Make it simple A survey of information technology October 30th 2004

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Make it simple Also in this section

Now you see it, now you don’t To be truly successful, a complex technology needs to disappear. Page 3

A ’s-eye of complexity Companies’ computer infrastructures contain a Pandora’s boxful of trouble. Page 4

If in doubt, farm it out The ultimate solution to simplifying your datacentre is not to have one at all. Page 5

Spare me the details There is a huge gap between what consumers want and what vendors would like to sell them. Page 7

The mom test A geek’s benchmark for true simplicity. Page 8 The next thing in technology, says Andreas Kluth, is not just big but Metaphorically speaking truly huge: the conquest of complexity What’s the use of all that electronic information if you can’t get at it? Page 10 HE computer knows me as its ene- ers eectively, it is time to declare a crisis. Tmy, says John Maeda. Everything I So, earlier this year, he launched a new re- touch doesn’t work. Take those plug- search initiative called Simplicity at the Hearing voices and-play devices, such as printers and MIT Media Lab. Its mission is to look for Plain old telephone systems are becoming digital cameras, that any personal com- ways out of today’s mess. redundant. Page 11 puter (PC) allegedly recognises automati- Mr Maeda has plenty of sympathisers. cally as soon as they are plugged into an It is time for us to rise up with a profound The blood of incumbents orice called a USB port at the back of the demand, declared the late Michael Der- PC. Whenever Mr Maeda plugs something touzos in his 2001 book, The Unnished Stand by for a spot of creative destruction. in, he says, his PC sends a long and incom- Revolution: Make our computers sim- Page 13 prehensible error message from Windows, pler to use! Donald Norman, a long- ’s ubiquitous . standing advocate of design simplicity, But he knows from bitter experience that concurs. Today’s technology is intrusive the gist of it is no. and overbearing. It leaves us with no mo- At rst glance, Mr Maeda’s troubles ments of silence, with less time to our- might not seem very noteworthy. Who selves, with a sense of diminished control has not watched Windows crash and re- over our lives, he writes in his book, The boot without provocation, downloaded Invisible Computer. are ana- endless anti-virus programs to reclaim a logue, not digital; biological, not mechani- moribund hard disc, ddled with cables cal. It is time for human-centred technol- and settings to hook up a printer, and ogy, a humane technology. sometimes simply given up? Yet Mr Maeda The information-technology (IT) indus- is not just any old technophobic user. He try itself is long past denial. Greg Papado- has a master’s degree in computer science poulos, chief technologist at Sun Microsys- and a PhD in interface design, and is cur- tems, a maker of powerful corporate rently a professor in computer design at computers, says that IT today is in a state the Massachusetts Institute of Technology that we should be ashamed of; it’s embar- (MIT). He is, in short, one of the world’s rassing. Ray Lane, a venture capitalist at foremost computer geeks. Mr Maeda con- Kleiner Perkins Caueld & Byers, one of An audio interview with the author is at cluded that if he, of all people, cannot mas- the most prominent technology nanciers www.economist.com/audio ter the technology needed to use comput- in Silicon Valley, explains: Complexity is1 2 A survey of information technology The Economist October 30th 2004

2 holding our industry back right now. A lot to connect every gadget that employees of what is bought and paid for doesn’t get The kink in the middle 1 might use, from hand-held computers to implemented because of complexity. Total IT spending, $bn mobile phones, to the internet. Maybe this is the industry’s biggest chal- 1,400 The mainframe era, says Mr Milunov- lenge. Even Microsoft, which people like FORECAST ich, was dominated by proprietary tech- Mr Lane identify as a prime culprit, is apol- 1,200 nology (above all, IBM’s), used mostly to ogetic. So far, most people would say that 1,000 automate the back oces of companies, so technology has made life more complex, 800 the number of people actually working concedes Chris Capossela, the boss of Services with it was small. In the PC era, de facto Microsoft’s desktop applications. 600 standards (ie, Microsoft’s) ruled, and tech- Software The economic costs of IT complexity 400 nology was used for word processors and are hard to quantify but probably exorbi- 200 spreadsheets to make companies’ front of- tant. The Standish Group, a research outt Hardware ces more productive, so the number of that tracks corporate IT purchases, has 0 people using technology multiplied ten- 1990 92 94 96 98 2000 02 04 06 08 found that 66% of all IT projects either fail fold. And in the internet era, Mr Miluno- Source: IDC outright or take much longer to install than vich says, de jure standards (those agreed expected because of their complexity. on by industry consortia) are taking over, Among very big IT projectsthose costing counted for 35% of America’s S&P 500 in- and every single employee will be ex- over $10m apiece98% fall short. dex; today its share is down to about 15%. pected to use technology, resulting in an- Gartner, another research rm, uses For the past three years, the tech indus- other tenfold increase in numbers. other proxies for complexity. An average try’s old formulabuild it and they come Moreover, the boundaries between of- rm’s computer networks are down for an has no longer worked, says Pip Coburn, a ce, car and home will become increas- unplanned 175 hours a year, calculates technology analyst at UBS, an investment ingly blurred and will eventually disap- Gartner, causing an average loss of over bank. For technology vendors, he thinks, pear altogether. In rich countries, virtually $7m. On top of that, employees waste an this is the sort of trauma that precedes a the entire population will be expected to average of one week a year struggling with paradigm shift. Customers no longer de- be permanently connected to the internet, their recalcitrant PCs. And itinerant em- mand hot technologies, but instead both as employees and as consumers. This ployees, such as salesmen, incur an extra want cold technologies, such as integra- will at last make IT pervasive and ubiqui- $4,400 a year in IT costs, says the rm. tion software, that help them stitch to- tous, like electricity or telephones before it, Tony Picardi, a bon at IDC, yet an- gether and simplify the fancy systems they so the emphasis will shift towards making other big research rm, comes up with per- bought during the boom years. gadgets and networks simple to use. haps the most frightening number. When Steven Milunovich, an analyst at Mer- UBS’s Mr Coburn adds a demographic he polled a sample of rms 15 years ago, rill Lynch, another bank, oers a further observation. Today, he says, some 70% of they were spending 75% of their IT budget reason why simplicity is only now becom- the world’s population are analogues, on new hardware and software and 25% ing a big issue. He argues that the IT indus- who are terried by technology, and for on xing the systems that they already try progresses in 15-year waves. In the rst whom the pain of technology is not just had; now that ratio has been re- wave, during the 1970s and early 1980s, the time it takes to gure out new gadgets versed70-80% of IT spending goes on x- companies installed big mainframe com- but the pain of feeling stupid at each mo- ing things rather than buying new sys- puters; in the second wave, they put in PCs ment along the way. Another 15% are tems. According to Mr Picardi, this suggests that were hooked up to comput- digital immigrants, typically thirty- that this year alone IT complexity will cost ers in the basement; and in the third wave, somethings who adopted technology as rms worldwide some $750 billion. Even which is breaking now, they are beginning young adults; and the other 15% are digital this, however, does not account for the natives, teenagers and young adults who burden on consumers, whether measured have never known and cannot imagine in the cost of call-centres and help desks, in life without IM (instant messaging, in case the amount of gadgets and features never you are an analogue). But a decade from used because they are so byzantine, or in now, Mr Coburn says, virtually the entire sheer frustration. population will be digital natives or immi- grants, as the ageing analogues convert to Why now? avoid social isolation. Once again, the Complaints about complex technology needs of these converts point to a hugely are, of course, nothing new. Arguably, IT increased demand for simplicity. has become more complex in each of the The question is whether this sort of 45 years since the integrated circuit made technology can ever become simple, and if its debut. But a few things have happened so, how. This survey will analyse the in the past three years that now add a causes of technological complexity both greater sense of urgency. for rms and for consumers, evaluate the The most obvious change is the IT bust main eorts toward simplication by IT that followed the dotcom boom of the late and telecom vendors today, and consider 1990s. After a decade of strong growth, the what the growing demands for simplicity IT industry suddenly started shrinking in mean for these industries. A good place to 2001 (see chart 1). In early 2000 it ac- start is in the past. 7 The Economist October 30th 2004 A survey of information technology 3

