Recent Research: April 2010

Bonus: A cool collection of data: “Singularity is Near Graphs

Another Bonus: Morgan

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Stanley’s Internet Trends (including lots of mobility linkages)

Research is good. Free highlights from expensive research reports are great. Here are some recent headlines:

2 Responses to “Recent Research: April 2010”

  1. Lane Curtis says:

    Hi Russell:

    I’ve read your book, “The Power of Mobility,” and wanted to compliment you on job well done. I really enjoyed all of the chapters from beginning to end; starting with chapter 1 where you discuss impacts of the Gutenberg Press on literacy and progress through developments in modern wireless communications in Part I. Reading about the Gutenberg Press (a technology introduced in the 1450s) conjured in my mind what it must have been like for people to print and disseminate their ideas of the time. Contrast that with today’s Kindle, and current iPad. We have arrived at a culture which changes at the speed of the human thought process and electrons which convey our communications. For me, the areas of your book that have had special pertinence have been many, but, to name a few: Ben Franklin’s “remember that time is money,” context (page 52), and convergence (Device & Lifestyle).

    My chosen profession is software development. Over the last few years I have watched with great anticipation the technical progress that mobile communications have taken. How far could engineers go with packing electronics into devices which could fit in an average pocket? How quickly could mobile devices evolve, and increase in functionality? How quickly, and to what degree would consumers change their habits to displace conventional methods for performing daily activities? Even 5 or 6 years ago I would have bet money that the consumer electronics market would not have the far-reaching choices that exist today, in 2010.

    Consumer choice, acceptance, and adoption are the forces which drive the modern electronics market. I have watched with great interest the developments of WiMax, Sprint’s 4G solution for improved mobile connectivity. What will consumers find of value in this new technology which promises to provide seamless, enhanced connectivity (almost) everywhere? Daily tech news seems to suggest that the more applications a mobile platform has the more relevant it is. Apple claims over 100,000 for iPhone. Google claims over 50,000 for Android. We must bear in mind that these applications are first generation for the new wave of smart phones that have emerged over the last couple of years. Many applications have sprung up to provide functions for geolocation services (finding businesses or people), emergency services (finding the caller), social networking (Facebook, Twitter), utilitarian applications (recognition programs, language translation, universal remote control), or just plain entertainment. We can expect a new wave of information systems to emerge as providers attempt to differentiate products through increasingly sophisticated applications.

    Knowledge is power (page 6). Just as phones have extended our capability to remain connected through IM and email our favorite desktop applications will undergo feature enhancement and become accessible everywhere. Today’s enabling technology is called Cloud Computing. It is the new path of software evolution. Slate, or tablet devices are poised to fill the gap that exists between netbooks and cell phones. Mr. Jobs created a new paradigm with his statement about the iPad on January 27th: “very simple.” We now have a device to fit every aspect of consumer lifestyle and behavior.

    The Cloud Computing concept has been around since the 1960s. In 1961 John McCarthy of MIT, a mathematician, spoke to the idea of a computing service business model, similar to the water and electric utility models of that day. In 1996 a paper titled: “Coordination and Administration of the Internet; Workshop at Kennedy School of Government, Harvard University,” used the term, “Cloud,” in the paper’s Figure 1 illustration (http://ccs.mit.edu/papers/CCSWP197/CCSWP197.html). Later, in August of 2006 Eric Schmidt, CEO of Google, used the term, “Cloud Computing,” to describe the company’s approach to SaaS at a search engine conference. Cloud Computing is essentially a collection of related concepts with device and location independence as an important tenet. As such, the chief method of access to the cloud is through the web via browsers. Gartner forecasts in 2013 worldwide use of mobile devices (1.82 Billion) will exceed the use of PCs (1.78 Billion) for access to the web.

