband in Indonesia is not really broadband YET. Although the advertised bandwidth may be 256 or even 512 Kbps, actual speeds are often a fraction of that. Furthermore, since access plans often have very low data transfer limits, broadband in reality is at best an (almost) always-on narrowband connection.
Internet has myriad services. New sites keep popping up daily. It is almost trivial for anyone to create an Internet presence. So, even as services mushroom, the growth of the Internet in Indonesia is hobbled by the lack of connected access devices. The starting prices of computers have come down and income levels for the middle-class have gone up. Yet, people have not adopted computers like they have done with mobiles. I think there are two reasons for this beyond the affordability dimension. First, they lack desirability; they are not "must-have" devices. And second, they are perceived to be complicated to operate.
One could argue that the new generation of mobiles are in fact multimedia computers. While that's partly true, the experience of the big keyboard and display of a computer cannot be replicated with today's mobile devices. One can imagine "teleputers" - mobile phones which have the ability to connect to external keyboards and to large external displays. But that's not available today and perhaps lie some years into the future...or may be tomorrow? Again, next question - what's needed for the PC-based Internet to take off in Indonesia is a solution that combines the affordability and the manageability of mobile devices? With such a solution, it will be possible to take computing to another 100 million Indonesian homes in the next five years.
There are around 80 million mobile users in Indonesia, but only just over 1% of them use their mobiles for Internet access. Of course, not all mobiles have the ability to access the Net, but from a technology standpoint, I would estimate that at least more than 50% of the phones in Indonesia on GSM and CDMA would be able to access the Internet. And yet, few of us do. We seem quite happy just using the mobile for phone calls and SMSes. Some of us use the operator portals to get ringtones, wallpapers and games. But that's about it. Where is the campaign? Again chicken and egg situation that I will discuss in other topic.
There are a number of reasons. First, while CDMA phones have a convenient "easy button" (press the button) to access a portal, the GSM phones need some extra configuration to get connected over GPRS. Second, mobile operators want to keep the users who do get connected within their walled gardens. So, they become the gatekeepers for the services. So much so, it is almost impossible for any independent service provider to create a portal that can be accessed by all users who have active data connections. Third, short-sighted pricing plans for data ensure that the ones who do want open access will have to pay a high price for it. In addition, no one in Indonesia is really promoting the mobile Internet. Mobile operators are busy focused on new customer acquisition - after all, every new $3 ARPU (average revenue per user - per month) customer adds anywhere between $300-600 to their market cap! The handset makers like Nokia, SonyEricsson and other fancy mobile devices focus mostly on features that are native on the handset - like a great music experience. The mobile value-added service players have still not gone out and determinedly create independent off-deck brands which attract users - presumably, because they know few can access them as of now.
Put it all together and we have a mobile Internet that has neither users nor services. Can the mobile become like a magic lamp - fulfilling all our wishes? What are these wishes? Sample, when again latest Nokia N95i ad asks if "is this is what computers have become", why don't we feel like going out and buying one? Is there really an opportunity for mobile data services beyond the downloadable ringtones, wallpapers and games?
For the mobile Internet to happen, mobile operators need to believe that Data, not Voice, will change the direction of the ARPU trajectory - assuming of course that ARPU matters. In Indonesia, currently, everyone is happy focusing only on the minutes of usage...even for FREE! A time will come - in the not too distant future - when voice will go to zero-margin - and then to zero (although some operators already playing that campaign). It is for that world that mobile operators need to learn from the PC Internet - that creating an open platform can foster innovation in a way no closed environment can. Indonesian mobile operators need to think of themselves as running two businesses. One targeted at top and middle Indonesian, and the other at bottom of the pyramid Indonesian. While the latter has huge growth potential (an untapped market of 270-300 million Indonesianns in the next 2 years), the former is stagnant, addressing a saturated market with flat ARPUs and little growth. All of the mobile operators' strengths are in building out the user base in Indonesia.
They have done this very well in the past few years and continue to do so. They also have plenty of work left in this regard - hundreds of millions of Indonesians left out of the telecom revolution are finally going to get connected. Creating the infrastructure to get these millions on the network is a huge challenge. In doing so, they need to rethink their role for the existing user base. This user base has been 'mobile' for a few years now and are hungry for new services. Indonesia has a world-class wireless data infrastructure but it is barely talked about. By closing their walled gardens, the mobile operators are making a big mistake. This user base can pay a lot more - after all, there were many who paid Rp.1,500-1,800 per minute for phone calls (GSM). Somehow, they have money to spend. But the services available to them are limited - even though for many, the mobile is the primary or even the only interactive device in their lives.