Now you see it, now you don’t

To be truly successful, a complex technology needs to disappear

HERE has never been anything quite Berliner’s thrived, and phonographs be- was turn the ignition key, put their foot on Tlike information technology before, came ubiquitous, rst as gramophones the accelerator, brake, steer and change but there have certainly been other com- or Victrolas, the name of Mr Berliner’s gearand after 1940, when automatic plex technologies that needed simplifying. model, and ultimately as record players. transmissions were introduced, even gear- Joe Corn, a history professor at Stanford Another complex technology, with an shifting became optional. University, believes that the rst example even bigger impact, was the car. The rst Another instructive technology is elec- of a complex consumer technology was cars, in the early 1900s, were mostly a bur- tricity. In its early days, those rms and clocks, which arrived in the 1820s. Clocks den and a challenge, says Mr Corn. Driv- households that could aord it had their were sold with user manuals, which fea- ing one required skill in lubricating va- own generators. Keeping these going soon tured entries such as How to erect and rious moving parts, sending oil manually became a full-time job. In the early 20th regulate your device. When sewing ma- to the transmission, adjusting the spark century, writes Nick Carr, the author of a chines appeared in the 1840s, they came plug, setting the choke, opening the throt- book entitled Does IT Matter?, most with 40-page manuals full of detailed in- tle, wielding the crank and knowing what companies had a senior management po- structions. Discouragingly, it took two gen- to do when the car broke down, which it sition called vice-president of electricity, erations until a trade publication was able invariably did. People at the time hired a rough equivalent of today’s chief in- to declare in the 1880s that every woman chaueurs, says Mr Corn, mostly because formation ocer (CIO) and chief tech- now knows how to use one. they needed to have a mechanic at hand to nology ocer (CTO). Within a genera- At about the same time, the increase in x the car, just as rms today need IT sta tion, however, the generators and technological complexity gathered pace. and households need teenagers to sort out vice-presidents disappeared as electricity With electricity came new appliances, their computers. became available through the grid, leaving such as the phonograph, invented in 1877 By the 1930s, however, the car had be- users to deal only with the simplest of in- by Thomas Alva Edison. According to Mr come more user-friendly and ready for the terfaces, the power socket. Norman, the computer-design guru, de- mass market. Two things in particular had spite Mr Edison’s genius for engineering he made this possible. The rst was the rise, Out with the nerds was a marketing moron, and his rst pho- spread and eventual ubiquity of a support The evolution of these technologies holds nograph was all but unusable (in fact, ini- infrastructure for cars. This included a net- some lessons for the IT industry today. The tially he had no particular uses in mind for work of decent roads and motorways, and rst observation, according to Mr Norman, it). For decades, Mr Edison ddled with his of petrol stations and garages for repair. is that in the early days of any technologi- technology, always going for the most im- The second was the makers’ increasing cal revolution the engineers are in charge, pressive engineering solution. For in- skill at hiding the technology from drivers. and their customers are the early adopters. stance, he chose cylinders over discs as the Ford proved particularly good at this. Ironi- But the mass market is the late adopters. recording medium. It took a generation cally, it meant that cars got hugely more This is why Thomas Alva Edison, an engi- and the entry of a new rival, Emile Ber- complex on the inside, because most of neering genius, failed miserably in busi- liner, to prepare the phonograph for the the tasks that had previously been carried ness. Similarly, in IT today, says Mr Papa- mass market by making it easier to use (in- out by drivers now had to be done auto- dopoulos of Sun Microsystems, the troducing discs instead of cylinders) and matically. This presented drivers with a biggest problem is that most of the people giving it a purpose (playing music). Mr Edi- radically simplied surface, or interface who create these artefacts are nerds. I want son’s companies foundered whereas Mr in today’s jargon, so that all they had to do to see more artists create these things. 1 4 A survey of information technology The Economist October 30th 2004

2 The geekiness that predominates in the over time. Today’s cars, in fact, are mobile plexity now takes place within the net- early stages of any new technology leads computers, containing dozens of micro- work, so that consumers no longer even to a nasty aiction that Paul Sao, a tech- chips and sensors and other electronic know when their electricity or water com- nology visionary at California’s Institute sub-systems that Henry Ford would not re- pany upgrades its technology. Thus, from for the Future, calls featuritis. For exam- cognise. Electricity grids today are as com- the user’s point of view, says Mr Benio, ple, Microsoft in a recent survey found that plex as they are invisible in everyday life. technology goes through a gradual disap- most consumers use only 10% of the fea- Consumers notice them only when things pearance . tures on oer in Microsoft Word. In other go wrong, as they did spectacularly during From the point of view of the vendors, words, some 90% of this software is clutter last year’s power cuts in north-eastern the opposite is true. Our experience is that obscures the few features people actu- America and Canada. that for every mouse click we take out of ally want. This violates a crucial principle You have to push all the complexity to the user experience, 20 things have to hap- of design. As Soetsu Yanagi wrote in The the back end in order to make the front end pen in our software behind the scenes, Unknown Craftsman, his classic 1972 very simple, says Marc Benio, the boss says Brad Treat, the chief executive of book on folk art, man is most free when of Salesforce.com, a software rm that will SightSpeed, a company that wants to his tools are proportionate to his needs. be examined in a later article in this sur- make video phone calls as easy for con- The most immediate problem with IT to- vey. This migration of complexity, says Mr sumers as e-mailing. The same applies to day, as with other technologies at com- Benio, echoes the process of civilisation. corporate datacentres. So don’t expect parable stages, says Mr Sao, is that our Thus, every house initially has its own some catharsis in eliminating layers of gadgets are so disproportionate. well and later its own generator. Civilisa- software, says Mr Papadopoulos. The A second lesson from history, however, tion turns houses into nodes on a public way we get rid of complexity is by creating is that a brute cull of features would be fu- network that householders draw on. But new layers of abstraction and sedimenting tile. As technologies, the sewing machine, the interfacethe water tap, the toilet what is below. This will take dierent the phonograph, the car and the electricity ush, the power switchhas to be incred- forms for rms and for consumers. First, grid have only ever grown more complex ibly simple. All the management of com- consider the rms. 7 A byte’s-eye view of complexity

