The Networked Technology world in 2019

On Friday we looked at the 8 big trends in the networked technology space over the last 10 years (1999 - 2009). Today, as promised, we look at the trends over the next 10. In some ways its easier to think about 10 years rather than 2-3 years out as (i) you can see the big trends more easily and (ii) no one will remember this in 2019 unless we're very right .

A little digression, if I may. Bill Gates once said that things change more slowly in 2 years than people (and their business cases) want, but far faster in 10. My observation is that this is very true in consumer technology, less true in business technology, less again in the public sector, and public behaviour and structures change but slowly. We also have a model that says technology merely provides opportunity, its the economics, user behaviour and legal restrictions that drive uptake,

For example, VOIP was technically feasible in 2000, but it was only in 2003/4 that enough people had good enough bandwidth, and PCs were cheap enough, for it to "piggy back" on top of pre-paid for assets (your broadband connection, PC with microphone and speakers etc).

Anyway, enough of that - what what happens to the 8 trends we saw in the previous decade rolling forward? They were:


1. Bandwidth will carry on expanding

Given we have had a c 30x increase in the last 10 years, projecting that forward implies a mean of c 60 Mbps by 2019 in the UK. From about 20 Mbps per home upwards, you are talking multiple streams of HD video into a household so that allows the exciting prospect of everyone indoors watching their own HDTV channel, instead of TV channel as they do today. Plus ca change.

More to the point is that expanding bandwidth will drive richer applications, which we comment on below in points 2-4.

Critical to this will be whether the "frontbones" - the networks to the home - can take it. In countries where Government diktat has ruled rollout, this will happen. In those using "the market" it will (probably) happen - but later. The Digital Britain hoo-ha pretty much showed that the market will want to sell to the (urbanised, wealthy) 1/3rd of the population off its own bat, may then expand to the next 1/3rd but won't want to touch the last (poorer, rural, older) 1/3rd. Towards the mid 20-teens ("Twenteens"?) even the most market oriented of Governments will realise that to be competitive they need universal high bandwidth access and will force the issue.


2. Talking to each other will remain the Killer App

We don't know with certainty what New New Platforms will come after Twitter or Facebook, or what the successor of Web 2.0 - sorry, Web-squared - will be (though we have some ideas - see below). But what we do know is that it will revolve around P2P - person to person - communication. Always has, always will.

So, we will predict that whatever new platforms, technologies, etc etc emerge - and despite the resurrection of the standard old advertising and e-commerce use cases (see "you can find a great restaurant with your friends" below) - the killer application will remain enabling small world social networks of people to communicate.

This of course does not mean it will make the most money directly, as we saw in the 'Noughties that game went to being able to place low cost Ads against weak buying intention signals. But comms will still be the killer app driving people onto end to end platforms.


3. Our "Social Networks" evolve onto whatever the best platform of the moment is

An inevitable corollary of 2 above - given talking to each other is the killer application - the next need is to enable a "clearing system" to find people you want to talk to. The rate of change of Social Networks in the last 10 years - from email groupware to near real time video chatrooms - has been fairly predictable big picture (same function, different bandwidth), but - as always - it's hard to define at a detailed UI level just which design will succeed. The mayfly like existence of each new social network (2 year half life) means that (i) there is still massive innovation going on and (ii) the ones we have now will pass too.

The next 10 years will see more bandwidth, and more flexible social market-making. Twitter is the current design leader as it is asynchronous, asymmetric and ad-free (for now). Superimposing this on current platform trends we imagine more fixed/mobile convergence, more attempts to link metadata, more attempts to compromise privacy for searchability. Also, there will not be a "Paradigm Shift" - The users will migrate onto the "New" new platforms while maintaining use of the old (we still use email and SMS) - in fact we predict the ability to run "Unified Comms" systems will be increasingly critical.

