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Internet Commerce Expo LA ' 97September 11, 1997
John Patrick |
See also:
Electronic Commerce (eCommerce)
Introduction of John PatrickThank you. Good morning, everybody. Welcome to the final day of Internet Commerce Expo, Los Angeles. And we'll probably suffer through a little bit of L.A. drive time today, so I can see some folks coming in as we go through the introduction and welcoming in John Patrick.
It's my pleasure this morning to welcome very much a favorite to the Internet Commerce Expo, John Patrick, who is the vice president of Internet Technology with IBM.
He leads IBM's efforts in the Internet arena worldwide. And as we know from having events around the world, gets international exposure for IBM almost everywhere: always quoted in CNN International, and very definitely from the many press we have here, a favorite -- and probably because of his very relevant remarks. And, you're in for some excitement this morning in terms of what you'll hear.
Probably one of the most important measures of an executive in the information technology industry and definitely within the Internet space is the popularity of a personal Web site. If you've got your pens handy, John has the most popular personal Web site worldwide of any I/T executive. And that is http://www.ibm.com/patrick.
If you haven't seen it, I think you will want to at the end of this presentation. It gives me great pleasure this morning to welcome John Patrick, Vice President of Internet Technology, with IBM Corporation.
John Patrick:
Thank you, Ron, and good morning. This must be the assemblage of the faithful -- after four days of meetings and speeches and touring of the booths, I really do appreciate you coming this morning.
I know at this stage of the growth of the Internet, we have quite a bell curve of people in the way they think about the Internet. More and more, I think we're becoming experts -- all of us. Maybe some of you in the audience are inventors of the Internet. But, there may be just a few who are still wondering if maybe this is some version of CB Radio.
So, I'm going to walk down the middle, and I hope to offer something for everyone: a few ideas here or there, plant a couple of seeds, give you perhaps some new insight.
I'd like to talk to you about the emergence of a universally-connected world, and what opportunities and issues this universally-connected world presents to all of us. And, talk just a bit about the limitations or potential limitations: Will the Internet fall apart? Will security concerns cause people to be frightened away? Or, will there be perhaps a much more optimistic view of things?
I'd like to start by discussing some meta trends: five key, very high-level things going on right under our nose at breakneck speed changing everything. It's all about the evolution of this new medium. It's not an Internet phenomena any longer; it's hardcore, mainstream, the evolution of a new medium...
...a medium that is evolving just like radio evolved: AM to FM, to FM Stereo; and TV evolved, from black and white to color; to color SurroundSound, Theater Sound. And much in the same way, the Internet is evolving as a medium which will facilitate natural human interaction.
A medium, think of it like a pipe into your house or your business: a pipe that might be made of copper, perhaps glass, perhaps air -- a virtual pipe. But through this pipe flowing packets -- all kinds of packets: e-mails, faxes, telephone conversations, television as we know it, radio, all forms of communications.
This medium, emerging as a global Local Area Network with a billion people on it, everyone connected. The reach and compatibility of this incredible network making everyone a user. Will it be the PC, or will it be the NC, by which they will connect? Answer: Yes. And many other kinds of devices as well: PDAs, and pagers, and cars, and televisions, and kiosks...
...kiosks in the jungle, kiosks on the plant floor where people take a Web break instead of a smoke break; kiosks in schools and churches and government buildings and on the street corner. Everyone becoming a user.
Now, this fourth meta trend is one that's a bit easy to miss: Internet addresses everywhere. I'm not talking here about e-mail addresses; I'm talking about TCP/IP addresses -- the fundamental ability to address a thing whether it's your pager, or your cell phone, or your car, the vending machine sending a message home saying, "I'm out of 7-Up"...
...your car sending you an e-mail saying, "It's time for an oil change," the appliance in the kitchen sending a message down to the basement on to KitchenAid, saying, "Please send a serviceman, I need a new impeller blade."
So, things being connected -- maybe not only a billion people connected, but perhaps a trillion things connected. So this is a dramatic extension of information technology that's before us -- not a replacement; an extension -- an extension whereby the Internet through the Web is becoming that new GUI, the new window into the existing core business data that exists throughout the world.