Mobile operators need to do two things to make the mobile Internet a reality in Indonesia for the first user base. First, they need to open up their data networks so consumers can go to any website they desire. Second, they should encourage the creation of a cornucopia of services by creating a business model which has more favorable revenue share terms for the service providers. Mobile operators can still make a lot of money - and I would argue, that this will be a magnitude higher than what they do today - by billing consumers for data traffic on open access. In other words, instead of thinking of themselves as "media" and worrying that they will just become "bitpipes" - mobile operators need to think of themselves as "services pipes". If they do this, consumers will see them as the genie that made the mobile into a magic lamp.
There is a lot at stake for Indonesia to grow more. The Internet is core and necessary digital infrastructure if we are to continue to develop. Home computers and mobiles are the two necessary devices which will become the windows to the world of services. Even though we are not there yet, forward-thinking organisations and entrepreneurs can take us there.
Next question - regulatory issues? Anybody want to continue this?
Sunday, January 6, 2008
Next Generation Mobile Phones
Among all the topics that I have covered in my journals, one of the lesser covered areas has been that dealing with mobile phones. There is a simple explanation for this - until recently, the age of my cellphone was 2 years! I lived frozen in time when it came to my mobile phone. For me, it was a useful communications tool - but just that. I used it to make and receive voice calls - few and far between. I found sending SMS to be major pain, somehow. (I may be a two-finger typist on a keyboard, but I am a fast one at that! The cellphone keypad (especially my SonyEricsson W880i)- well, I just couldn't find myself writing shorthand English or doing it fast enough).
When I accessed the Web recently on my mobile phone and configured my google mail application to access my personal email account, I could not but feel the same sense of exhilaration that I had sensed when I first browsed the Internet more than a decade ago using Mosaic from a friend's house in the Indonesia. This is another new world that is emerging, and for all that has been talked and written about the world of mobility, we are at the start of a revolution which will have far-reaching implications.
This is not just about voice and communications, and the freedom to do talk and SMS from anywhere. Just like the functionality and use of PCs was completely transformed with the emergence of the Internet, so it will be with mobile phones. Until now, for the vast majority, the phone has been a communications device. In fact, even more than the 'personal' computer, it is the mobile phone that is the truly personal device. There is nary a place that owners go without their phone. I have seen people walk into my office for meetings carrying only a phone and nothing else (not even a pen or a watch, leave alone a writing pad).
From a time when I was barely connected (a computer at home and office; no notebook) to now when I have become arguably one of the most connected people has been a short ride. I have a Sony Vaio UX Series UMPC notebook running Windows XP. It has three forms of in-built connectivity: Ethernet, dial-up and Wi-Fi...cool gadget!
Now, the question is - will the mobile phone become the next platform - like the computer? This, according to me, is a narrow question and focuses only on the device. What is important is to consider a view of the world that is based around services rather than devices. In that context, I don't think it is possible to think of the mobile phone in isolation from the rest of the computing, communications and content world.
What is inside today's desktop computer will move to the server and what is inside a cell phone will power tomorrow's network computer. The networks will be IP-based. Voice will become yet another service over these digital networks. The mobile phone will be our constant companion, and will be complemented by the availability of network computers with large screens.
Services will occupy centre-stage. From commPuting to computainment to communicontent, it will be a world that will converge at the back-end (server-side) but will diverge at the front-end (multiple devices). While there will be no convergence across these screens, the convergence will happen at the back-end with respect to the data store. We will have different views to the same set of data across these devices. Today, this is not the case - all three devices have their own private worlds they operate on.
What I see happening is integrated access to our data and desktop across the three screens that are present in our life. The future will be about data on servers accessible across multiple devices. In developed markets, the screens will be those of the TV or Game Console or PC or mobile phone. In emerging markets (especially for the next users), I think it will just two screens - a multimedia-enabled network computer on desktops at home and work, and the mobile phone. What matters are the services that are delivered to the users.