In addition, as social networks get bigger and marketing zombies invade them, and signal to noise ratio falls, the ability to filter in the stream will be increasingly critical to its uptake - it is our view for example that Twitter clients will increasingly look like email clients (and vice versa - look at the new Mozilla Raindrop ) as the required functionality is proven over time. Another approach to filtering will be to increase the niche-ness of individual networks (this is what happens to the AltNet and GroupWare) - this story today about BeautifulPeople.com firing 5,000 userswho had got too fat over the holidays illustrates this quite well


4. All useful technology and applications commoditise over a 3-5 year cycle.....

Its worth looking at what is commoditising now to get a view of the main trends in the first half of the 20-teens. Low resolution video, fixed-mobile comms and devices, social media (or at least some aspects of it - group comms and basic profiling), the underlying protocols that Web 2.0 kicked off, text search, and even (near) real time services are busy commoditising. Its also easier to make simple payments now than ever before. The most powerful emerging services of the early decade will be built on combinations of these, as its going with the flow. We will be getting more interconnection of commoditising layers (ie the "walled gardens" will forever be climbing up the added value stack)

This is going to really hurt (ie bankrupt) some industries that have existed because parts of the value chain have not commoditised in the past. Those based on expensive physical delivery of data that can be delivered digitally will be under terrific pressure in the next 5 years, there will be major creative destruction there. Think newspapers now, and TV/Films etc as bandwidth increases. Ditto knowledge industries that have avoided global labour cost arbitrage owing to degrees of difficulty of moving the information to and from the markets. Say goodbye to Hollywood, say hello to Bollywood - and will Silicon Valley still have a hegemony in 2020?

The Cloud will be renamed at least twice in the next 10 years, it is coming, but at present the combination of relatively low system reliability, lack of decent SLA protection and too many competing platforms without sufficient plug and play and interoperability will keep it as a niche sport, and users in the 20-teens will mainly opt for hybrid models of Cloud + Own Equipment - though the niches will grow steadily. As with Electricity, the Cloud will have to be "tried and tested" at each layer before widespread adoption. Services on it - the ASP/SOA/SaaS/Whatever the next Acronym is layer - will continue to develop with bandwidth, penetration and sheer cycles of code-writing. Friction will be provided ny attempts to run wllaed gardens (it was ever thus)

Another part of the commoditisation story is the march of Moore's Law (or similar). By and large in this space you get twice the power at half the cost and size every 2 years. This won't change anytime in the next 10 years, and a 2**5 = 30x reduction is a useful tool to think about 2019 with - imagine iPhone and basic PC like functionality for $10, in devices the size of an iPod Nano for example! This is going to drive two other trends onwards:

- ubiquitous multimedia, at least in the OECD (this TED talk by Patti Maes is a sign of things to come)

- the Internet of Things - never mind a billion new mobile users, think a trillion new dumb devices. Say hello to Mrs Fridge!

5. .....but People are Still People. The more things change, the more they stay the same

The technology changes, we talk and interact with each other in new ways, but what we do remains the same. The human condition will remain to hatch, match and despatch, some will always want to seek power and money, and while running this never-ending circle of life we will still try and scrabble onto higher planes of Maslowian existence, and try and keep ourselves entertained in our downtimes. And being human we will still try and get something for nothing so the dreaded parasite that is advertising will, like death and taxes, remain with us for a while yet. So here are some things that this implies:

- We have a hypothesis (based on our reading of behavioural economics as it stands today) that genetic imperatives drive time value of attention, so people will pay real money for things that help them match and hatch. Anything that increases privileged access to mates, money, status, nest building etc will be seen as valuable. Entertainment media is by and large lowest value time (if you had better things to do with your time, you'd do it) so will continue to struggle to fight free models. Its a volume game with low prices.

- Advertising will move over to online media as attention shifts, but owing to the lower audience sizes and almost infinite inventory, the mean (and I mean "mean") rates will stay lower. Over the decade the best empirical metrics will emerge and establish a better economic basis, so by end 20-teens we expect Online Advertising to overtake "trad" advertising in revenue, if not in profitability (Yes, that means hitting c 50% of value by c 2017 or so). Some of this will be from growth, some will be from decline in the overall market as Advertising is just less relevant in a networked, interactive digital world.

6. Hype (and dodgy economic theories) spring eternal in the human breast
In 1999 there were high priests of the New Tech Age then as now. Anyone churlish enough to be a "New Age Economics Denier" was castigated, lambasted and told they "didn't get it". By 2002 the sceptics had been proved largely right as the dotcom bubble deflated to complete limpness. But by 2004 the New "New Economics" of the Internet was on the rise again with Wikinomics (allowing me to calculate that New Economic memes have a c 2 year refraction time) and by 2009 in full swing with various flavours "Free" etc etc which. We predict most of this will be largely discredited by 2011 and a 2 - 3 year period of a Return to Rational Economics will ensue (it has already to an extent).

Companies built in this period have historically been strong, simple because they are built on solid fundamentals.