The result of this is quite interesting: markets becoming geo independent, competitors popping up, not only in a business from which you didn't expect it to come, but from a country you never heard of. The Web putting the consumer in charge -- another one that's easy to miss, but one of the by-products of this universal connectivity is that the consumer now decides how they will connect, when they will connect. They will decide what kind of information they want, when they want it, the degree of depth to which they want to explore. No longer will editors and publishers be in charge; you and I will be in charge.
And lastly, the multimedia convergence that we've been talking about as an industry for probably twenty years is happening now. It's happening because there will be bandwidth galore fairly soon. And people are preparing now to converge all the media types in new and very interesting ways.
I think of it as something I call "natural Net" -- the way that we'll interact with new forms of media that we didn't have before.
Think about MIDI, for example -- simple MIDI: creates these little interesting musical tones from our Soundblaster. Actually, fairly boring, but actually very efficient to use MIDI music. And these simple beeps that our Soundblaster makes could actually become a lot more interesting.
Recently, we replaced in the Soundblaster the synthetic tones with something called a "wave table." Now, a wave table takes samples of actual instruments -- take a clarinet and play a middle C -- capture that sound, store it in a database right here in my Thinkpad, and use that database of real sounds to reproduce according to the instructions of MIDI; not just using the synthetic tones that come from a Soundblaster. Let's listen to the result:
(MUSICAL VIGNETTE)
Now, I'm going to add some interaction here -- this natural human interaction I'm talking about. And on this screen, you're looking at the instruments -- the MIDI instruments -- that are represented by the sixteen tone capabilities, sixteen-instrument capability of general MIDI.
I'm going to move these instruments around, I'm going to move the microphone around, and get a three-dimensional effect as I interact with this MIDI music. Enjoy:/
(MUSICAL VIGNETTE)
Okay, we're going to replay. Now, notice as I go over to the drum../.
(MUSICAL VIGNETTE CONTINUES
Ah, I think you get the idea. Just imagine if that was the Haydn String Quartet and you could single out the cello and single out the viola and really learn a lot about music.
By the way, you can save that positioning in 3-D of the instruments and give it as a name as you choose, and then recall it to have the orchestra play it your way -- the way you'd like to have it. Natural Net: the ability to interact with new forms of media.
By the way, I think soon we may see the human voice be compressed, transmitted over the Internet, and combined with a musical accompaniment by MIDI. This will introduce a whole new kind of music that doesn't even exist today.
Well, lots of interesting things going on here because of the evolution of this network. And it presents a tremendous opportunity. And at IBM, we call it "e-business." e-business: content, commerce and collaboration.
Content: not as in, "click here to see what's going on at Disney," or Microsoft Sidewalk, but click here to see what's going on with the business content of the world. Click here to initiate the supply chain. Click here to look at the inventory databases, accounts receivable databases, bank policies, insurance policies -- incredible, vast amounts of useful business information which today is trapped in mainframe and Local Area Networks but can now escape because of the Internet.
Collaboration: not just millions of people browsing around the Web but a few people selectively getting together and empowering themselves to compete with large companies -- a few little people getting together, securely, privately, collaborating, leveraging their collective capabilities.
I'd like to discuss with you some of the issues that I see emerging in content, commerce and collaboration. Of course, all applications, all Web sites, are really a mix of all three: content, commerce and collaboration -- but it's a useful way to talk about, a useful way to parse, what's going on here across this space.
Now, in "content" there are some very interesting things happening. It started out with reaching into mainframe computers and getting from a large database the status of a package. I think we were all quite impressed a few years ago to see this; today, of course, we take it for granted.
It was the tip of the iceberg. It was the beginning of being able to tap into existing information.
I think the key issue to think about along these lines of content is expectations. What will people expect? When you put up your Web site, can you just assume that people will like it?
Well, I think this subject of expectations actually deserves quite a bit of thought. You know, we take a film, we go to a Kodak carousel -- a kiosk -- or to the drugstore. We drop it off. We come back and pick it up twenty-four hours later, and we're pretty happy. That's actually pretty good service.
