How to Ride the Fifth Wave【转】

How to Ride the Fifth Wave

CHEAP COMPUTING, INFINITE BANDWIDTH, AND OPEN STANDARDS ARE POWERING AN EPIC TECHNOLOGICAL TRANSFORMATION THAT WILL CHURN UP HUGE NEW OPPORTUNITIES—AND PERILS FOR THOSE WHO CAN'T ADAPT.

By Michael V. Copeland

July 1, 2005

原文

    (Business 2.0) – Rick Rashid makes his living staring off into the distance. He's head of Microsoft Research, the software giant's R&D arm, and it's his job to peer far over the horizon to divine where technology is headed. He ponders out-there issues like what each of us could do if there was enough computer storage to save every conversation we have from birth to death, or what happens when giant LCD panels become as cheap as today's whiteboards. Which makes it slightly incongruous that, at the moment, he's sitting in a Victorian-era hotel talking about steam engines. The setting is San Diego's Hotel del Coronado, built in 1888, and Rashid is explaining how a blast from the past has given him a new notion of the future. On a recent vacation to London, Rashid visited Britain's Science Museum. He lingered before an exhibit of one of James Watt's earliest steam engines and others that followed in various sizes and configurations. It occurred to Rashid that in the 19th century, the answer for every engineering problem was a steam engine. If it was a big problem, it was solved with a big steam engine. Small problem? A small steam engine sufficed. Steam engines were everywhere. The technological muscle they provided sent Britain and ultimately the rest of the world chuffing into the industrial age.

Then it hit him: "I realized that we are coming into a stage now where our version of the steam engine is the microprocessor and software," Rashid says. "We are getting to a point where it is truly cheap and easy enough to put a combination of processors and software into anything, for any reason."

Rashid is on to something. We are now in the initial stages of a technological shift that may someday merit its own proud place in the museum. Roughly speaking, the history of computing has unrolled in four major waves. The first came in the 1960s, as mainframe computers advanced into the corporate world and became essential business tools. The 1970s saw the wide adoption of the minicomputer. Then came the personal computer in the '80s, followed in the '90s by networking and the Internet, and the spread of distributed computing. Each successive wave of technology brought with it giant leaps in productivity and huge increases in spending. Each transition lifted some companies (think IBM, Microsoft, Yahoo, Google) and swamped those that couldn't adapt (think Wang and Digital Equipment).

Now comes computing's fifth wave. It's different from the sea changes that came before it. For the first time, the shift isn't driven primarily by a single piece of hardware or by how corporations deploy it. Instead, it results from the unprecedented coalescence of three powerful technological forces: cheap and ubiquitous computing devices, from PCs to cell phones to tiny but potent systems that are beginning to show up in everything from bedroom lamps to key chains; low-cost and omnipresent bandwidth; and open standards—not just Linux source code but the opening of other software as well as corporate databases. The fifth wave puts computing everywhere. It offers access to limitless amounts of information, services, and entertainment. All the time. Everywhere.

Best of all, the fifth wave serves as a framework to understand where most of the juiciest opportunities in business are emerging today. It will coincide with, and in some ways fuel, a surprising increase in corporate IT spending. And as the new wave sweeps in, it will create fertile conditions for starting new companies—even new industries—and remaking old ones. It won't always be smooth sailing. "It's not going to be this linear progress that we've seen so far," says Dick Lampman, head of Hewlett-Packard's research labs. "It's this perfect storm of technology rolling in, and it presents thousands of new opportunities to develop devices and services." For anyone who has ever dreamed of building a game-changing, money-gushing new enterprise, the message is unmistakable: Surf's up. And if you catch it right, the fifth wave could be a mind-blowing ride.

All big technological leaps build on the advances that came before them. Watt's steam engine, for instance, was based on a coal-mining pump designed by the now largely forgotten 18th-century inventor Thomas Newcomen; ultimately it was the combination of the steam engine and that classic of early invention, the wheel, that revolutionized transportation and brought us the industrial age. In the case of the fifth wave, the springboards are a set of familiar but, historically speaking, relatively new technologies that now have matured enough and found a large enough audience to create a wholly new tech terrain.

The Web, of course, is fundamental. In addition, relentless com-modification has driven the cost of computer hardware, and storage in particular, to relative peanuts. Cheap mobile phones and other handhelds now pack as much computing power as workstations did five years ago. More important for the fifth wave, broadband is practically everywhere, and it's blindingly fast. Today's local area networks move data at a gigabit per second. That's a full-length DVD-quality movie every 38 seconds. Wireless technologies, chiefly 3G (third-generation) and Wi-Fi, are expanding rapidly, making the Internet ubiquitous.

A less understood but equally critical development is the spread of technological openness. The open-source movement has created a global tinkerer's workshop, where thousands of creative minds are constantly cobbling together code that entrepreneurs and even established businesses can cannibalize, free of charge, for parts to build new software systems. But fifth-wave pioneers grasp another dimension of technological openness: Many have begun to open up their own databases and software protocols, allowing the tinkerers to create related applications or sell symbiotic products and services. Amazon has taken this approach further than anyone, and Google isn't far behind. (See "The Great Giveaway," April.) "Open-source changes the rules of the game," says Tim O'Reilly, founder of tech publishing powerhouse O'Reilly Media. "Anyone can add and innovate, bring new pieces to the party."