    The Cloud Computing industry is poised to expand rapidly over the next 5 to 10 years with leading providers such as Amazon (EC2), Google (GAE), IBM (Smart Business), Microsoft (Azure), and countless other Fortune 1000 companies positioning themselves for an onslaught of demand. As noted in a Burton Group report (December 2009); http://www.burtongroup.com, pressure is growing for companies to find IT relief. They note: business dependency on IT continues to grow while many companies have simply run out of space, power, and resources. They do not wish to continue to expand their IT, but rather, are more interested in concentrating on core competencies. It’s not difficult to understand how these trends will impact IT; we can expect outsourcing for hosting solutions to increase along with use of web services. We can expect the vendors for client side technologies (ie. browsers) to continue to add support for new standards as they become accepted (maintaining a competitive marketplace). The major list with market share follows (as of April 2010): IE (59.9%), Firefox (24.5%), Chrome (6.7%), Opera (2.3%), Safari (4.7%), and many others. We are entering an era where far more efforts will be expended to develop software for mobile products and services than ever before, and at a faster rate.

    Web browsers became a disruptive technology by creating an alternative for information delivery. A tremendous advantage for browsers has been the continuity they have brought across disparate hardware platforms. In November 1994 Netscape Communications made the Beta version of Mosaic (Netscape) 1.0, the first web browser, available for public download. Microsoft quickly followed suit with Internet Explorer (IE) 1.0 in August 1995. From that point on until the release of Mozilla Firefox 2.0 in October 2006 Microsoft was able to enjoy an IE (Windows Platform) market share peak of 95% capitalizing on the company’s advantage with product bundling. In the second half of the 1990s Netscape was successful in maintaining a technical lead over Microsoft’s IE with the introduction of cookies, frames, and JavaScript in version 2.0 of the browser. It also enjoyed running on Windows versions 3.1, 95, NT, 98, Macintosh, most UNIX versions, OS/2, and DEC. It was during this time industry analysts realized that a large market segment of users had developed whose interaction was primarily and exclusively with browsers. They concluded that this user segment could dispense with a full-featured OS. At this time browser content began to be delivered as server side HTML, and client side scripting increased to make user interaction more dynamic. The emphasis was to improve the user experience by maximizing performance and increasing functionality through the user interface. This trend continues today.

    HTML: history of the web. Over the years we’ve had HTML (2.0 – 4.01), XHTML (1.x & 2.0), DHTML, and scripts such as XSLT. The HTML standard has made slow and painful progress from its inception credited to Tim Berners-Lee, the father of the World Wide Web, a contractor working at CERN in the 1980s and 1990s. Because of competing interests, in 1995 the World Wide Web Consortium was established to maintain standards; originally for physics, and later for Information Technology. Making revisions to HTML has become a process whereby W3C members hold open forums and reach agreement through the publication of recommendations in 5 stages of maturity (Working Draft: WD through W3C Recommendation: REC). Once finalized, implementation is left up to individual manufacturers for compliance with the recommendation. Compliance typically varies with products. The last HTML specification completed and published was HTML 4.01 in late 1999. Since that time there have been efforts to replace HTML with more strict subsets of Standard Generalized Markup Language (SGML). Much controversy arose over the goals of XHTML as a replacement for HTML. Legacy proponents argue that backwards compatibility with older versions of HTML needs to be maintained; the reason for which XHTML 1.x was published. Opponents argue that XHTML should give the developer community a way to “start over” with a new specification; and 8 versions of XHTML 2.0 were created at Working Draft level. However, and perhaps because of problems with reaching consensus and controversy, the W3C decided to let the XHTML 2 Working Group charter expire at the end of 2009. The inaction insured that no further work would be performed on XHTML 2.0. As a consequence, it has left the door open for a new standard to emerge.

    In 2004 a new group, the Web Hypertext Application Technology Working Group (WHATWG), started working on a new specification called Web Applications 1.0. In March 2010 the specification entered Working Draft state at the W3C (where Ian Hickson of Google is Editor), and is known as HTML 5. HTML 5’s main objective is to reduce the need for browser plugins. Plug-ins are proprietary modules for rich Internet application (RIA) utilities which extend browser functionality. HTML 5 promises to add much needed standardized support for current functionality provided by Adobe Flash, MS Silverlight, and JavaFX. Features are many, but, a few will undoubtedly benefit mobile platforms highly: geolocation, video, audio, device storage (both as a cookie extension technology and SQL database), drag & drop, web workers, and scalable vector graphics (SVG). HTML 5 standards already enjoy various levels of adoption by the leading browsers in use.