Now, on the Web, we're downloading a picture of Sojourner. We say, Oh! Why is this taking so long? This is taking fifty-seven seconds to get this picture, from 219 million miles away! Expectations.
Now, this phone call -- I'm making this free phone call, I'm talking to my brother in Europe. It just doesn't exactly sound right.
Sometimes we lose track of what we're really doing here. And expectations is a key thing to think about when you put up that Web site. People expect a lot.
Now, the second thing to think about with regard to your content is, who owns it? Who's in charge of what people have to say about your company, or your university, or your government? Who's in charge of that? And it may not be you.
Recently I spoke with a number of executives from the paper industry. And the night before, I went out on the Web and did a few searches to see what I could learn about the paper industry. And I found "Steve Shook's Directory of Forest Products, Wood Science and Marketing."
And I began to peruse this page. And I went, Wow! Phew! This is a lot of information here about the paper industry: government reports, links to everything, who's doing what, who thinks what, various points of view about the paper industry. I said, this obviously is "the" source of all information about the paper industry.
So I said, by the way, raise your hand -- anybody know Steve Shook? Not a hand went up. And one sort of agitated CEO said, Well, who is he? I said, I don't know, I think he's a student. Well, why's he doing this? Well, I think it's his hobby. I don't know. I think he likes paper.
He's at the University of Washington, there's a lot of trees out there. No, this guy's really into paper. I would get to know Steve Shook if I were you. Maybe this should be Steve Shook and the XYZ Paper Company, "bring you the Forest Products Directory." Maybe you want to subsidize his Web site. Maybe you want to find out if what he's saying is accurate. If it isn't, maybe you want to take some action. If it is, maybe you really want to partner up here.
Who's in charge of the content? Every company, every government, every university, has these skeletons in the closet, things that you'd rather people not talk about: that product failure you had, or that issue over safety, or whatever it might be. How do you deal with it?
How do pharmaceutical companies deal with animal testing? Do you hope nobody's talking about it? Or do you get out there and engage in the issue?
One company told me not so long ago: We're not going to be on the Internet, because we have our image. I said, Well, I hate to break this to you, but you do. Let me show it to you. And I showed him hundreds of things on the Internet about their company, all of which were negatives.
So you don't have the choice about whether your image is going to be on the Internet. It's going to be there. You do have a choice, however, whether you want to be proactive and help to shape it, mold it, be part of it, interact with it.
Now, of course, content can be very useful as a way to share. And we found this whole subject of the Olympics a good way to do that. Obviously it's an advertising endeavor on our part, but it's also a way to allow people to really get into it when it comes to sports.
Now, at Atlanta last summer, it seemed like the whole world was there, at the Atlanta airport. At Nagano, which is about three hours from Tokyo by train, everybody in the world isn't going to be there. It's not so easy to get to, and there aren't any more tickets.
So the Internet site is going to be quite important. We're not only building a lot of interesting content about the results and about the individual sports, but also engaging the children.
For the first time, a really major effort to have the children participate, to enable them to send e-mail to the athletes, to draw pictures of their view of particular sports, and to share them with their colleagues and their fellow children around the world and compare their various perspectives. I think it's going to be a wonderful thing for the kids to broaden their perspective of the world.
Most of us grew up and had a perspective of maybe the high school up the road six miles that we played football against; today's children will gain a perspective on a global scale.
Now, one last aspect of content that I think is vitally important is our culture. If we're not careful as an industry, humanity could possibly revolt against this universally-connected world.
And one of the things that people fear is that we will lose that personal touch, we will lose that engagement, we will lose the ability to cherish and visit rare works of art.
So we're busily at work on this subject as are others digitizing important works around the world -- treasures, things that have never been seen by most people and never will be seen by most people in the world.
An adding watermark technology -- I don't know if you can see it from the back of the room, but if you look very carefully at this picture, which is from the Wittenberg Museum in Germany, you'll see something in the background. It looks like a postmark.
