Tomorrow's Phone Company

Tom Evslin writes:

I do think that eBay may be your next phone company. Or Google. Or Yahoo. Or MSN. Microsoft Windows Server System may, someday, include, an IP PBX. I just don’t think that any of them will make any money directly by being a phone company. They are being forced into offering voice service by an arms race with each other. Great for us talkers, not so great for providers.

If you want to know the future of voice communication, look at the history of email. Once upon a time email was offered on closed networks. MCI Mail even charged by the “MCI ounce” – a thousand characters. AT&T bought Western Union EasyLink so that Ma Bell could become the post office of commercial email. Trouble is that email doesn’t require a post office. It travels over the Internet between sending and receiving server directly. Enterprises own their own sending and receiving servers. Individuals share the sending and receiving servers of their ISPs or of Yahoo, MSN, or Google (you can usually tell whose server someone is using by their email address, of course). We think of email as being free because there is no incremental cost per message.

IP Voice communication (VoIP) doesn’t require network intermediaries any more than email does. That’s why Skype could afford to provide free Skype-to-Skype calling. With a tiny bit of distributed directory help, the caller’s machine can talk directly to the callee’s machine. There is money to be made in switching calls between VoIP to POTS (Plain Old Telephone Service) because that switching requires a lot of server power and business relationships (that’s part of what my old company, ITXC, did). SkypeOut and Vonage both charge their users in one way or another for these calls which are leaving their networks.

Web 2.0 Apps Mash-up

[via Richard MacManus] Phil Wainewright writes:

...The command-economy development programs of individual software vendors, however extensive and well-funded they may be, cannot possibly prevail against the sheer innovative diversity and economic efficiency of the Web 2.0 ecosystem. But even Web 2.0 has to be able to offer its own version of "one throat to choke, one stack to manage" before it can win through. There have to be platforms and marketplaces that impose rules and standards of behavior against which customers can hold participants in the ecosystem to account.

Imagine the power those ecosystem platforms will hold. These are the vendors whose influence will dominate the Web 2.0 landscape. That's why, before the great Web 2.0 application mash-up can begin, there will be an almighty smash-up between the competing contenders. Several are already in the fray, but with markedly different approaches, while others have yet to make their moves.
...
At present, the dream of composing an enterprise application stack from mix-and-match services is really only possible within a tightly controlled architecture built entirely by a single organisation, which kind of defeats one of the principal objects of building it that way in the first place. As Jeff Schneider, another service-oriented blogger, noted last week, "Services will be built, bought, leased and borrowed. Recombining services, from anywhere, for value-add solutions is at the heart of a Service Oriented Enterprise." Marketplaces will come into being to fulfil that demand.

Google and Network Computing

News.com writes:

Google's chances also depend on the PC losing its primacy. Oracle's Larry Ellison argued as much when he was out pushing his idea of a network computer. So did Sun Microsystems' Scott McNealy with his mantra that "the network is the computer."

Ellison and McNealy made little headway. But they were just too early. The Internet has scrambled old assumptions by becoming the new platform. How long before everything resides in the "Internet cloud" rather than terrestrial PCs and servers? Maybe not this year or next--but five years hence isn't a stretch.

At the same time, there are now lots of alternative ways to access the Web besides a Windows-based PC. That spells trouble for Microsoft's monopoly franchise, which depends on maintaining the status quo.

Try imagining a future where developers will write to Web platforms without thinking about an individual computer or operating system. That once was Netscape's dream. If this does come to pass, Google could build an ecosystem around itself in much the same way Microsoft did with Windows. If Microsoft's latest moves can't clear out its corporate arteries, the future could be all Google, all the time.

Dashboard Pros and Cons

WSJ writes:

Dashboards themselves don't do complicated number crunching, but they do offer quick and easy access to tons of real-time data generated by other software. As a result, they are changing financial planning and employee oversight at many businesses. About half of 470 financial and information-technology executives surveyed recently by Hyperion Solutions -- a software company that makes dashboards -- had them, and another 30% expect to be using them within the next 12 months.