Companies’ computer infrastructures contain a Pandora’s boxful of trouble

NE way to appreciate the chaotic com- makers, such as IBM, Hewlett-Packard, Sun that runs a whole bag of programs called Oplexity that rules in the computer Microsystems or Dell. It also has some middleware, which might be written by vaults (datacentres) of rms is to imag- mainframes that are left over from an ear- BEA Systems or IBM or TIBCO. The middle- ine, with a bit of anthropomorphic licence, lier era. Some of the servers will contain a ware now hands the byte over to the appli- the journey of one lowly unit of digital in- microprocessor made by Intel, whereas cation software of the employee who formation, or byte, as it wends its way on a others run on chips from AMD or on Sun’s started this journey with his click. That routine mission through a maze of com- Sparc chip, and the mainframes are using application program could come from puters, routers, switches and wires. IBM chips. For their operating system, SAP, PeopleSoft, Oracle, Siebel or a num- At the outset, the byte is asleep on a spe- some of the servers use Windows, others ber of other companies. Just as the byte ar- cialised storage disc. This disc could be Linux or Solaris or a more obscure kind of rives, dizzy and dazed, the employee clicks made by a rm such as EMC or Hitachi. Unix software, and the mainframes run on again, and another journey through the Now an alarm bell rings and a message their own, proprietary, system. labyrinth begins. ashes that an employee of the company, The byte is catapulted into this motley sitting in an oce somewhere half-way and, with luck, nds the appropriate Twisted tongues round the world, has clicked on some but- server. As it arrives in that machine, the But the poor byte not only has to navigate a ton in his PC’s software. The byte wakes up byte is spun around by a layer of virtual- labyrinth; it also has to cope with Babel. and is ejected from its storage disc. Along isation software, which might come from Every time it moves, it has to get past yet with billions of other from other a company called Veritas. This program another sentry, called an interface, hired storage discs, it is now herded through a gives the byte a quick health-check to see by whichever vendor was subcontracted tunnel called a storage switch. This switch whether a copy needs to be retrieved from to build that particular intersection. These is probably made by a company called Bro- a back-up tape on another network, proba- sentries demand dierent passwords, cade or McData. It hurls the byte towards bly a long way away, set up to guard called protocols, and speak dierent lan- an interface card, which comes from yet against disasters such as earthquakes. That guages. The byte, in other words, has to tra- another vendor, and the card directs the tape probably comes from StorageTek. vel with a suitcase of dictionaries. With byte into one of the datacentre’s many When this is done, the server shoots the luck, it can make some progress by speak- back-oce computers, called servers. byte to another computer and into a data- ing a lingua franca such as Java or .NET, This causes the byte some momentary base program. This database probably and by brandishing widely used pass- confusion, because the datacentre has comes from Oracle or IBM. The byte then words that are the internet equivalent of servers that were assembled by dierent ricochets into yet another server computer its mother’s maiden name. 1 The Economist October 30th 2004 A survey of information technology 5

2 Sooner or later, however, the byte en- changes, says Mr de Felipe. On day one counters some truly anachronistic sen- you merge the books; on day two you do tries, called legacies. According to esti- the regulatory paperwork, and on day mates by InfoWorld, a trade publication, three you start talking about the systems. about half of all corporate data today still The rst two, he says, are child’s play com- reside on mainframes, possibly bought de- pared with the third. In his last few years cades ago. And many companies still use on the job, for instance, he was concentrat- bespoke software that was written in the ing mostly on reducing the number of the 1980sbefore o-the-shelf, packaged soft- bank’s desktop applications, from a total ware arrivedby the company’s own IT of 415 to about 40. sta, who left the company long ago and All this opens a Pandora’s box of pro- took their little secrets with them. The blems. Something in the datacentre will go byte, in other words, also has to be uent wrong almost all the time. When that hap- in Latin, Aramaic, Hittite and other extinct pens, the users will scream for the IT sta, tongues to keep moving. who will have to gure out where in this Along the way, moreover, it encounters chain of almost innite permutations the open paranoia. Whenever it mingles with byte got stuck or lost. There is software that bytes that started their journey in the com- can run a few tests. All too often, however, puters of another datacentre, it has to pass it comes back with the dreaded NTF (no through checkpoints, called rewalls, that trouble found) message, says Kenny check its identication documents against Gross, a researcher at Sun who came from a list of viruses and worms and other the nuclear industry, where meltdown is nasty bytes, roughly as the Israeli army not a metaphor. That means the IT sta might examine a Palestinian entering from are reduced to changing devices one by the Gaza strip. In fact, the market leader for ique as a ngerprint. Then rms merge, one to nd the villain. This can take days, such rewalls is an Israeli rm called and someone has to try to stitch several of weeks or months. Check Point Software Technologies. these unique datacentres together. This is Today’s datacentres are a catastrophic Occasionally, the byte will also get the sort of thing that Charles de Felipe did mess, says Alfred Chuang, the boss of BEA wrapped in several sealed layers of en- at J.P. Morgan, a huge global bank, where Systems, a middleware company that he cryption and sent to its destination as a he was one of the chief technical people co-founded a decade ago (he is the A in VPN, or virtual private network, only to for 26 years until he quit in July. During his BEA), with the explicit aim of simplifying have to be carefully unwrapped again at career there Mr de Felipe went through datacentres. The struggle between com- the other end. Throughout the journey, the nine mergers, which amalgamated once- plexity and simplicity, he reckons, is bi- byte will be shadowed by a digital Depart- famous names such as Chemical, Horizon, nary: Either it will all blow up, or it will ment of Homeland Security, called an in- Manufacturers Hanover, Chase, H&Q, Jar- simplify. For the moment, no one can tell. trusion detection system (IDS). dine Fleming, J.P. Morgan and, most re- But remember that the last spirit left in Pan- Over the years, every rm acquires an cently, BankOne into a single bank. Every dora’s box, once all the evil ones had es- agglomeration of boxes and code as un- four years or so the entire landscape caped, was Hope. 7 If in doubt, farm it out

The ultimate solution to simplifying your datacentre is not to have one at all

VERY self-respecting technology ven- Dell has dynamic computing and Micro- technology can achieve the same feat. Edor these days not only vigorously de- soft aunts the grand-sounding dynamic Take, for instance, IBM’s autonomic- plores complexity but also claims to have a systems initiative. computing initiative, launched in 2002 by solution, and a suitably dramatic name for All these marketing buzzwords imply a Alan Ganek, an IBM executive, and now it to boot. Thus, Hewlett-Packard (HP) talks promise to hide the complexity of rms’ the most ambitious proposal on oer. The about its vision for the adaptive enter- datacentres in the same way that modern label is currently attached to about 50 dis- prise, helped by HP simplication soft- cars and planes hide their technological tinct IBM products with over 400 product ware called OpenView. IBM trumpets the complexity from drivers and pilots. This is features. In the longer term, however, IBM dawn of on-demand IT for companies hard to argue with. At the same time, the is hoping to bring computing to a level through IBM’s autonomic computing ar- grand titles raise expectations to an exalted where it mimics the autonomic nervous chitecture. EDS, an IT consultancy, oers level. Words such as organic and auto- system of the human body. This is what the agile enterprise. Hitachi has harmo- nomic intentionally invite comparisons regulates breathing, digestion, blood- nious computing. Forrester, a research with biological systems whose complex- sugar levels, temperature, pancreatic func- rm, suggests organic IT. Sun tempts ity is hidden from the creatures living tion, immune responses to germs and so with a shrewdly mysterious name, N1. within them. The implication is that digital on, automatically and without the people1 6 A survey of information technology The Economist October 30th 2004