    Disruptive products are coming. One company has learned the value of control over the web by becoming one of the most frequent sites nearly all consumers use on a daily basis. They have become the masters of understanding the moment-by-moment needs of computer users, and have provided solutions which have earned them the loyalty of the largest user base of any software business. That company is Google.

    Google’s initial success came as a result of a technique the founders, Larry Page and Sergey Brin developed called “PageRank.” PageRank is a method whereby search results are determined by the website’s number of pages and significance of pages as they link back to the original site. Google began to sell ads based on keyword searches. The model was a combination of price bids and clickthroughs, where bidding began at 5 cents per click. At the time of the company’s IPO in August 2004, a market capitalization of more than $23 billion had been achieved. More than 99% of Google’s revenues come from advertising services: AdWords, AdSense, Merchant Center, etc. In order for this business model to work, Google must maintain a high degree of visibility.

    Google has been a most successful company in the web services industry. Since their initial success as a search engine provider they have understood that in order to maintain their high-profile position and influence over the consumer web marketplace it is necessary for the company to drive innovation. Witness Google’s initiative to bring ultrahigh-speed Internet access (1G-bps) to select areas around the US announced in February. Even if the promise of broadband performance in this range is not a near-term technical reality, it certainly created a large awareness of the company’s goals (with Google and Topeka Kansas trading names on different days). Indeed, as a part of corporate culture, engineers are encouraged to spend 20% of their workweek on personal interest projects (called Innovation Time Off). Google’s VP of Search Products and User Experience stated that analysis has shown 50% of new product launches have resulted from ideas originating out of personal interest projects.

    More recently Google has created a number of tools, hosting solutions, and software in an effort to “horizontally expand” their markets. Releases include Google App Engine (hosting), Android (consumer … from Android, Inc. acquisition; 2005), Google Web Toolkit (developer), Chrome browser, and Chrome OS (consumer … second half 2010). Google has also created web applications to penetrate the social networking market. Google tested “Wave” with a limited launch to 100,000 users in September 2009 and released “Buzz” in February 2010.

    Google has made it a core company objective to influence the mobile device environment. A key sticking point for Google has been the mobile phone market which has always been fragmented with numerous hardware vendors, OS, and application choices. Considering the company’s focus on the web as a centralized point of storage and control, the consumer market can expect a key objective for the company to concentrate on web content delivery through web browsers. Content delivered in this manner always comes with the latest updates; in contrast to applications designed to run on devices which must be upgraded periodically (of course, there are many advantages and disadvantages in comparison of the technologies). This single difference in computer technology philosophy helps to point-up the reason for why the Google and Microsoft organizations have become such bitter rivals; ultimately, the market segment over which the companies seek control largely over-laps.

    Google has two mobile products which directly address the mobile market: Android and Chrome OS. Android 1.0 was released in September 2008 and committed to Open Source shortly after. Google Chrome was announced in July 2009 and is pending release in the next few months. It is of interest to note that Steve Balmer of Microsoft accused Google of strategic indecision due to the overlap of product releases. Google has countered that Android and Chrome OS are designed for different markets: mobile and personal computing. Reacting to the issue co-founder Sergy Brin commented: the two systems “will likely converge over time.” This is most probably an inevitability of the market for slate, or tablet devices, which has few compelling offerings (with the exception of the Apple iPad currently sold), and should dramatically change over the next year or two as mobile vendors release competitive offerings running Chrome OS.

    Returning to my earlier statements concerning context, convergence, and Mr. Franklin’s phrase about time; I believe from an IT perspective the consumer market has entered a long mature phase for hardware solutions in the mobile communications market. For lack of a better term, I’ll call the market with mobile phones, slate, or tablet devices the “mobile communications market” (something an individual uses to receive or send information) since the true mobile device market encompasses PDAs, scanners, and remote control devices of all kinds. I can still remember pretty easily what it was like before there were desktop computers; people had calculators and only used computers at work or school if they had access to a mainframe. In 2010 we have devices that can be used in any aspect of our personal life. Mobile phones for traveling around during the day, slate or tablet devices for casual situations (around home or for school), and desktop machines to handle our more demanding needs with a larger screen, keyboard, and storage capacity. It would seem that software’s role has become as important as ever in the grand scheme of solutions to unite disparate platforms and solve users daily needs.