Service-centric computing is a form of computing (used in a broad sense - like information processing) which is focused more around the user's real world rather than the cyberspace. It has a common back-end store to store the user's context (time, place, information, people). It allows a user to do five actions independent of device on the same data store: publish (write), subscribe (read), search, alerts and share. It thus breaks the artificial barriers which separate the user from his data - by actually separating data store from the service functions, we make the data more accessible.
While the mobile phone is likely to have a much larger user base than computers in emerging markets for some time to come, there are tasks for which the computer is ideally suited and the inherent limitations of the cellphone become obvious. But that in no way diminishes its use or capability as a personal device. Thus, even as the computer provides access to the world outside, the mobile phone provides us a view of our world. Both are needed and important in their own place.
Now what will be next? For me, I just can't go without my mobile phones...
When I accessed the Web recently on my mobile phone and configured my google mail application to access my personal email account, I could not but feel the same sense of exhilaration that I had sensed when I first browsed the Internet more than a decade ago using Mosaic from a friend's house in the Indonesia. This is another new world that is emerging, and for all that has been talked and written about the world of mobility, we are at the start of a revolution which will have far-reaching implications.
This is not just about voice and communications, and the freedom to do talk and SMS from anywhere. Just like the functionality and use of PCs was completely transformed with the emergence of the Internet, so it will be with mobile phones. Until now, for the vast majority, the phone has been a communications device. In fact, even more than the 'personal' computer, it is the mobile phone that is the truly personal device. There is nary a place that owners go without their phone. I have seen people walk into my office for meetings carrying only a phone and nothing else (not even a pen or a watch, leave alone a writing pad).
From a time when I was barely connected (a computer at home and office; no notebook) to now when I have become arguably one of the most connected people has been a short ride. I have a Sony Vaio UX Series UMPC notebook running Windows XP. It has three forms of in-built connectivity: Ethernet, dial-up and Wi-Fi...cool gadget!
Now, the question is - will the mobile phone become the next platform - like the computer? This, according to me, is a narrow question and focuses only on the device. What is important is to consider a view of the world that is based around services rather than devices. In that context, I don't think it is possible to think of the mobile phone in isolation from the rest of the computing, communications and content world.
What is inside today's desktop computer will move to the server and what is inside a cell phone will power tomorrow's network computer. The networks will be IP-based. Voice will become yet another service over these digital networks. The mobile phone will be our constant companion, and will be complemented by the availability of network computers with large screens.
Services will occupy centre-stage. From commPuting to computainment to communicontent, it will be a world that will converge at the back-end (server-side) but will diverge at the front-end (multiple devices). While there will be no convergence across these screens, the convergence will happen at the back-end with respect to the data store. We will have different views to the same set of data across these devices. Today, this is not the case - all three devices have their own private worlds they operate on.
What I see happening is integrated access to our data and desktop across the three screens that are present in our life. The future will be about data on servers accessible across multiple devices. In developed markets, the screens will be those of the TV or Game Console or PC or mobile phone. In emerging markets (especially for the next users), I think it will just two screens - a multimedia-enabled network computer on desktops at home and work, and the mobile phone. What matters are the services that are delivered to the users.
Service-centric computing is a form of computing (used in a broad sense - like information processing) which is focused more around the user's real world rather than the cyberspace. It has a common back-end store to store the user's context (time, place, information, people). It allows a user to do five actions independent of device on the same data store: publish (write), subscribe (read), search, alerts and share. It thus breaks the artificial barriers which separate the user from his data - by actually separating data store from the service functions, we make the data more accessible.
While the mobile phone is likely to have a much larger user base than computers in emerging markets for some time to come, there are tasks for which the computer is ideally suited and the inherent limitations of the cellphone become obvious. But that in no way diminishes its use or capability as a personal device. Thus, even as the computer provides access to the world outside, the mobile phone provides us a view of our world. Both are needed and important in their own place.
Now what will be next? For me, I just can't go without my mobile phones...
Saturday, January 5, 2008
China in The Future
Another copy from my Facebook journal -
Somehow, I just imagine - in emerging markets like China, there are five elements that need to come together to provide an end-to-end solution for computing and connectivity.
First, build a city-wide wireless mesh network. This will provide the connectivity fabric and provide an alternative to getting DSL or cable (or waiting for WiMax).
