(The web is dead, long live the apps)
Is the web dead? According to George Colony, CEO of Forrester, at LeWeb (Paris, Dec 7-9) it is; and on top of that social is running out of time, and social is where the enterprise is headed. A lot to digest at once, particularly when Google’s Schmidt makes a compelling case for a revolutionary smartphone future that is still in its very, very early stages; courtesy of an ice cream sandwich.
Ok, so let’s break all this down. The Web, dead? Yes Web 1.0 is officially dead, replaced by a mobile, app-driven future. Social is saturated? Yes, call it 1.0 and Social 2.0 will be utilitarian. Time is money, knowledge is power. Social is really knowledge and that’s where enterprises will take the real-time, always connected aspect of the smartphone ice cream sandwich applications that harness internal and external knowledge bases for rapid product development and customer support. Utilitarian. VIVA LA REVOLUTION!
Web 1.0 was a direct outgrowth of the breakup of AT&T; the US’ second revolution 30 years ago coinciding ironically with the bicentennial end of the 1st revolution. The bandwidth bottleneck of the 1960s and 1970s (the telephone monopoly tyranny) that gave rise to Microsoft and Intel processing at the edge vs the core, began to reverse course in the late 1980s and early 1990s as a result of flat-rate data access and an unlimited universe of things to easily look for (aka web 1.0). This flat-rate processing was a direct competitive response by the RBOCs to the competitive WAN (low-cost metered) threat.
As silicon scaled via Moore’s law (the WinTel sub-revolution) digital mobile became a low-cost, ubiquitous reality. The same pricing concepts that laid the foundation for web 1.0 took hold in the wireless markets in the US in the late 1990s; courtesy of the software defined, high-capacity CDMA competitive approach (see pages 34 and 36) developed in the US.
The US is the MOST important market in wireless today and THE reason for its leadership in applications and smart cloud. (Incidentally, it appears that most of LeWeb speakers were either American or from US companies.) In the process the relationship between storage, processing and network has come full circle (as best described by Ben Horowitz). The real question is, “will the network keep up?” Or are we doomed to repeat the cycle of promise and dashed hopes we witnessed between 1998-2003?
The answer is, “maybe”; maybe the communications oligopolies will liken themselves to IBM in front of the approaching WinTel tsunami in 1987. Will Verizon be that service provider that recognizes the importance of and embraces open-ness and horizontalization? The 700 mhz auctions and recent spectrum acquisitions and agreements with the major cable companies might be a sign that they do.
But a bigger question is whether Verizon will adopt what I call a "balanced payment (or settlement) system" and move away from IP/ethernet’s "bill and keep" approach. A balanced payment or settlement system for network interconnection simultaneously solves the issues of new service creation AND paves the way for the applications to directly drive and pay for network investment. So unlike web 1.0 where communication networks were resistently pulled into a broadband present, maybe they can actually make money directly off the applications; instead of the bulk of the value accruing to Apple and Google.
Think of this as an “800” future on steroids or super advertising, where the majority of access is paid for by centralized buyers. It’s a future where advertising, product marketing, technology, communications and corporate strategy converge. This is the essence of what Colony and Schmidt are talking about. Will Verizon CEO Seidenberg, or his rivals, recognize this? That would indeed be revolutionary!
Related Reading:
February 2011 Prediction by Tellabs of Wireless Business Models Going Upside Down by 2013
InfoWeek Article on Looming Carrier Bandwidth Shortages