2 concerned being conscious of these pro- ogies, it looks deceptively basic at rst application that takes these orders must cesses. It is, in a way, nature’s gold stan- sight. Even its name, web services, is so rst ensure that the customer has an ade- dard of virtualisation software and com- vague that vendors nd it hard to build quate credit history. It therefore consults a plexity concealment, which is why IBM any hype for a lay audience around it. directory of web services, nds an applica- bagged the metaphor. The best way to understand web ser- tion from an independent rm that checks What IBM actually means by auto- vices is to stop thinking of either webs or credit ratings, contacts this application and nomic in a computing context, Mr Ganek services and instead to picture Lego nds out that the customer is a reliable explains, comes down to four technologi- blocks. These little Danish plastic toy debtor. Next, the software consults the di- cal goals. The rst is to make computers bricks come in dierent colours, shapes rectory again, this time to nd an internal and networks self-conguring. Whereas and sizes, but all Lego blocks have the application that keeps track of inventory today IT sta walk around and manually same standardised studs and correspond- in the warehouse, and nds that the pro- perform tasks such as plugging CDs into ing holes that allow them to be assembled, duct is in store. Now it goes back to the di- computers or ddling with command taken apart and reassembled in all sorts of rectory and looks for an external billing lines, IBM wants the hardware and soft- creative ways. The magic of web services, service, and so forth until the entire trans- ware itself to gure out what settings are in eect, is to turn almost any ddly piece action is closed. missing and to install them automatically. in any chaotic datacentre into a Lego block, The second step is to make the systems so that it can snugly t together with all the Making a splat self-healing. Thus, the network should other ddly bits. Thus, datacentres that As a way of simplifying computing, web diagnose problems automaticallyfor ex- consist of decades of legacy systems and services have been talked about for some ample, by noticing a crashed computer lots of incompatible machines can now be time. Only in the past couple of years, and rebooting it. Whereas today IT sta snapped together and apart, Lego by Lego. however, has there been real progress in can easily take several weeks to diagnose a In place of studs and holes, web ser- agreeing on the most vital aspect, the stan- problem by manually sorting through vices use standardised software that dards that will make every system look fa- logs, autonomic computing can get it done wraps itself around existing computer sys- miliar to everybody else. A major break- without human intervention in about 40 tems. These wrappers do several things. through came in October 2003, when the minutes, says Mr Ganek. First, they describe what the component industry’s two superpowers, Microsoft The third goal, Mr Ganek continues, is inside is and what it does. Then they post and IBM, got up on a stage together and to make systems self-optimising. This this description to a directory that other stated what protocols they intend to use. means that the network should know how computers can browse. This allows those Collectively dubbed WS splat in geeky to balance processing workloads among other computerswhich can belong either circles, these are now being adopted by the the various servers and storage computers to the same company or to independent rest of the industry. so that none is idle or swamped. And the - suppliers and customersto nd and use This has raised hopes for a huge in- nal step is to make the whole network the software inside the wrapper. crease in their use in the next few years self-protecting. The system, in other This removes the main bottleneck that (see chart 2). Ronald Schmelzer and Jason words, should be able to anticipate, hunt scuppered business-to-business comput- Bloomberg at ZapThink, a consultancy, down and kill computer viruses and ing during the dotcom bubble. The whole think that web services are nearing their worms all by itself; to tell spam from legiti- B2B boom died for one simple reason: no- tipping point, because they benet from mate e-; and to prevent phishing body could get their damn systems to talk the network eect: the adoption rate of and other data theft. together, says Halsey Minor, the founder the network increases in proportion to its of Grand Central Communications, a utility. In other words, as with telephones A pinch of salt start-up that uses web services to stitch da- or e-mail, a network with only a few peo- The vision is shockingly ambitious. If it tacentres together. Now, he says, they do ple on it is not very useful; but as more peo- ever becomes reality, IBM (or HP, or who- talk together. ple join it, it becomes exponentially more ever gets there rst) will in essence have Imagine, for example, that a company useful and thereby attracts even more achieved what it has taken millions of receives an electronic order. The software members, and so on. years of natural evolution to do in the ana- Taking the idea of web services to its logue, biological world. Not surprisingly, logical extreme, it is reasonable to ask why many experts are sceptical, pointing to the Towards ubiquity 2 rms should continue to amass their own parallel with articial intelligence (AI), Web services, % of firms adopting piles of Lego blocks, most of which will which bons condently described as im- 100 only duplicate the Lego blocks of business minent in the 1950s but which remains partners. Put dierently, why have a data- UBS United elusive to this day. Mr Coburn at says States 80 centre if all you want is the data? This is a IT the talk of autonomic computing reminds EU fairly new idea in the industry, although him of a high-school science fair, and Asia 60 in many established industries it has been thinks it may be just another one of those Pacific around for a long time. People do not put things that IT vendors throw on the wall 40 safes into their basements but open bank to see what sticks. accounts. Similarly, most people Buried deep underneath the gu, how- 20 shouldn’t build their own aeroplanes, ever, there is indeed a technology widely FORECAST says Sun’s Mr Papadopoulos. They considered to have the potential for radical 0 shouldn’t even own them; in fact, they 2002 03 04 05 06 07 08 09 10 simplication. Like the wheel, the zip fas- shouldn’t even rent them; what they tener and other breakthrough technol- Source: IDC should do is rent a seat on one. 1 The Economist October 30th 2004 A survey of information technology 7

do not have to install any new software on the rm’s own computers, and can leave Salesforce.com to worry about integrating its software with the client’s other systems. Even upgrading the software becomes much easier. Instead of shipping boxes of CDs to its customers, Salesforce.com sim- ply shuts down its system for a few hours on a weekend night, and when clients log on again on Monday morning they see the new version in their browsers. As an industry, ASPs got o to a bad start. The rst generation, which sprang up during the dotcom boom, had trouble inte- grating their applications with their cli- ents’ legacy systems, and ended up re-cre- ating the complexity of their clients’ datacentres in their own basements. When the dotcom bubble burst, says Mr 2 In IT, the equivalent of renting a seat on rms simply pay a monthly fee, from $65 Lane at Kleiner Perkins Caueld & Byers in an aircraft is to rent software as a service per user, and go to Salesforce.com’s web- Silicon Valley, those early ASPs collapsed from specialised rms called application site, just as they go to Amazon’s when they because we VCs wouldn’t invest in them service providers, or ASPs. These compa- want to shop for books, or eBay’s to buy any more. nies build huge datacentres so that other secondhand goods. The second generation, however, companies do not have to. The best- This arrangement makes a lot of things seems to have cracked the problem of inte- known ASP today is Salesforce.com, a San simpler. Users need to spend less time on gration, thanks to web services, and is now Francisco rm that made its debut on the training courses, because the interfacein picking o segments of the software mar- stockmarket in June. As the name suggests, essence, the web browseris already fa- ket one by one. IDC estimates that ASPs’ Salesforce.com specialises in software that miliar to them. I can train the average cus- overall revenues will grow from $3 billion salespeople use to keep track of their mar- tomer in under 45 minutes on the phone, last year to $9 billion by 2008. As Grand keting leads and client information. claims Marc Benio, Salesforce.com’s Central’s Mr Minor sees it, that puts IT to- Traditionally, rms buy this kind of soft- boss, adding that traditional software day on the same path as other technol- ware from vendors such as Siebel Systems, packages often take weeks to learn. ogies in history, as complexity gets con- then try to integrate it into their own data- The IT sta of the rm using Sales- centrated in the middle of the network, centres. With Salesforce.com, however, force.com also have less work to do. They while the edge gets simple. 7 Spare me the details

There is a huge gap between what consumers want and what vendors would like to sell them

ISA HOOK, an executive at AOL, one of high-speed (broadband) connections, grace, simplicity or humility. These Lthe biggest providers of traditional these AOL customers are so-called late Asians recoiled from gadgets that made (dial-up) internet access, has learned adopters, or analogues. But even youn- noises or looked showy or intrusive. amazing things by listening in on the calls ger, savvier digital natives or digital im- Even within western cultures, Ms Bell, to AOL’s help desk. Usually, the problem is migrants can provide surprising insights who is Australian, has found startling dif- that users cannot get online. The help for those who care to listen. ferences in the way people view technol- desk’s rst question is: Do you have a Genevieve Bell, an anthropologist who ogy. When she recently opened her laptop computer? Surprisingly often the answer works for Intel, the world’s biggest semi- in a café in Sydney to check her e-mail on is no, and the customer was trying to conductor-maker, has been travelling the local wireless network, using a fast- shove the installation CD into the stereo or around Asia for three years to observe spreading technology called Wi-Fi, she im- TV set. The help desk’s next question is: how Asians use, or choose not to use, tech- mediately got a mocking Oi, what do you Do you have a second telephone line? nology. She was especially struck by the think you are, famous? from the next ta- Again, surprisingly often the answer is no, dierences in how westerners and Asians ble. For Americans, adopting technology which means that the customer cannot get view their homes. Americans tended to is an expression of American-ness, part of on to the internet because he is on the line say things like my home is my castle and the story of modernity and progress, says to the help desk. And so it goes on. furnish it as a self-contained playground, Ms Bell. For many other people, it may be Admittedly, in America, where about says Ms Bell. Asians were more likely to tell just a hassle, or downright pretentious. half of all internet households now have her that my home is a place of harmony, And even Americans, perhaps more1 8 A survey of information technology The Economist October 30th 2004