It's called a "watermark." It uses public key cryptography to provide a digital signature on these rare works -- a way to protect the authenticity of these priceless treasures.
No longer will the Vatican Library, as another example, be restricted to just a thousand scholars per year to see the great works of Ptolemy and Aristotle and letters to Anne Boleyn from Henry the XIII, et cetera. Now, fifty or a hundred million people will be able to share in these great works.
Now, the second area of e-business is commerce. Commerce: "click here to buy" is the way I think most of us think of it, but of course it goes much deeper than that.
Now, I know we're all familiar with Amazon.Com, and I'm not going to talk about what they're doing. I'm sure you're familiar. It's quite impressive, what they're doing.
But the real issue here is not really about the great value proposition they've created on the Internet; but rather the fact that a company starting with nothing but an idea can raise $35 million dollars of capital and then cause multi-billion dollar companies to be on the front page of The Wall Street Journal on the defense. On the defense.
The Internet is all about not only e-business, but e-business for small business. The playing field is leveled now. Mom and Pop Store can have the same presence as IBM or any other global company -- if they're creative.
They can have the same reach as a global company. They can be effective, they can be successful. So here's this little company shaking up the whole industry, re-creating the economics of the book-selling industry because of the Internet.
I think of this as the formation of the parallel economy: a digital economy is being formed under our nose. And the book industry is the leading edge of what's going on here.
Here's a little company with less than twenty people. Less than twenty people, creating a whole new approach to market research data -- an industry dominated by large companies who travel around with their briefcases charging large fees to offer consulting advice and information, and here's a company who claims to offer exceptional market intelligence on demand. And it's available, of course, everywhere in the world. e-business for small business.
Now, another aspect of commerce that I believe is quite important is to think about your business model. If you take your catalog as you have it today and put it on the Web alone, you missed it. It's necessary, but not sufficient. You need to think about your value proposition. You need to think about your model. There's a new model by a little company called ONSALE.com. It's a Dutch auction, where you go and bid against others. And you get an e-mail when you fall off the bidding list. They have a finite number of goods for sale. And they have a starting price: here, you can buy an IBM Thinkpad for five dollars, it says. Well, that's the starting price. I assure you, it won't sell for that.
And the bidding goes on, and they all get sold. They're doing very well. The point is, it's a new business model. American Airlines, doing the same thing with airline tickets.
And I think e.Schwab has some important lessons for us here also: two lessons, I believe. First is, leveraging of the brand. Brands and logos will become enormously important over the next couple of years. Schwab has a good brand, they've leveraged it into e.Schwab.
The second important lesson here is that in one year, Schwab gained more online trading customers than they had gained in the prior twelve years. Why? I think it's because of this medium. It's this pipe that's connected to the house and the business. And through this pipe flows everything. And this pipe is A-O: Always On.
So if it's on, and you're looking at news, weather and sports, and if you're doing your banking and your shopping, and you're learning and renewing your driver's license, you might as well do your trading.
Not very long ago people said there would only be a few hundred million dollars of electronic commerce in 1997. The Wall Street Journal reported on Friday that they project $750 million dollars in commissions on trading alone -- just from trading of stocks on the Internet, three-quarters of a billion dollars in commissions, revenue, on the Internet.
So this concept of Always On is a powerful idea. The other day, I received in the mail a diskette from an airline. And it said, Please install this diskette, and you can call into our system and see our schedules. And I said to myself, why would I want to install this diskette? I'm connected to the Internet.
I can get that information in a lot of different ways. I don't want your diskette. I don't want a proprietary connection. I don't want to hang up the Internet and dial you; I'm connected, Always On. And that's the way people will be, Always On.
Now, lastly, there's an important model here in the content arena with regard to commerce. Every newspaper, virtually, is on the Web. And most of them look just like they looked in print. Even, you know, the fonts are the same, the colors are the same, the layout is the same. It looks just like it looks. This is The Boston Globe. It doesn't look like a newspaper. In fact, you have to look pretty hard to find out that it is a newspaper. Boston.Com has created an economic Web. They've created a value Web built around their content.