Second, use a variety of access devices to connect to the network. These could be PCs or network computers. We will also see mobile devices like the brand new Nokia or SonyEricsson and phones with Wi-Fi built in connecting to the mesh network.
Third, provide a backend computing and storage grid. This helps centralise computing and provides for seamless mobility for users. It also makes computing much more affordable and manageable.
Fourth, provide applications and content from a centralised grid to users over the wireless mesh networks.
Finally, use advertising to reduce the price that users have to pay for the service. The key is to be able to offer the base service for no more than $10 a month for the entire solution (device, connectivity and services), with additional revenue possible through value-added services.
This is what will make computing and the Internet take off in China. At minimum fees a month, computing will become much more affordable. The wireless mesh networks help in rapid deployment. Customers can buy the access device (PC or network computer) independently and 'plug' it into the wireless envelope. China needs to rapidly proliferate broadband and computers across homes, schools and small- and medium-sized enterprises.
The use of network computers along with city wireless networks is a giant step in bringing tomorrow's world to life. From a laggard in broadband and computing, China can be a leader in this space - and a beacon for other emerging markets.
Next questions - when and where?
Somehow, I just imagine - in emerging markets like China, there are five elements that need to come together to provide an end-to-end solution for computing and connectivity.
First, build a city-wide wireless mesh network. This will provide the connectivity fabric and provide an alternative to getting DSL or cable (or waiting for WiMax).
Second, use a variety of access devices to connect to the network. These could be PCs or network computers. We will also see mobile devices like the brand new Nokia or SonyEricsson and phones with Wi-Fi built in connecting to the mesh network.
Third, provide a backend computing and storage grid. This helps centralise computing and provides for seamless mobility for users. It also makes computing much more affordable and manageable.
Fourth, provide applications and content from a centralised grid to users over the wireless mesh networks.
Finally, use advertising to reduce the price that users have to pay for the service. The key is to be able to offer the base service for no more than $10 a month for the entire solution (device, connectivity and services), with additional revenue possible through value-added services.
This is what will make computing and the Internet take off in China. At minimum fees a month, computing will become much more affordable. The wireless mesh networks help in rapid deployment. Customers can buy the access device (PC or network computer) independently and 'plug' it into the wireless envelope. China needs to rapidly proliferate broadband and computers across homes, schools and small- and medium-sized enterprises.
The use of network computers along with city wireless networks is a giant step in bringing tomorrow's world to life. From a laggard in broadband and computing, China can be a leader in this space - and a beacon for other emerging markets.
Next questions - when and where?
Friday, January 4, 2008
Battle of Giants - West vs East (Long Journal)
It has been a fascinating year in 2007. A number of events have focussed attention on the Internet and the future. I had originally intended to write a column to look at ten years of the Internet and mobile phones in Southeast Asia. But I'll take up that discussion later.
The first was Baidu's IPO. Baidu is China's leading search engine. The perception that it is "China"s Google' set the stock on fire on its opening day as it rose from around $30 to over $150. (It has since settled at around $80 giving it a market cap of $2.5 billion.) Baidu raised over $100 million. For a brief period, it seemed like the dotcom heydays once again as discussions on revenues and profits were set aside. Investors who perhaps missed out on Google's IPO last year don't want to be left out! Another, Yahoo invested a billion dollars and handed over its Chinese operations to the local Alibaba management in return for a 40% stake in Alibaba. The deal valued Alibaba at $4 billion. Alibaba's flagship site is a marketplace for SMEs - helping Chinese SMEs sell to others in China and globally. Alibaba also operates two other sites: Taobao is a consumer auctions sites (in direct competition with eBay in China), and AliPay, which is a payments and settlement service along the lines of PayPal.
I have followed the fortunes of Alibaba since its early days. I liked the idea of an SME marketplace very much. At that time, Global Sources was the leader in the print media in helping connect SMEs. Alibaba raised a lot of money and went through many ups and downs in its journey. (There are two Harvard Business School case studies on Alibaba's early days.) Alibaba has crossed one mountain - another lies just ahead.
The battle for the China Internet market has been joined in earnest. Google may have a small stake (around 3%) in Baidu but will no doubt be looking for a bigger slice. eBay, which was also rumoured to be in the race to acquire or partner with Alibaba, will be contemplating its next move - hoping to ensure that the history in Japan (where Yahoo is the leader in the auctions space) does not play out again in China. For now, at least, the two events together put the spotlight firmly on the potential of the Chinese Internet. There are over 100 million Internet surfers and broadband penetration is increasingly rapidly. Baidu joins the likes of Sina, Sohu, Netease and Shanda in monetising the growing user base. The mobile users base in China is at over 350 million.