A geek’s benchmark for The mom test true simplicity

ITH e-mail, it wasn’t till my mom of a certain age to be diehard analogues is somewhat irked, pointed to the start but- Wcould use it that it became ubiq- a moot point. ton. You go to the start button to stop? uitous. The real test is always the mom Grandmothers, sisters, teenage daugh- asked his mother, quite perplexed. But to- test, says Brad Treat, the boss of Sight- ters and other female kin also have their day, several versions of Windows later, Speed, an internet video company. If my place. Mr Lane, for instance, not only be- that is still how it is done. mother ips over to some thing, lieves in the mom test but also has a sis- begins Michael Powell, America’s media ter theory to explain market inertia. This and telecoms regulator, answering a is mainly because he has a sister who question about internet telephony. If my spent a long career as an executive with mother is going to use it, starts Ray an American airline, where she fought Lane, a venture capitalist, asked whether every technological change over 30 years, this or that technology has a future. even though she couldn’t say why. Mothers come up surprisingly often in Mom, however, is invoked mostif Silicon Valley conversations. Whether not necessarily heeded. According to an that is because of their unequalled wis- industry legend, Steve Ballmer, now the dom, because the IT industry is full of boss of Microsoft, conducted a mom test males who are too caught up with tech- before the launch of , using nology to have met many women other his own mother as the guinea pig. When than their mothers, or because of a she had nished trying it out, Ms Ballmer misogynist streak that suspects women asked, How do I turn it o? Her son,

2 prone than others to workaholism, can get everybody who is anybody in consumer ers rebooting on the motorway. But the di- frustrated by technology. Chris Capossela, electronics, computing and telecoms rection is clear. In future, most people in boss of productivity software at Microsoft, comes to announce their new products. rich countries will be always on, and commissioned a study where oce work- A small portion of these wares eventu- will connect to the internet through some- ers were shadowed (with their consent) ally do end up being used by ordinary hu- thing other than a PC. after they left the oce. It showed that peo- mans. Currently, the CES technophiles are The other, and related, big idea con- ple feel pressure even in their cars and excited about two trends in particular. The cerns what some vendors call the digital homes to keep up with the expectation rst is that every single electronic device home and others the e-home. This that one is always available, says Mr Ca- will soon be connected to the internet. year’s CES was full of mock homes in possela. Thanks to technology (laptops, This includes the obvious, such as mobile which the toaster, the refrigerator and the BlackBerries, smart phones and so on), he phones and TV sets, and the less obvious, oven talk wirelessly to the computer, says, the boundaries of nine-to-ve no such as shirts and nappies that carry tiny where toilet seats warm up at appropriate longer exist. This creates a new demo- radio-frequency identication (RFID) tags. times and the front door can be unlocked graphic category, the enterprise con- Microsoft talks about its connected-car remotely through the internet by the sumer, for whom not only technology project, which conjures up images of driv- owner on his business trip abroad. but all of life has grown more complex. More than anything, however, the e- home is about digital entertainment, Hark, the vendors The sound of money 3 based on the premise that all media are Contrast these insights with the techno- Online music sales, $bn currently migrating from analogue to digi- logical visions that the industry is cur- Pay-per-download Subscriptions tal form. This is happening fastest in pho- rently peddling. The best place to see them tography. In America, digital cameras are is the Consumer Electronics Show (CES), 2.5 already outselling lm-based ones, and in FORECAST held every January in Las Vegas. For the 2.0 the rest of the world the crossover will better part of a week, some 133,000 visi- happen next year, according to IDC. Al- tors roam a space the size of several foot- 1.5 ready lots of digital pictures are being ball elds and duck in and out of 2,500 ex- created that need to be stored and shared. hibitors’ booths. Almost all the visitors are 1.0 Another promising medium is music, male, and the toilets are blanketed with 0.5 which is already digital (on CDs), but call girls’ business cards. Everything else is which is also increasingly being sold on- a ashing warren of at-panel screens, ro- 0 line, either through downloads of songs or bots that serve drinks and countless other 2003 04 05 06 07 08 subscriptions to online libraries (see chart outlandish gadgets. The CES is where Source: IDC 3). This has already led to the revival of1 The Economist October 30th 2004 A survey of information technology 9

2 consumer brands such as Apple, with its All this will make technology even ultrawideband, another promising wire- hugely successful iTunes music store, and more complex, because broadband needs less technology that will connect devices has recently attracted competition from to work reliably both at great distances (to over short distances at blazing speeds. Sony, Wal-Mart and Virgin as well as from connect to the internet and when roaming) However, even once ultrawideband be- Apple’s old nemesis, Microsoft. Films and and at short distances (to connect gadgets comes available, over the next year or so, a television are also moving online, albeit within the home). In respect of the rst, for lot else needs to happen before setting up more slowly. the moment the best eorts of gadget ven- an e-home becomes simple. The comput- These trends raise new complexity is- dors such as HP and Motorola allow Wi-Fi ing, networking and consumer-electronics sues. The rst is the challenge of connect- networks within the home or oce to link industries have to agree on standards and ing all the devices in the homethe PC, the up with mobile-phone networks on the communication protocols and on compat- camera, the game consoles, the stereo road. Hopes are also high for a new wire- ible copyright software. The challenge is speakers, the TV sets and even the elec- less technology called WiMax, expected in compounded by consumers’ buying hab- tronic picture framesthrough a wireless the market by 2005, that has a range of 31 its. At present, most vendors are hawking a network, so that they can share all these miles, or 50km (compared with Wi-Fi’s highly architected, my-boxes-only strat- digital media without too much hassle. 100 yards, or 90 metres) and could there- egy, says Forrester’s Mr Schadler, but no- This is crucial because, according to Ted fore blanket entire cities with connectivity. body buys technology this way, all at once, Schadler at Forrester Research, consumers Ironically, connecting gadgets at short with benets delivered in some distant fu- are demanding experience liberation. In range in a user-friendly way could prove ture. Instead, he says, consumers have other words, they will not buy music or trickier. Even today, home networking budgets and add home network func- other media if they fear that they can only with cables and PCs and printers is not for tions one cheap device at a time. Only Ap- experience these things while sitting in the faint-hearted or the over-25s. Most ple, with gadgets such as its $129 AirPort front of their computer screen. consumers don’t have true networks at Express, a cute little thing that plugs unob- Paul Otellini, the second-in-command home; they’re only divvying up their in- trusively into a power socket and delivers at Intel, expressed the challenge more po- ternet access, says Kurt Scherf at Parks As- iTunes from a PC to the stereo, gets that etically when he spoke at the CES. Intel sociates, a consumer-technology consul- point, says Mr Schadler. and its partners, he promised, will not only tancy. As soon as the network becomes For other vendors, this could prove Wi-Fi the home (because otherwise the wireless and the nodes include DVD deadly. If they hawk complex products to tangle of cables would be oputting); they players, TV and audio sets, the task be- consumers, the expenses of maintaining will also Veri-Fi (because everything must comes daunting. When Walter Mossberg, a their own support hotlines (one customer be totally secure), Hi-Fi (because the qual- reviewer of consumer gadgets, recently call costs them about $30) will eat into ity of sound and video must be good), Am- tried to connect his PC to his stereo their prots, and customers may end up pli-Fi (because the experience should through a fancy wireless device called angry at the brand anyway. Instead, as reach into the garden, the garage and the Roku SoundBridge, the thing asked him with every other consumer technology in basement), and of course Simpli-Fi. Mr whether his password was in ASCII or in history, says Parks’s Mr Scherf, the digital Otellini emphasised this last point: We Hex. Mr Mossberg, stuck for an answer, home must become invisible to the con- need to make this dirt-simple, at ten feet, abandoned the experiment. sumer in order to succeed. So what not at two feet. That is because people Help may be on the way in the form of should the consumer see? 7 will no longer be sitting two feet away from a computer screen with a keyboard, but ten feet away from something or other with a remote control.