You can go here and buy tickets to Jon Bon Jovi. You can go here and join in the Boston Symphony Orchestra and see what's going on, pick a seat, pick a concert, buy a ticket.
If you go through the rest of the site you'll see all kinds of interesting things here: "attention outdoor enthusiasts," "Picasso exhibition," "catalogs," "auto dealer locator."
They've built an economic Web around the content. They've provided a reason to go. There's lots of places to get news. Why go to Boston Globe? Why not just go to some other newspaper? Well, because there's an economic Web they've created here that's very useful to people in Boston.
Okay. Now, collaboration is the third leg of this stool, of e-business. Collaboration is all about working together. It's all about a distributed way to think and work, a way that people in the industry today I think are rapidly adopting but most of the world hasn't yet adopted.
Now, to learn about this world you only have to talk to the children. Now, some of you have heard me talk before, and you know that every time I talk wherever I am I show SmokyNet, my favorite site on the Web.
And I apologize for showing it again, but I think it is so important to think about the kids -- and I urge us all to constantly talk to the kids. They know so much about collaboration. They can tell us so much about the way businesses are going to work in the future.
This is a very impressive Web site. And if you go through it, you'll think you're looking at M.I.T. or Cal Tech or UCLA. It's very sophisticated.
The average age of the systems programmers that have created this very impressive Web site? Fifteen. They don't know this is supposed to be hard; they just do it.
This is a high school out in Englewood, Colorado, in the Cherry Creek School District, 2,500 kids. They all have e-mail addresses. They have kiosks in the halls. They can walk up to the kiosk and look up a teacher's schedule, click to get a map, directions of how to get to their office for help. These kids really get it.
Now, the interesting thing is that very soon these kids are going to be looking for jobs from your company and my company. And when we talk to them, they're going to have very tough questions.
By the way, we don't get to interview these kids; they're going to interview us. They want to see if we get it. They're going to ask us, on those days I choose to come to the office, will I have a T3 at my desk, or just a T1?
Will I have a 45-inch display at my desk; or just a 21-inch display? When I call in from home, do I get access to all the systems for which I'm authorized plus unlimited access to the Web? If not, forget it, pal.
Now, the other interesting thing is there's another part of our population that shares something with these children, and that's people over fifty-five.
Senior.Net is one of the fastest-growing networks in the world. Senior.Net has trained a couple of hundred thousand seniors now. These seniors are not intimidated by this technology; they're embracing it. They're collaborating with their grandchildren, with other peoples' grandchildren.
People say to me sometimes, well, you know, this isn't simple enough yet, but when it's simple enough for my mother to use it then I'll know we're there.
I'm going to start a mother's revolt one of these days. To say "when my mother uses it" sort of implies mothers can't use it. And mothers are using it, and grandmothers are using it, and grandfathers are using it. And they're not intimidated by this.
And by the way, they have money in addition to having time. Twenty percent of the people on the Internet today are over fifty. And more than twenty percent of the usage of the Internet is by those people over fifty.
And you know, when you get to be in your eighties and you lose a loved one or a friend, how do you replace that loved one? How do you replace that friend in which you shared some common interests?
And the answer is the Web, because they're not mobile. They're not going to go move and find another friend; they'll find a friend on the Web and they'll watch the kids at holiday time over video. And it's going to be a really amazing phenomena to see.
Now, collaboration is something where we're trying to practice what we preach a little bit. We put up a site about a year ago called AlphaWorks where we introduce technology that we're not quite not sure what to do with.
Now, old IBM, we would have studied it to figure out where the market was. In fact, we would have maybe studied it until there was no market. And then we would say, we have studied this and there's no market.
So, with AlphaWorks we took a different approach and we said, let's put some interesting technologies out there we're not sure what to do with, and let people play with them.
And we had this visualization technology that we thought was really going to be pretty interesting for the real estate market and for the retail market. And much to our surprise, we found out that people saw it as being quite interesting for the travel industry.
Now, this is something brand new that just went up this week by Air Canada using our technology. There's a picture here of one of their airplanes. And you download this little [Panoramics] viewer, and you can browse around, you can zoom. Let's go in the airplane here. Business class, take a look around.