But, next logical question is: what is the end-game? Where are we heading towards? I can think of the answer from a the "Mirror Worlds". Mirror Worlds are what David Gelernter proposed in his book of the same name in 1991. (Another related theme is the Metaverse idea put forth by Neal Stephenson is his 1992 book "Snow Crash").
Today, I use Google as the window to the world of information. But search is just one way to navigate the web. Consider the analogy with a printed book. A book has 3 ways to browse it: table of contents (think of this as a directory or outline), index (the equivalent of search), or jumping to a page (typing a specific URL or finding it, quite literally, via a bookmark). On the Web, the index/search option has become the primary mechanism. For example, if my passion is science fiction, I am likely to have created a set of links and comments on books and ideas which would also be relevant to others interested in that topic. Others can 'include' my directory and build further.
Mirror Worlds are, quite literally, a replica of what I see happening around us. With a mix of user-generated content from their mobiles along with webcams and sensors, it will be possible to almost recreate the real world in the Grid. Mirror Worlds are, thus, microcosms of all that we see around us as updated as the real world that they resemble. They are accessible to us through screens on the devices we have our mobiles, computers, and perhaps, networked TVs.
This, then, is what I read in last year (2007). Emerging markets like China is where the future of the Internet lies. Google's actions only highlight the need for a Google for Emerging Markets - one that has to emerge from these markets themselves. That is the next big opportunity. This New Internet is going to be significantly different from what we have seen in the past decade. The time to get started to building it out is now.
What next?
The first was Baidu's IPO. Baidu is China's leading search engine. The perception that it is "China"s Google' set the stock on fire on its opening day as it rose from around $30 to over $150. (It has since settled at around $80 giving it a market cap of $2.5 billion.) Baidu raised over $100 million. For a brief period, it seemed like the dotcom heydays once again as discussions on revenues and profits were set aside. Investors who perhaps missed out on Google's IPO last year don't want to be left out! Another, Yahoo invested a billion dollars and handed over its Chinese operations to the local Alibaba management in return for a 40% stake in Alibaba. The deal valued Alibaba at $4 billion. Alibaba's flagship site is a marketplace for SMEs - helping Chinese SMEs sell to others in China and globally. Alibaba also operates two other sites: Taobao is a consumer auctions sites (in direct competition with eBay in China), and AliPay, which is a payments and settlement service along the lines of PayPal.
I have followed the fortunes of Alibaba since its early days. I liked the idea of an SME marketplace very much. At that time, Global Sources was the leader in the print media in helping connect SMEs. Alibaba raised a lot of money and went through many ups and downs in its journey. (There are two Harvard Business School case studies on Alibaba's early days.) Alibaba has crossed one mountain - another lies just ahead.
The battle for the China Internet market has been joined in earnest. Google may have a small stake (around 3%) in Baidu but will no doubt be looking for a bigger slice. eBay, which was also rumoured to be in the race to acquire or partner with Alibaba, will be contemplating its next move - hoping to ensure that the history in Japan (where Yahoo is the leader in the auctions space) does not play out again in China. For now, at least, the two events together put the spotlight firmly on the potential of the Chinese Internet. There are over 100 million Internet surfers and broadband penetration is increasingly rapidly. Baidu joins the likes of Sina, Sohu, Netease and Shanda in monetising the growing user base. The mobile users base in China is at over 350 million.
But, next logical question is: what is the end-game? Where are we heading towards? I can think of the answer from a the "Mirror Worlds". Mirror Worlds are what David Gelernter proposed in his book of the same name in 1991. (Another related theme is the Metaverse idea put forth by Neal Stephenson is his 1992 book "Snow Crash").
Today, I use Google as the window to the world of information. But search is just one way to navigate the web. Consider the analogy with a printed book. A book has 3 ways to browse it: table of contents (think of this as a directory or outline), index (the equivalent of search), or jumping to a page (typing a specific URL or finding it, quite literally, via a bookmark). On the Web, the index/search option has become the primary mechanism. For example, if my passion is science fiction, I am likely to have created a set of links and comments on books and ideas which would also be relevant to others interested in that topic. Others can 'include' my directory and build further.