The seams are still showing But simply making the home a perfect communications hub is not enough. Ac- cording to John O’Rourke, Microsoft’s di- rector of consumer strategy, people want access to their media at all times, including when they are travelling. Gadgets must therefore know how to forward a phone call, a song or Finding Nemo automati- cally from the living room to the car. Micro- soft calls this seamless computing; other vendors call it pervasive or ubiqui- tous. When Mr O’Rourke recently dem- onstrated some of Microsoft’s eorts in seamlessness at an event in Silicon Valley, at one point the Windows system that was projected on to the big screen displayed a message that it had malfunctioned and was shutting down. That seemed to ring a bell with the audience. 10 A survey of information technology The Economist October 30th 2004

Metaphorically speaking

What’s the use of all that electronic information if you can’t get at it?

HE two biggest consumer-technology Tsuccesses of recent times are a white page and a wheel. The white page belongs to Google, the world’s most popular search engine; the wheel to Apple’s iPod, the world’s most popular portable music player with a hard disk. Both form part of so-called interfacesmetaphorical gate- ways through which humans enter and navigate around a technology. Both are also picture-book examples of simplicity concealing complexity underneath. The white page is said to have come about as follows. In its early days, Google scenes. Google is said to operate some on them as on PC monitors. kept receiving strange anonymous e-mails 100,000 servers. And Apple had to cong- Large screens, for their part, require containing only the number 53. Some- ure the iPod so that it automatically and simplicity because they tend to be further times they stopped coming, then they uently talks to iTunes, the music applica- away than a PC monitor and operated by a started again. Eventually, one of Google’s tion that runs on users’ PCs. Transferring remote control, or because of the context geniuses gured out that the e-mails ar- songs from the PC to the iPod now requires in which they might be used. Simplicity is rived whenever Google had made nothing more than plugging in a single ca- a must-have when you’re driving, says changes to its web home page that ex- ble. (Both companies, incidentally, are no- Jack Breese, Microsoft’s research director. panded its word count beyond 53. The toriously secretive and refused to be inter- Even for the traditional PC, however, a anonymous adviser was telling Google to viewed for this survey.) new interface is needed. The present met- keep down the clutter (although why he aphor, in designer-speak, of a desktop picked 53 as the cut-o point remains a More ops than hits surface was Apple’s key commercial mystery). In August this year, Google Perhaps the most startling thing about breakthrough that launched the PC era in made the biggest stockmarket debut of Google and the iPod, however, is the fact 1984. This broad metaphor also lent itself any technology rm in history. The cur- that they stand out so much. There are very to sub-metaphors, including object-icons rent word count on google.com is 27. few other recent examples of interfaces such as a rubbish bin (also the work of Mr As for the iPod, It is successful because that have opened up entirely new avenues Mercer when he worked at Apple in the it’s simple, says Paul Mercer, the brain- for technology to change human behav- 1980s), folders and les. Microsoft eventu- father of its interface and the founder of iour. Yet breakthroughs on this scale are ally copied these metaphors and brought Iventor, a technology-design rm. It does needed if technology vendors are to see them to the mass market, thus helping to few things, but some subtle things, and it is their visions come true. Those visions, re- make millions of computer users more uid. The simplicity comes from the member, assume that people will increas- productive. wheel itself; the subtlety comes from fea- ingly connect to the internet through de- But now that the internet era, in which tures such as the acceleration built into the vices other than the PC. These gadgets will everything is connected, is taking over wheel, so that it seems to sense whether either have smaller screens, as with iPods, from the PC era, in which computers were the user wants to scroll through songs mobile phones or watches, or larger and mostly isolated, these old metaphors are slowly or fast. The genius lies in what is ab- more remote ones, as with TV sets or even, becoming increasingly redundant. PCs are sentthere is no fast-scroll button. In- perish the thought, car windscreens. turning into crowded repositories of fam- stead, says Mr Mercer, the technology ma- Small screens require simplicity for ily photographs, songs and e-mails along- terialises only when needed, and thus two reasons, says Mr Mercer. One is the side word documents and spreadsheets, seems to intuit the user’s intention. lack of real estate, ie, very restricted and point to locations on their own hard Google and the iPod are successful be- space, meaning that not much ts on to the disks as well as to computers far away. cause each rescues consumers from a par- screen at one time. The other is that the This is too much to keep track of on one ticular black hole of complexity. Google method of input is dierent, because there desktop. Making everything visible is does it by putting a white page on top of is either only a tiny keyboard or none at all. great when you have only 20 things, the googol (the number 1, followed by 100 Mary Czerwinski, a cognitive psychologist writes Mr Norman in The Invisible Com- zeros) of potential web pages. The iPod at Microsoft who calls herself the visuali- puter. When you have 20,000, it only does it by letting music lovers, in eect, sation and interaction boss, has also adds to the confusion. Show everything at carry all of their CDs with them in their found big gender dierences. For what- once, and the result is chaos. Don’t show pocket. Both solutions require an enor- ever reason, women struggle with small everything, and stu gets lost. mous technological apparatus behind the screens, whereas men do almost as well The desktop metaphor is collapsing un-1 The Economist October 30th 2004 A survey of information technology 11

2 der the weight of data overload, says Tim dows, code-named Longhorn. Instead of fuse speech recognition with language un- Brown, the boss of IDEO, a design rm in les and folders, it would use fancy new derstanding, argues Mr Norman. But to Silicon Valley. Browsing in the old sense search algorithms to guide users through achieve language understanding, you rst of the word becomes pointless, he says, their PC. This technology, called WinFS have to crack the problem of articial intel- and ltering becomes crucial. This ap- (which stands either for le system or ligence (AI), which has eluded scientists plies both to items that are stored on the future storage), was to turn Longhorn for half a century. In fact, the challenge user’s PC and to those on the internet be- into relational databases so that users goes beyond AI, according to Mr Norman, cause, in an always-on world, the distinc- would no longer need to remember where and to the heart of semantics. Just think tion becomes irrelevant. they put things, because the interface how dicult it would be to teach some- Hence the excitement about Google. Its would automatically retrieve data for body to tie a shoelace or to fold an origami algorithms have so far been directed only them as needed. Alas, in August Microsoft object by using words alone, without a at websites, but it plans to deploy its search announced that Longhorn would be de- diagram or a demonstration. What we technology to help people nd their own layed until 2006 and that its gem, WinFS, imagine systems of speech-understanding documents as well. Google is currently had been dropped from it altogether. Glee- to be is really mind-reading, says Mr Nor- soft-launching Gmail, a free e-mail service fully, rivals now refer to Longhorn as ei- man. And not just mind-reading of that oers one gigabyte of free storage. This ther Longwait or Shorthorn. thoughts, but of perfect thoughts, of solu- could be a rst step towards letting cus- tions to problems that don’t yet exist. The tomers store all their data on Google’s Honey, we need to talk idea that speech recognition is the key to servers, where they will be easily search- Even the mockingbirds, however, cannot simplicity, Mr Norman says, is therefore able, instead of on their own PCs. In a par- agree on what metaphor should replace just plain silly. allel move, earlier this month Google of- the desktop. One favourite seems to be He concludes that the only way to fered free software that searches the local some kind of personal assistant. But that achieve simplicity is to have gadgets that hard disks of PC users and displays the re- may be promising too much, because explicitly and proudly do less (he calls sults much like those of a web search. what makes real-life assistants helpful is these information appliances). Argu- Naturally, this has struck fear into Mi- that they are able to make sense of their ably, the iPod proves him right. Its success crosoft, whose Windows system runs 94% bosses’ inchoate ramblings. In computing, so far stems from its relative modesty of of the world’s PCs and which sees itself as says Microsoft’s Mr Breese, the holy grail ambition: it plays songs but does little else. the ruler of the desktop. Yet Microsoft un- of simplicity is I-just-wanna-talk-to-my- In the same vein, other vendors, such as derstands the threat that data overload computer, so that the computer can Sun Microsystems, have for years been poses to Windows’ current metaphors. Bill anticipate my needs. The technical term promoting radically stripped-down de- Gates, Microsoft’s chairman and software for this is speech recognition. Speech vices called network computers or thin boss, regards this interface crisis as one of makes the screen deeper, says X.D. clients that do nothing but access the in- the biggest challenges for his rm, along- Huang, Microsoft’s expert on the subject. ternet, where the real action is. Such talk side the security holes in Windows and, Instead of a limited drop-down menu, horries rms such as Microsoft, whose - perhaps, the threat from Linux, an open- thousands of functions can be brought to nancial fortunes rely on clients getting source operating system. the foreground. thicker so that they can sell software up- His plan was therefore to introduce The only problem is that the idea is al- grades. But in the end the minimalists may new metaphors in the next version of Win- most certainly unworkable. People con- be proved right. 7 Hearing voices