I think there's a view here...yes, let's go out on the wing and see what's going on. I could play with this all day. Let's go back to the business class again. Okay, let's go in the cockpit.
(STREAMING VIDEO/AUDIO, 3-D VISUALIZATION DEMO)Look out, Microsoft Flight Simulator!
(DEMO CONTINUES)
Hear the engines?
(DEMO CONTINUES)This pilot really stays cool, calm and collected, doesn't he? Now they're coming in for a landing.
Well, in the interest of time, I'll stop it. But please visit my Web site and download this and play with it yourself. And land the airplane, and you'll have a lot of fun with it.
Collaboration: putting it out there and letting people embrace it. Now, collaboration is going to expand in two different directions. It's going to expand down to the point where there will be Instant Teamrooms on the Web where just a couple of people can collaborate and leverage their strengths; and at the other end of the spectrum, whole industries will collaborate.
This is a project here we have going on in the automotive industry. It's quite a detailed chart, and I don't expect you're able to read it very well. But it describes all of the steps in the cradle-to-grave life cycle of products.
And when you think about the automotive industry or any industry, starting with the design, to the manufacture, to the integration with partners and suppliers, to the manufacturing of the item, to the shipment through a distribution channel, to the consumer, through the service cycle -- the entire life cycle of a product, this can happen in any industry...
Just think of the efficiencies that could be gained by using the Internet to weave all that together, to pool all that together into a common workflow. That's exactly what we're doing in this particular industry, and we'll be doing in other industries.
Now, not to be outdone by the automotive industry, the Plano Police Department has really moved forward here in collaboration. It's quite amazing what they're doing with some of our technology.
This is the main menu, and you can spend a lot of time here. I'll just give you a quick glimpse of "burglaries by street." I'm sure you're quite interested in that. Here's the point: the Plano Police Department is reaching out to the community. They are collaborating with their community.
They've established a workflow capability where they're working with the investigative department, with all the departments in the municipality. And they brought the community into this, so that people in Plano, Texas, can see where burglaries are happening, see if there's a trend.
They can report suspected burglaries or actual burglaries. There's a lot of powerful information here that is allowing collaboration at the community level.
And on a broader front, the National Center for Missing and Exploited Children is now reaching out and collaborating with the world to help find these kids.
You've all seen on the milk cartons and on the little flyers you get in the mail a picture of a missing child. Unfortunately, by the time you get that milk carton or that flyer in the mail, it's too late.
But with the power and reach of the Web, as soon as that missing child is validated as being missing, in seconds it's everywhere on the Web. And already.... Ernie Brown in Atlanta was telling me, already this site has dramatically increased the number of children who are found -- still very small numbers, unfortunately.
Well, I think there's a call to action here for us with regard to content, commerce, and collaboration. First, to re-evaluate our channel strategies -- it almost goes without saying.
Build those value-added relationships, and be trusted as a partner. Trust is going to be enormously important. With a billion people out there and a billion Web pages, how will you know if it's who they say it is? And how will you know whether or not to trust them? And how will the merchant know whether to trust you and your credit card? Trust is a big deal.
Reassess your competition: where are they coming from? Not only geographically, but from what industry -- because the network now empowers people to go into business that you might not have expected. If you type in www.insurance.com, what do you find? Fidelity Investments.
Empower your people: this is an important point. A newspaper recently had a story about people "wasting time on the Internet," and executives were quoted saying, we've got a productivity concern here.
It's the wrong question. The question is, are our people spending enough time on the Web? Are our people reaching out and looking at the Web sites of our competitors, of our customers, of the universities who are doing the key research in areas vital to our business?
Who's out there? Where's the Steve Shook of our industry? Reaching out, anybody that has contact with customers or the planning of products should be connected.
Now, when you begin to re-shape your organization to use this global Local Area Network with a billion people on it, and you begin to implement supply chain linkages and change your distribution channel, and use the Web as your single or most important relationship mechanism with all of your constituencies...