Ecclesiastes Law however states that, by c 2014 there will be a new inflationary bubble in something, and cometh the hour, cometh the man (or woman). A new generation of Tech Wonderfulness will thus be declared, that is of course quite unlike anything before, and it will of course herald in a New Economic Paradigm which (oddly enough) will promise to allow you to get richer with less effort, and that people who don't "get it" will of course be labelled as crusty old farts.


7. There is a Google or two in every Decade

In every decade a dominant New Media New Entrant emerges at a new layer that they make their own. In the past they have tended to be West Coast US companies (access to the worlds largest ubiquitous markets for risk capital and customers has pretty much guaranteed that). In the 80's it was Microsoft, in the 90's it was arguably AOL (and maybe Yahoo), in the Noughties it was Google.

Ten years later the last decades Cool Kids are nearly always still around, but now as large corporate entities rather than cool young companies. They are no longer the Innovators of the emerging "new" New Media and typically strategically buy innovation, and try and spoil it elsewhere. The ones for the 20-teens all exist already, the issue is spotting which has 10 year legs. In Social Networking I'm betting that Facebook is the New Yahoo, and something else will be the New Google. Maybe Twitter, maybe something in left field still.

Re Google in particular, we think that their search algorithms are going to be increasingly less useful over the decade - in a way a self inflicted goal, as by adding value to links means an entire parasitic SEO ecosystem has emerged. Given that Google funds itself entirely on its link economics, but subsidises many other ambitions, this is going to make its activities in other arenas harder over time. (I see John Battelle of all people, has come to similar conclusions)

In the next 10 years it will probably still be West Coast US companies that rule, but it will be less certain. China represents another huge, fairly homogenous market with its own barriers to entry, and Baidu seem to be able to hold off Google.

Others that are interesting are around the disruption of very big industries today - the growth of online video (Hulu), the disruption of Olde Print Media (Huffington Post, Techmeme) and the emerging Non-bank Banks (unless they get regulated sooner). Also the change to digital in the basic Telco layers implies the emergence of "Soft" Telcos (Telecoms companies that own no direct assets) - Skype is the first wave.


8. Planet Mobile will always overestimate benefits and underestimate time to get them

Planet Mobile runs on the perennial "You can use your mobile to select a great restaurant nearby for you and your friends" business case. It's been used to flog everything from m-commerce to location and augmented reality based services over the last 10 years. Three things have changed for the 20-teens though:

- The rogue entrant that re-sets the game for the next round has emerged (Apple and the iPhone). (Rogue Entrants use the technology available to build the "obvious gaping hole" system that the incumbents for various commercial reasons refuse to build). Going back in history, Apple always enters a poorly structured game with a well defined complete - and closed - solution, capturing about 15 - 20% of the more profitable market while the rest is then duked over by the guiants, and the lower economics usually means 1 dominant player emerges (Microsoft). Google Android is the early pretender for the Microsoft role in this industry, but its still early days and the shoe (and penny) still have to drop for the incumbents

- Pricing and network mean that the other billion or so of mobile users will come online this decade (Mobile penetration in Africa is now similar to the UK in 2000), but they do not have the economic value. Their entrance, however, will transform the market for follow on services (and quite a number of other Olde Industries in these locations)

- Smartphones do more stuff - which means that (i) a bunch of things PCs and other single purpose devices did will be taken on board, and thus (ii) a whole raft of new fixed/mobile applications will emerge. But "Mobile" will stop meaning "Phone" and mean anything from Handy via Tablet through Netbook to Laptop and whatever else comes along that can connect to the mobile nets (Mobile TV sets anyone?)

So, does this mean that Planet Mobile is now about to enter its (much heralded) decade of hegemony? Yes, it will be a lot better than in the Noughties, but... the rule of thumb of dividing all Planet Mobile projected benefits by 2 and multiply time to get them by 2 is probably as useful now as 10 years ago. apply.

Well, that is the projection of the Noughties going forward, but there are a bunch of "Intersection" technologies (those at the intersection of some of these" and some newly emerging trends which will help reshape things too. In the spirit of keeping things Prime, here are 5 we see emerging


9. Privacy (and a related issue, Trust) will become a bigger and bigger factors.

We thought Privacy would hit the headlines after Beacon, but it didn't - however, right now the buzz about Privacy is higher than its ever been. We expect nuanced Privacy to become a major issue in the design of next generation Social Nets, Web Services and eCommerce systems. Online Trust will see huge leaps forward in quantification, simply because without it a lot of the transactions (social, financial, political, etc) that we take for granted in the real world won't happen online very easily above a very basic level. It will require solving a wide combination of Social Capital, Behavioural Psych/Economic and good old Ownership issues. Plus Privacy, of course.