Plain old telephone systems are becoming redundant

ARA BAUMHOLTZ lives in Hawaii and throughout the day. That got her thinking. Ms Baumholtz does already. S wants to stay in close touch with her I wouldn’t be surprised if I got rid of the Today, most people make phone calls young granddaughter in Pennsylvania. So phone, she says. on the plain old telephone system Ms Baumholtz, by inclination an ana- Ms Baumholtz represents the leading (POTS), where operators open a dedicated logue, became a digital immigrant. edge of a trend with implications that are circuit between the callers, which can be With the help of software from Sight- as far-reaching as they are often underesti- next door or in dierent countries. This Speed, a Californian rm that is at last mated. Telephony, as a stand-alone tech- network consists of a set of pipes that is making video-calling foolproof for ordin- nology and as an industry, will gradually separate from the internet. However, voice ary humans, Ms Baumholtz now talks to, disappear. In ten years the whole notion conversations can also be sent over the in- and makes faces at, the distant toddler of a phone call or a number may be dead, ternet, in the same way that e-mails travel. through her PC monitor and webcam. says Paul Sao at Silicon Valley’s Institute The caller’s voice is broken into packets of And, because she is not using a telephone for the Future. Instant messaging (IM), au- digital information that are routed sepa- line and her broadband internet access is dio IM, video IMwhat is a call? You will rately to their destination and reassem- always on, she no longer bothers to hang click on an icon and talk, just as when you bled at the other end. up, staying connected to Pennsylvania see somebody in the hallway. Or just as In pure form, such conversations are1 12 A survey of information technology The Economist October 30th 2004

2 called internet telephony. This might in- communications infrastructures. One is day. Setting up a conference call still gets volve a video call between two Sight- the data network; another is a private the better of many cubicle workers. Call- Speed customers, or a voice call between branch exchange (PBX) for external ing while travelling is messy if it involves two computers that use software from phone calls; a third is an automatic call xed-line phones and expensive (as well Skype, a fast-growing European rm. This distributor (ACD) to route calls internally; as spotty) with a mobile phone. pure form is still rare, however, because and the fourth is a voicemail system. By In a VoIP world, by contrast, there is most people still use traditional phones, switching to VoIP, companies can ditch one universal in-box for voicemails, e- which requires people calling from a PC or everything but their data network, which mails and all other messages, which can an internet phone to bridge over to the makes maintenance dramatically simpler be checked from any internet browser. Us- phone network. The umbrella term that in- for the IT sta. For instance, employees can ers can save their voicemails, reply to them cludes such hybrid calls is voice-over-in- log on to their phone from any cubicle or with text, video or voice, and attach ternet protocol, or VoIP. This is a service desk, whereas with POTS any oce move spreadsheets and presentations to their oered by companies such as Vonage, a causes expense and disruption. According voice if appropriate. Numbers are no lon- high-prole start-up in New Jersey. It al- to the Meta Group, a consultancy, 63% of ger necessary, because SIP is happy with lows customers to plug their old phones North American companies (including gi- names. Initiating a call, whether to one into an adapter that routes the call through ants such as Boeing and Ford) have already person or many, requires only a single the internet and crosses back, if necessary, switched to internet telephony, either en- click on a name or an icon. Phone tag has to the phone network at the other end. tirely or in part. become a thing of the past. Travelling too In the past, VoIP has not had a great It does not take long for employees of has ceased to be a problem: the user sim- reputation among consumersif, indeed, companies with VoIP to cotton on to its ply logs on to his phone wherever he has they had heard of it at all. Today’s xed- many other conveniences. Today’s genera- an internet connection. line telephones are relatively simple de- tion of VoIP uses a technology called ses- Because that connection nowadays vices, and mobile-phone handsets com- sion initiation protocol (SIP), which inte- tends to be always on, moreover, people pensate for their added complexity with grates voice with other software programs, start changing their behaviour. Users stay the convenience of mobility, so there ap- such as e-mail, instant messaging, and cal- permanently online with the people in pears to be no acute need to change the sta- endar and collaboration applications. their contacts application (as Ms Baum- tus quo. Internet telephony, by contrast, Qualitatively, in other words, VoIP has holtz does with her granddaughter), prac- still conjures up images of geeks ddling less in common with telephones than tising what Rich Tehrani, a VoIP expert,1 with their computer settings to talk to with, say, or Hotmail. other geeks. And even if the new genera- This makes a busy executive’s life simpler tion of VoIP providers, such as Vonage, in several ways. Loud and clear 4 really are simplifying things, they none- Local VOIP subscribers in United States, m theless appear at rst glance to be mere All-in-one 20 POTS substitutes for the incumbent telecoms In a world, employees can easily FORECAST utilities. Currently, their big selling point is spend hours a week checking separate not simplication but lower cost, because voicemail systems in the oce, at home 15 VoIP is much cheaper than conventional and on their mobile phones; they also telephones, and pure internet telephony is need to look out for faxes and keep an eye 10 free. That is enough reason for some con- on their pager. To make a call, they typi- sumers to make the switch (see chart 4). cally go to their contacts software and then 5 Companies are drawn to VoIP by its manually key a number into their phone, lower costs in the rst place, but they also perhaps looking up a country code rst. quickly discover its simplifying magic. Phone tag, the game played by people 0 2003 04 05 06 07 08 This starts behind the scenes. Today, com- trying, and failing, to get hold of each other panies need to maintain four separate on the phone, causes frustration every Source: The Yankee Group The Economist October 30th 2004 A survey of information technology 13

2 calls ambient telephony. They will not they are all in the same conference call. By ple were predicting that e-mail would lead be talking the whole time, says Mr Tehrani, clicking, the caller can automatically join to world democracy, if not nirvana, but uidly escalating and de-escalat- that conversation. Thus, says Tim Brown, whereas analogue sceptics insisted that it ing between dierent levels of interac- the boss of IDEO, a big technology-design was just a paper-saving alternative to of- tion. A conversation between several col- rm, VoIP can make technology polite ce memos. Then people started bringing leagues might start with a few instant text less intrusive, more humane and thus eas- their e-mail habits home from the oce. messages, then escalate to a voice or a ier to live with. Since then, e-mail has become radically video call, then slumber for a few hours Within the next decade, says Donald simpler, unbound from geography and with icons sitting at the bottom of the Proctor, the VoIP boss at Cisco, the world’s ubiquitous. It has made communicating screen, then start again, and so on. It is largest maker of networking gear, VoIP with far-ung friends free and easy (al- rather like sharing an oce or a kitchen. could reach a tipping point, as millions of though, arguably, it now has to defend Crucially, SIP also allows for social and cubicle warriors, by then persuaded by the that convenience against spam). And as it business etiquette through a feature called convenience of VoIP, decide to bring the got simpler, it simplied its users’ lives. presence. For instance, a caller browsing simplicity of converged communica- VoIP has the same potential. It may not through his contacts software may see tions into their homes and disconnect be for everyone yet, but over the next de- some names (or photographs) in red, their POTS utility. An obvious time for cade, as the ddliness of connecting to the which tells him that they are busy, so he such a step might be when people move internetwhether through the air, the will not call them but might leave a voice house and get fed up with spending an power socket, the old phone jack, the ca- or text message instead. Other contacts, hour listening to their utility’s muzak just ble-TV dongle, or by satelliteis resolved, such as family members, may be shown in to disconnect and re-connect a physical that connection will increasingly be the yellowie, busy but available for emer- phone line. only link needed. Communicating, by gencies. Others might be green, indicating VoIP, in other words, is today roughly voice or any other means, will be free. Will that according to their software where e-mail was a decade ago. Some peo- it be simpler? Ask Ms Baumholtz. 7 The blood of incumbents