As you begin to do that, who do you put in charge of it in your company, or your university, or your government? Do you take the traditional operational people and tell them to start thinking differently and build from the inside out to the Web, re-doing your systems?
Or, do you find the people in your company that think outside of the box? The ones who are passionate about this technology and the reach and compatibility of the Web? And do you put them in charge, putting the operational people under them, and let them build from the outside in to your core systems? And re-build them when you get around to it. But it's much more important to work from the outside in than from the inside out.
Well, I'd like to wrap up by having a brief conversation about five possible limitations to all this wonderful opportunity. First is security. Will people be frightened away?
Well, I can tell you that it's very interesting to see that those people who are shopping on the Web with their credit card have no concerns at all. People do talk about other people being concerned, but people who are shopping aren't concerned at all -- because they know that they actually have more privacy with their credit card number on the Internet than they have when they give it to somebody on the telephone or at the gas station or at a restaurant.
I can tell you that SET -- the Secure Electronic Transactions protocol that is now available in the industry, and you can see it out on the floor here -- is going to be really, really important, not because of the technology itself but because it will provide consistency.
We will all have a digital wallet. And in our digital wallet will be credit cards and driver's license, healthcare cards and corporate employee IDs, et cetera.
And we will present the card of our choice when we "click here to buy." And that transaction will happen in a consistent way with the credit card companies and the merchants.
So, there's lots of room for all of these companies to compete, but they're not going to compete on this standard. And this standard will introduce, for the first time, a consistent way to buy on the Internet. And people will begin to see security not only being not a problem, but being an opportunity -- an opportunity for a more secure world, a more private world, than we have today.
Now, what about bandwidth? Will there ever be enough? Well, if you're really interested in bandwidth and an optimistic view of this, I invite you to read a paper on my Web site called Bandwidth Galore.
Bandwidth is in two parts: the backbone and the last mile. The backbone of the Internet today is made up of network access points -- a half a dozen of them in America and a few outside of America. And frankly, they're not going to last the way they are.
But underway is a new architecture called Internet 2. Internet 2 is now agreed to by 110 universities. And initially it will be a private network of those universities. But later it will subsume the Internet as we know it today, just like today's Internet subsumed the NSF Net that was built in 1988 by IBM and MCI.
Internet 2 will use an architecture of gigapops. Gigapops: billions of bits per second, points of presence all over the place. I believe in eighteen months we'll have maybe twenty of them. By three years or less, we may have fifty in the US and maybe fifty outside of the US.
These gigapops will all work in exactly the same way, built on standards and incredibly high speeds. [Erbian doped], all optical fiber amplifiers, look like they can go at maybe a couple trillion bits per second. There's going to be tons of bandwidth in the backbone.
Well, what about the last mile, you say? Nice that we have a trillion bits per second in the backbone; I've got nine bits per second to my house. Where's the bandwidth going to come from there?
And you only have to look at the competition. There's a very interesting story in this morning's Wall Street Journal interview with Craig McCaw, a fascinating story about wireless.
Wireless is going to threaten copper. Copper is going to threaten cable. Cable is going to threaten satellite. Satellite is going to threaten other mechanisms.
These half-dozen different technologies are going to leapfrog each other. And where we thought there were limits before, those limits will be broken. And we're going to have tons of bandwidth.
28 gigahertz wireless broadband into the house, ten megabits per second. It's going to happen, soon. So the bandwidth is going to be there -- an opportunity; not a problem.
Scalability? Yes, this could be a problem. More and more, you go to Web sites and it says, "try later." "Connection refused." "Too many people connected right now." Or, you get no answer -- it just hangs.
Scalability is a big deal, but it's more than just, can you handle a gazillion transactions. It's, can you handle them with reliability, availability, security, manageability, and scalability.
We've been experimenting for quite some time with this. This is a free public service out on the Internet called the Patent Server. Three thousand CD-ROMs of data, enormous amounts of information -- all the US patents filed since 1971. There's a little bibliography of these patents. You can go in and search by whether your long-lost brother-in-law ever invented anything, or you can look up the bagel slicer and see who invented that, or you can pick a patent number off of a product and go see what that patent is all about. A fascinating thing.