Mirror Worlds are, quite literally, a replica of what I see happening around us. With a mix of user-generated content from their mobiles along with webcams and sensors, it will be possible to almost recreate the real world in the Grid. Mirror Worlds are, thus, microcosms of all that we see around us as updated as the real world that they resemble. They are accessible to us through screens on the devices we have our mobiles, computers, and perhaps, networked TVs.
This, then, is what I read in last year (2007). Emerging markets like China is where the future of the Internet lies. Google's actions only highlight the need for a Google for Emerging Markets - one that has to emerge from these markets themselves. That is the next big opportunity. This New Internet is going to be significantly different from what we have seen in the past decade. The time to get started to building it out is now.
What next?
Next Generation of Computing
Just for thinking - wondering, right from using regular desktops in cybercafes to owning (or renting) cheaper desktops and network computers to using mobile phones to connect over wireless networks, the next billion users will have something they have never had before in computing: choice. That's perhaps the best thing to have happened from the attention that is being lavished on the "bottom of the pyramid". Having said that, not all solutions are equal. My bet is on two solutions to emerge winners over the coming years: mobiles and network computers. The common thread to both is the dependency on a network.
To understand why I think these network devices will emerge as winners, it is important to understand that the problem with today's computing solutions is not just about affordability. It is also about manageability. Complexity in computing has increased, not decreased, over the years. Users have to become their own system administrators to ensure their computers stay clean and secure. The next users are not going to be as savvy as the first set of users in managing their computers.
Into this brave new world, the disruption to be leveraged is the world of communications. Both wired and wireless broadband networks are being deployed in emerging markets. Given the importance of Internet access and the coming era of software-as-a-service, the computer's role is now more of a window to the world of information residing in the network.
In addition, almost every new user of computing in developing nations is likely to be already using a mobile phone. After voice, SMS, and not email, is the preferred form of communication. Buddy lists are not maintained in instant messaging clients on PCs but on the mobile. The mobile as the user's first interactive "personal" device in emerging markets is a very different scenario from the developed markets, where it was the PC which came first.
Tomorrow's world will, therefore, revolve around computing and information which happens in the network (the "cloud"), with the users having access to two devices: a small screen mobile phone which they carry with them all the time, and a bigger screen desktop-based terminal which connects over a broadband network to which they have intermittent access. Both devices have their strengths. The big screen is better for applications which are input-output-intensive and require multimedia. The mobile is with us all the time and can be used during life's empty moments.
This is not to say that the OLPC and other initiatives will fail. I think they will succeed in specific areas but they will not become the mass-market successes that emerging markets need. For that, my bets are around the mobile for internet access and network computing. So, happy surfing!
To understand why I think these network devices will emerge as winners, it is important to understand that the problem with today's computing solutions is not just about affordability. It is also about manageability. Complexity in computing has increased, not decreased, over the years. Users have to become their own system administrators to ensure their computers stay clean and secure. The next users are not going to be as savvy as the first set of users in managing their computers.
Into this brave new world, the disruption to be leveraged is the world of communications. Both wired and wireless broadband networks are being deployed in emerging markets. Given the importance of Internet access and the coming era of software-as-a-service, the computer's role is now more of a window to the world of information residing in the network.
In addition, almost every new user of computing in developing nations is likely to be already using a mobile phone. After voice, SMS, and not email, is the preferred form of communication. Buddy lists are not maintained in instant messaging clients on PCs but on the mobile. The mobile as the user's first interactive "personal" device in emerging markets is a very different scenario from the developed markets, where it was the PC which came first.
Tomorrow's world will, therefore, revolve around computing and information which happens in the network (the "cloud"), with the users having access to two devices: a small screen mobile phone which they carry with them all the time, and a bigger screen desktop-based terminal which connects over a broadband network to which they have intermittent access. Both devices have their strengths. The big screen is better for applications which are input-output-intensive and require multimedia. The mobile is with us all the time and can be used during life's empty moments.
This is not to say that the OLPC and other initiatives will fail. I think they will succeed in specific areas but they will not become the mass-market successes that emerging markets need. For that, my bets are around the mobile for internet access and network computing. So, happy surfing!
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