Stand by for a spot of creative destruction

N THE record, any top executive in the vious era’s leaders, they are in turn dis- technology battles, Mr Christensen ar- OIT, consumer-electronics and tele- rupted by the pioneers of the next era. gues, newcomers to the industry almost coms industries today will profess that his To explain how this happens, Mr Chris- invariably crush the incumbents. rm is leading the way towards simplicity. tensen distinguishes between two basic One reason is an asymmetry in nan- But are those claims justied? In theory, types of innovation. The rst is sustain- cial incentives. A disrupter might look at a says Ray Lane, a venture capitalist, the ing innovation. This is the sort that in- million non-consumers and see a huge company best placed to deliver simplicity cumbent rms are engaged in to sell ever opportunity, whereas the incumbent sees should be Microsoft. It controls virtually better, and ever more protable, products a drop in the ocean. Initially, moreover, the all of the world’s PCs and laptop comput- to their most attractive and demanding incumbent will nd being disrupted very ers (albeit smaller shares of mobile customers. An example might be Micro- pleasant, because the customers that de- phones, hand-held and server computers), soft adding more features to Word, Excel fect rst are likely to be the unprotable so if its software became simpler, every- and PowerPoint. If challenged by upstarts, ones. As its own prot margins improve, thing else would too. The bitter irony, says incumbents almost always prevail. At the incumbent will be tempted to ignore Mr Lane, is that Microsoft is one of the least some point, however, the technology goes the competition. The disrupter now makes likely companies to make breakthroughs into overshoot, where users no longer its own sustaining innovations until its in simplication. It cannot cannibalise it- have an appetite for additional bells and technology becomes good enough to self, says Mr Lane. It faces the dilemma. whistles, and sustaining innovation leads poach the original market, at which point The dilemma? These days, whenever to numbing complexity. the incumbent is gored. anybody in the IT industry mentions that At this point, according to Mr Christen- Another reason why newcomers pre- word, it is instantly understood to refer to sen, the second, disruptive, type of inno- vail is a cultural malaise that infects in- The Innovator’s Dilemma, a book by vation becomes possible. Disruptive tech- cumbents. Big, successful companies are Clayton Christensen, a professor at Har- nologies target the least demanding organised into product divisions, whose vard Business School, who has since fol- customers in the current market, or even managers will keep a close eye on their lowed it up with a sequel, The Innova- entirely new markets of non-consumers, known rivals’ oerings to ensure that their tor’s Solution. In a nutshell, the dilemma by oering something simpler, or cheaper, own products retain their edge. The dis- is this: rms that succeed in one generation or both. An example of a disruptive tech- rupters, however, do not care about pro- of innovation almost inevitably become nology that is cheaper but not necessarily ducts. They observe real people, and spe- hamstrung by their own success and thus simpler is Linux, an open-source operating cically non-consumers, to see what jobs doomed to lose out in the next wave of in- system that is taking market share from they are trying to get done. Today, for in- novation. Just as they disrupted the pre- Unix and Windows. And in disruptive- stance, Microsoft might take comfort from1 14 A survey of information technology The Economist October 30th 2004

2 the fact that Excel has more features than vastly overestimate the importance that any other spreadsheet, whereas a poten- customers place on premium services, tial disrupter might note that people are while equally vastly underestimating the driven to despair when trying to transfer importance of simplicity, both in handsets les from an old to a new computer. and in pricing plans. This is opening the Thus, technology has historically ad- door to disrupters such as Comviq, in Swe- vanced in waves of disruption. The origi- den, which has taken 39% of market share nal Bell (the ancestor of modern giants away from the incumbent, Telia, by oer- such as AT&T, SBC, Verizon and Lucent) ing half as many handset features and rad- began in the late 19th century as a dis- ically simpler pricing plans. rupter to Western Union. At the time tele- Wireless and xed-line telephone com- phone signals could travel for only three panies may simultaneously become vul- miles, whereas Western Union’s tele- nerable to new providers of internet tele- graphs could communicate over long dis- phony or VoIP, such as Skype and Vonage, tances. Bell started by targeting the local or networking companies such as Cisco market, but eventually improved its tech- (especially once fast, wireless internet ac- nology and entered the long-distance mar- cess has become ubiquitous and totally re- ket, rendering telegraphs obsolete. liable). The disruption could be especially Sony became famous as a serial dis- severe if the upstarts not only make calling rupter, starting in the 1950s, when its tran- dirt-cheap or free, but also nd ways to sistor radios skewered the radio standard come disruptive simpliers at the expense help consumers with jobs such as sim- of the day, vacuum tubes, and that tech- of today’s enterprise-software giants. plifying their communications as a whole nology’s incumbent, RCA. In the 1970s For consumers, it is increasingly clear or meeting their needs for privacy. and 1980s, Xerox was the incumbent in that coping with information overload is a For incumbents this ought to be reason photocopiers, rebung sustaining chal- big job to be done. Google has already for paranoia, but it need not spell doom. If lenges by IBM and Kodak to make better acted on that observation by disrupting they play their cards right, they too can copiers for the top end of the market, be- various old-fashioned owners of directo- take part in the game of disruptionas fore succumbing to the disruption from ries, such as Yellow Pages. Having moved AT&T, for instance, is trying to do by with- simple and cheap table-top copiers from well ahead with its own sustaining im- drawing from the residential telephone Canon. IBM in turn was the incumbent in provements, Google (or a rm like it) market at the same time as vigorously mar- mainframes and parried sustaining at- stands a chance of becoming a disruptive keting its own VoIP service. The key will be tacks from General Electric, RCA and simplier at the expense of incumbents to aim for simplicity and aordability. AT&T, until mainframes were disrupted such as Microsoft, which does not let con- Everybody else, meanwhile, has cause by PCs and rms such as Microsoft, Intel sumers store information by content for optimism. A lot of things that are com- and Dell. And so on. across all applications, making it harder to plex today will get simpler in the coming get at. In telecommunications, mobile years. Like other technologies in history, IT Who’s next? phones have for years been disrupting the and telecommunications seem destined Where does that leave the IT, consumer- incumbent xed-line providers, but now gradually to recede into the background of electronics and telecoms industries today? they themselves are in danger of over- human activity, leaving more time and en- Many of their current products have far shooting. Capgemini, a consultancy, has ergy to get on with the innite complex- overshot the needs of businesses and con- found that most mobile-phone operators ities of business, and of life in general. 7 sumers, yet failed to help them to get es- sential jobs done. Moreover, billions of an- Future surveys alogues will eventually become digital Oer to readers Reprints of this survey are available at a price of immigrants, whether for fear of social iso- £2.50 plus postage and packing. Countries and regions lation in rich countries or, in developing A minimum order of ve copies is required. Indonesia December 11th 2004 countries such as India and China, be- Send orders to: Taiwan January 15th 2005 cause they will be able to aord to. These The Economist Shop New York February 19th 2005 current non-consumers are technology’s 15 Regent Street, London SW1Y 4LR India and China March 5th 2005 next frontier. 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