What’s Driving the Market Bus?

We’re hearing a lot about the changes in networking, in IT, in pretty much everything technological.  Likely there ARE going to be tumultuous changes, but if we want to understand them, to get the planning-for-the-future process right, then we need to understand what’s driving them.  We tend, in the IT and networking world, to focus on tactical issues rather than the big picture, so let’s broaden out a bit and see what’s creating our future for us.

Broadband mobility is our primary driver right now.  The fact that we can link people to high-powered information and processing resources via a simple portable device is a profound change in the notion of “empowerment”.  What broadband mobility has done is to shift focus from the instruments of satisfying our needs to the instruments through which we receive our answers.  The limitations of the appliances, whether created by technology or simply by form factor, are shaping our future.

Smartphones are the next in our list of drivers.  A smartphone is the ultimate information appliance because it’s handy and easy to manipulate, but it’s also the most limiting.  We can’t do a lot of browsing and gathering on a smartphone; the form factor and our desire to use the device while at least semi-engaged in other activities is critical.  Smartphones gave us apps because we needed a way to conveniently get not RESOURCES but ANSWERS.  And because more and more of our regular interactions are via smartphones, more of our expectations are set to “answer-me” mode.  Smartphones, combined with ubiquitous mobile broadband, create the “information-coupled society”.

Tablets are revolutionary in no small part because they’re a slight shift in the trade-off point that smartphones created.  They’re big enough for an immersive experience but portable enough to be considered a personal accessory.  But the most significant thing about tablets is that they’re arguably the first legitimate child of the web.  They’re a browser in a box, impossible before the Internet age.  They do most of what the average person needs an information appliance for (as opposed to a superphone, which does “calling-plus”) and so they relegate personal computers to being productivity tools.  They’ll never replace the PC but they will clearly cut off the “Internet model” driver from PC buying, which means that they’ll likely displace nearly half the total PC demand over time.  Ultrabooks?  Ultra-silly.  If you want a PC buy a cheaper laptop.  If you want portability, buy a cheaper tablet.

The smartphones and tablets are both “related drivers” to mobile broadband.  Our next driver is a bit more orthogonal; it’s the ebb and flow of broadband pricing policy.  Broadband capacity per unit cost, in technology-market terms, is like lemmings.  When there’s a lemming boom, predators explode because the ecosystem is stacked with prey.  Now I’ve been privileged to see more than my share of lemmings, and they don’t march to the sea as claimed, but prey booms followed by predator booms inevitably lead to prey busts.  And you know where that leaves predators.  Our challenge in networking is to insure that we have a kind of soft landing here, which is challenging because nobody really wants to admit to the problem of low return on capacity—except the operators.

We’re heading into a transformative period, and there’s little question that the explosion of innovation we’ve seen has been the result of the rich growth medium of the zero-marginal-cost-per-bit Internet.  All of our other drivers depend on not having a collapse of capacity or a radical increase in capacity cost, which is why I think it’s so important to consider what could be done about the problem.  The answer is either to make capacity a lot cheaper to produce or to subsidize its production with other revenues.


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