For this reason, by the way, I am less bullish on Location Based services - they are a privacy timebomb waiting to happen, and you just know some overenthusiastic and under-ethiced entrepreneur is going to build the short-cut system that gets accused of facilitating robbery, rape and worse.

(I rather liked Greg Battle's post and his comment that "there will be a sea of people paying for a decade of crimes of youthful oversharing. Credit services will ingest social profiles/footprints as a behavioral overlay to your FICA score and a new industry of removing those indiscretions will be born."


10. How Green was my Valley again?

The sheer amount of money being thrown at Eco-Science todasy - whether you believe in it or not - will ensure that all the networking technologies we know and love will be thrown at trying to make us, our goods and chattels, and by extension the planet, Greener. Some innovations will be very valuable, some will be total Greenwash. Most will come and go and be superseded by newer, better stuff as its very early days for most ICT based Greentech.

If I were to make a guess, its that the Greenwave will be more prevalent in the next few years and recede towards the end of the decade. This is because I (personally) believe much of the current climate change/AGW hoo-ha will be seen to be over-egged and the massive rampups in funding its had over the last 10 years will recede. Bt 2015 the colour of Green will be more "classic"

Anything that makes more efficient use of existing energy assets (renewable or un) is probably a real win. There is also so much money and interested vested in the whole Carbon Trading arena that no doubt many maths PhDs' time will be spent adapting systems from the financial industries to game this one.


11. Enterprise 2.0 will be rebadged with a Three Letter Acronym by 2011.

No one implements big new systems in corporates without a TLA Besides, Enterprise 2.0 as it stands is too limited. It reminds me of Office Automation in the 1980's - a great set of new technologies that aren't yet quite hitting the really big economic levers of the business. By the time Enterprise 2.0 is attacking the big levers - sales effectiveness (CRM), business operations efficiency (TOC, JIT), Churn reduction and Customer Satisfaction (TQC, 6Sigma), reducing CAPEX bills (BPR) and massively improving information flow (MRP2, ERP, OODA) then it will need a new name.

This is not to say that Enterprise 2.0 is not relevant, just that its still a very early day story with immature technology. What comes after is (literally) a 64-billion dollar question.

The Enterprise 2.0 movement will stand or fall on its ability to do 3 major things

- gain new customers/users/donors/whatever,
- keep them
- service tham at lower costs than current and "Good Enough" new systems will.

12. Government 2.0 will be a slow train coming

There are no doubt efficiencies to be gained by moving Governments services onto teh Web, however we believe it will be slower than many anticipate as:

(i) Those with power hate giving power away.

(ii) Governments, by and large, do not have stellar records in adopting new IT systems early, nor in rollling them out fast and successfully. Potential cost savings will be counterbalanced by the costs of purchase and implementation in cash-strapped public services. There will no doubt be Digital Inclusion lobbies arguing for 100% access to new services - a worthy aim, but it will serve to further slow things down. But full inclusion is expensive - however, so long as there is not Digital Inclusion, you can't take the savings. This is the Catch 22.0

(iii) Privacy is a major headache with public data, and current 2.0 systems are far from secure

(iii) Also, current networked systems are too simplistic to deal with the 5% of unpleasant people who will lie, cheat and scam. We can easily design Government 2.0 systems for the 95% of (usually) honest citizens (95% of the 2/3rds of the population who will have Broadband access) , but to do so will be to accept higher risk, and probably more collateral damage from the bad guys. And given how risk averse and lawsuit-keen We The People are en Mobbe, it will be hard for governments to do this. Even if they wanted to, which they don't

13. The Internet of (Moving) Things

Aka Robots. The combination of Moore's, Metcalfe's and .... Law means a lot of ICT power can be put on a fairly sophisticated yet inexpensive moving frame today. The Internet of Things is not the endgame, some of these things will be quite smart, some will move, some will do other fairly complex, unpleasant tasks (like fighting foreign wars, cleaning houses and dealing with low price service needs).

Anyway, that concludes a heroic set of guesses. I should add of course that our methodology is to write scenarios, calculate critical paths, milestones and "points of no return", attempt to understand the game theory of the scenario - and revise it every so many cycles with new evidence - so we will have changed our minds in a years time