The reason we did it was to show that the Web is not just about starting new databases on a Web server; it's about taking very large enterprise kinds of databases and making them available to very large numbers of people.
Now, the last two possible limitations are in a little bit of a different flavor but are quite important. Regulation: some parts of the world would like to regulate the Internet. Europe is talking about a "bit tax" -- let's put a tax on the Internet traffic. We tax telephone calls, why can't we tax all the bits that go through routers? Put a meter on it.
So we could spend the next five years figuring out how to put meters on routers for purposes of collecting taxes, or we can spend the next five years building out the vision of this new medium.
France recently sued Georgia Tech. Georgia Tech has a campus in Paris. You must speak English to get in. The faculty speaks English. France says the Web server needs to be in French. Now, who cares about one Web server -- but that a government feels they can regulate, dictate what goes on a server is a frightening thought.
Jim Clark at Netscape, John Gerdelman at MCI, and myself, and a few other executives, started this Global Internet project which we announced in December in New York. It's a non-profit organization, to go around and talk to government leaders.
We're going to Brussels in a few weeks to talk to leaders there. We've been to Washington, of course; and London. We've written a paper which you can find at www.gip.org of our vision of the future of the Internet -- our collective vision, sixteen of us who are now members of this, distributing this information to key leaders around the world, encouraging them to think about the good of the Internet.
Now, the last potential limitation is equally important. And it has to do with proprietary thrusts. This is not an IBM chart that you're looking at here; this is a chart that includes IBM and a number of our staunchest competitors. We get together in the morning and have breakfast to figure out how we can work more closely together on Java, and then we go have our separate lunches to figure out how to kill each other.
And this coopetition is so important. The Internet was built on a model of cooperation. It needs to thrive on a model of cooperation.
If you believe there's going to be a billion people connected, as I do, can you imagine what it would be like to go to a Web site like the National Center for Missing and Exploited Children, and up pops a dialogue box. It says, "Halt! You can't enter this site unless you're using Release XYZ of operating system ABC." That would be a really bad idea.
And this isn't just about Windows and UNIX and Macintosh. It's not about a mere hundred million desktops. This is about a trillion things, connected to the Internet. This is about every industrial device in the world, connected.
And when they're all connected, how are they going to communicate? Where's the logic going to be? And the answer is Java. Java's going to be everywhere. It's not about the desktop.
And the concept of being able to create intelligence, to create applications and allow it to run anywhere in this network seems like a really good idea. I can't imagine anything bad about that idea.
But some companies might want to try to corner some piece of this in some way. Now, back in the old days when the information technology was tiny -- twenty years ago -- it didn't matter. It didn't matter really that IBM had a huge stake of a little-bitty market, because I/T wasn't so important back then. In fact, you could argue it was really important for a company to be able to have a large share and to be able to get it off the ground.
You could make that same argument for how important Windows has been in helping get today's market on the desktop where it is.
But in the future, this market is too big to be dominated. The I/T industry is a trillion dollar industry, very shortly. No company can nor should dominate or try to dominate that industry. So Java is more than a programming language; it's the enabler for this universally-connected world.
So, what's next? Where do we go from here? Well, I think of it as Natural Net -- this new medium, evolving, enabling this natural human interaction.
Of course there are limitations, but they'll be overcome because there are so many people working on it together.
e-business -- e-business for small business and e-business for big business. e-business for everybody, will be the driver. This is not about surfing the Web anymore.
Network computing -- computing on the network, or the networking being the computer -- how ever you want to say it -- it's becoming real. It's providing the reach and the choice for everyone.
I invite you to visit my Web site and review these charts in more detail if you'd like. It's up there live right now at http://patrickweb.com. You can enjoy these charts and fly that airplane, and look at other things that might be of interest to you.
I really enjoyed the chance to be with you. I appreciate you coming. And I hope you enjoy the rest of the show. Thank you very much.
John Patrick
Vice President - Internet Technology
IBM CorporationEmail: john@patrickweb.com
Homepage and PGP public key at: http://patrickweb.com
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