    Consumers will converge their lives along with converged mobile machines because time is money, and the convenience of shifting lower priority kinds of tasks into idle moments in our lives feels like a natural way to get things done. The reality is that we only have so many hours a day to sit in front of a desk with a PC and perform work. However, there are many, many ways in which we can interact with machines within the brief intervals of idle time in our lives. This is where the value comes for devices which can accommodate us (Mr. Jobs “easy” comment about the iPad).

    Time too, is a precious commodity on a personal level that can be managed with the right tools.

    Questions that I would ask anyone:

    1. How much do you value your personal time for family activities, entertainment, and leisure?
    2. If you could use a converged mobile application to help with making more effective use of your time to accomplish performing errands (thereby giving you more personal time), would you use it?

    I have a wife working full time and working on her dissertation for a doctorate, a son in middle school that plays football, and a daughter that plays basketball. Both of my children attend Taekwondo lessons 2 or 3 times a week. We attend the Presbyterian Church of Stanley Kansas on a regular basis where my wife and I are members and our son, Robert, has just been confirmed. There is no-one day or week that is the same.

    I have experimented with using various organizers to assist me with planning and tracking daily activities. While they have helped, I still feel these programs have fallen short of what I know they could do. My favorite program for the moment is MS Outlook 2007 (used in combination with Google calendar). Outlook, of course, is designed as a business tool and my emphasis is on an organizer for personal use.

    Due to the inadequacies of the software that exists for now I have started a “concept” site on Google App Engine called “OnTrack Today.” I have identified at least 3 key features for the application which would enhance its value as a converged mobile application. Of course, this is a separate topic for discussion. I would enjoy receiving input from you regarding the idea. Would you be open to further discussion offline?

    In summary, we are truly a mobile society at all times during our waking lives (hopefully, we get about 8 hours of sleep every day, during which time we are definitely not mobile). Just about everyone that uses a Wintel, Apple Mac computer or newer smart phone has become comfortable with using a web browser. In fact, where just a few years ago the majority of users used Internet Explorer exclusively, many are now using more than one kind of browser (ie. Firefox, Chrome, Opera, Fennec, Opera Mini, etc.). In truth, there are many pros and cons of using browsers as opposed to native device applications. However, Google’s business model earns revenue through the web which favors browsers, and the company is highly committed to creating products and services which deliver content through web applications.

    Google is in an experimentation phase at the moment. They are in a position to keep what works and fix or cut what fails. It’s a good bet social networking applications will be important as well as enhanced search models which can help advertisers zero-in on demographics or habits of consumers. There are many possibilities, but, here are a couple that can be imagined: a mobile application for singles under 50 that offers geolocation services. The service would help individuals find one-another based on social values, and then help them meet in a secure and safe manner in public. How about … a job board to help augment an existing service such as LinkedIn? For people who are in the job market checking on breaking opportunities while on the “go” could have a definite appeal. Both of these are situations where advertisers would have opportunities to sell products and services based on geolocation and timing.

    Sprint Nextel’s latest technology, WiMax, is designed to provide continuous service to mobile devices at broadband speeds irregardless of a user’s location within a city or coverage area. The technology will enable mobile users to extend their connection and usage pattern to any appropriate place. This will add value for consumers according to Russell McGuire’s Law of Mobility.

    Lastly, we are beginning to see some validation that the consumer market is coming (per your link on McGuire’s Law) …

    Cellular News recently carried an article, “1.7 Billion Smart phones by 2014,” which points-up growth in demand for devices for the “consumer” market as opposed to the commercial market.

    “According to the report, consumer devices, rather than business devices, will be the primary driver of growth. “Ultimately, business handsets currently represent a little under 10% of all handsets in the market, so although we expect that in excess of 40% of business handsets will be smart phones by 2014, the sheer number of residential subscriptions dictate that residential users will drive smart phone market growth,” says Morrish.”

    http://www.cellular-news.com/story/43064.php?source=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+cellular-news%2FLmiX+%28cellular-news%29&utm_content=Google+Reader

    Thank You.

    Lane Curtis
    Olathe, KS

  2. Russ says:

    Thanks Lane.

    I think that definitely sets the record for the longest comment yet on my blog, and very informative and well considered.

    Feel free to e-mail me directly about your OnTrack Today efforts.

    Russ

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