Not everyone is happy about this latest corporate tool. Some see the dashboard as just one more device that keeps people focused on only this minute, overreacting to short-term realities while ignoring the big picture of productivity and innovation. It also has the potential to spread a "gotcha" culture by closely monitoring managers. In turn, managers under increasing pressure could become so obsessed with the bottom line that they ignore product quality or customer service.

Videonet

Kevin Werbach writes:

The Internet won't completely replace television as we know it. Instead, it will mutate and extend it. Right now we're seeing the long-promised "convergence" play out on two levels. Big phone companies are deploying digital platforms on fiber optic networks to compete with cable operators, who are rushing to add on-demand features in response. To me, though, that's less interesting than the distributed, bottom-up activity around short video clips on the Net and wireless networks. One is about competition; the other is about transformation.

At some point, thanks to VOIP, most of the voice conversations we engage in across the network won't be phone calls. (That's at least part of what eBay/Skype is about.) Similarly, most of the video content we watch won't be television. Those traditional forms will still be around, but they will become specialized, much like radio after the emergence of television.

This is what the incumbents can never appreciate. They are hard coded to assume that voice = phone calls and video = TV. The two great economic drivers of the communications industry, advertisers and users, will have no trouble adapting. AOL, Yahoo!, and Google, each in its own way, cracked the code for harnessing the text Internet as an advertising medium. Those companies, and perhaps others, are bound to do the same for the video Internet. Once they do, look out.

TECH TALK: Web 2.0: Emerging Meme

There has a growing buzz in the developer and entrepreneur community about the emerging meme of Web 2.0. As a sold-out conference with the same name starts in San Francisco this week, we will look at what people are saying about these new ideas and the resulting early services. In fact, some of the conference discussion topics provide a glimpse of tomorrow’s world:

Computing and Operating Systems: Over the past year the idea of the Web as an operating system has been widely debated, but not well understood. It's true that the Web has become the locus of many traditional PC–based computing tasks. But what's next, and how might Microsoft respond? Will Google declare its intent in this space, and what are the opportunities for new businesses?

Media and entertainment: It's been predicted for more than a decade, but 2005 is the year convergence is happening, with a vengeance. What are the implications for the business models of incumbents and startups alike? What are the roles of new platform companies like Google, of distributors like Comcast, and content companies like NBC Universal?

Communication and mobile: The open web model is spreading to the mobile world, but can it conquer the carrier's walled gardens? We'll ask the hardware and content companies, the VOIP providers, and the major incumbents where the mobile web is heading.

The Web 2.0 meme is built on people participation and recombination. It is the realisation of the dream of building Lego-like services from smaller building blocks. The possibilities are immense. Just as the world of content was transformed with Web 1.0 starting in 1994, the way software is developed and services are crafted is now changing. As the Web enters its second decade, it is about to get an upgrade – which will make it look very different from what we see around us today.

Web 1.0 was about browsing and searching. Everyone with content made available their information on the Web. First, it was directories that helped people find the things they were looking for. Now, it is search engines. Paid search and contextual advertising have emerged as revenue streams for both the big search engines as well as the content sites.

Web 2.0 promises to be different. It is currently being driven by user-generated content, APIs and “mash-ups”. And this is just the beginning. What is interesting about the Web 2.0 discussion and services is that it opens up the services field for almost anyone with imagination and programming expertise. The imagination is for thinking up new ways to combine the APIs that others are making available. That then has to be converted into software and a platform that others can not only access but also build upon.

It is as if someone waved a magic wand and the sense of gloom of the past few years that had descended on the software developer community disappeared. Instead, there is increasing optimism on what can be done and a feeling that the real Web – powered by the people and for the people – is upon us. It is a time for innovation – with a belief that the best ideas will be richly rewarded.

This also has significant implications for emerging markets like India. For the most part, India has not seen a wide variety of services on the Internet in the first decade. Even though there are an estimated 25-30 million users in India, services that make a big difference to daily life are few and far between. Indian companies have the opportunity to leapfrog by picking the best ideas from the emerging Web 2.0 meme.

Tomorrow: The Past Year

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