Together these forces have created the technological infrastructure from which the fifth wave is rising. In essence, we are now surrounded by a kind of ecosystem of connectivity, unseen but everywhere, constantly growing, seemingly by itself. One of the distinguishing characteristics of the current shift compared with past ones is how much it is expanding from the grass roots up. Corporations supply some of the momentum, to be sure. But to an unusual degree, consumers are powering the fifth wave, as armies of mobile users discover new ways to exploit the connectivity that surrounds them—and businesses pop up to cater to them. Downloadable ringtones constitute an industry worth $2 billion a year. Sales of downloadable screensavers for cell phones have gone from basically nonexistent in 2001 to an expected $275 million this year.

There's another singular aspect of what's happening now, one that by itself creates enormous opportunities. A hallmark of the previous four waves was the almost direct correlation between hardware and software. If Intel made a new chip, Microsoft came up with a new operating system that could make use of the extra oomph. The platform and how it could be used basically moved in predictable lockstep. This time, however, the platform—broadband networks and the Internet—is already in place, waiting for applications to catch up.

Dozens of fifth-wave companies have been born into that breach. Salesforce.com drew snickers a few years ago when it came up with its model of allowing customers to essentially rent the company's enterprise software over the Web. Among other things, some observers predicted that Salesforce's programs for managing basic business functions like sales and customer service would jam up customers' networks. But because of the growth in bandwidth and cheap storage, that never emerged as a serious issue. Delivery over the Web reduces Salesforce's distribution costs to next to nothing. And the company is sizzling: Its first-quarter profits rose 10-fold year over year to $4.4 million, its revenue jumped 84 percent to $64.2 million, and its stock is up 24 percent this year to about $21 a share. Salesforce is still relatively small, but its impact could be huge: Other software makers, from Siebel to Oracle, have begun to sell programs the same way. "Customers are in open rebellion over the high cost of enterprise software," says Salesforce CEO Marc Benioff.

Skype, another fifth-wave pathfinder, may similarly transform the phone business by wielding the weapons of cheap computing and bandwidth. Niklas Zennström and Janus Friis, the brains behind music file-sharing service Kazaa, created Skype in 2003 to provide phone calls over the Web. They spent almost nothing on marketing; the company is basically a roomful of off-the-shelf servers and a tiny peer-to-peer program, downloadable for free from the Web. Skype users can essentially call anywhere in the world to PCs, cell phones, or old-fashioned wired handsets. A half-hour call from, say, San Francisco to London over a Cingular cellular network costs $5.70 or more. On Skype it costs 69 cents—which is why Skype now has 41 million registered users and is in the process of pulverizing traditional long-distance carriers.

Salesforce and Skype make a lot of noise because of the disruption they're causing to long-standing business models. But there are many other companies flourishing beneath the radar that have even more fully embraced the technological convergence driving the fifth wave. Ambient Devices was founded in 2001 by a group of MIT Media Lab refugees specifically to exploit the fact that it's now cheap and easy to put computing anywhere. And they meant anywhere. Ambient has, for instance, put a computer in a lamp that changes color every time the Nasdaq rises or falls, or when a sunny day turns to rain.

The Cambridge, Mass., startup's combination of software and chipsets allows a wide range of devices to wirelessly pull data from the Internet about weather, traffic, the stock market, and other subjects, and display it as changing colors in a glowing orb or simple movements of a needle against a graphic. In the space of six months before the 2003 Christmas buying season, 10 people at Ambient set up a wireless network that covers 90 percent of the United States, developed a content platform, and manufactured the company's first product, the Orb, to be sold by Neiman Marcus and Brookstone. The clever color-changing object flew off the shelves, and now Ambient products are sold by more than 50 retailers. Ambient won't disclose specific financial figures, but its COO, Nabeel Hyatt, says sales doubled last year and the company is already profitable.

Ambient is a poster-child fifth-wave startup: It used chunks of open-source code as the core of its software. Rather than build its own wireless network, which would have cost hundreds of millions of dollars, Ambient cut a deal with telecom company USA Mobility that let Ambient use existing infrastructure. Data from the Internet was already available, and setting up a Web-based interface for people to program their Ambient toys was a breeze for the MIT brain trust. And since the company is piggybacking on the Internet and an existing wireless network, it can easily scale to millions of customers. "Ultimately we will embed the technology inside all kinds of devices that display information from the Internet for all sorts of manufacturers," Hyatt says. "It's an incredibly broad opportunity."

As Ambient illustrates, the ability of a company to easily scale services from a single customer to millions is a defining feature of the fifth wave. Gordon Ritter, a VC at Emergence Capital Partners in San Mateo, Calif., says the secret to doing that is the "Amazon-ification" of software. People tend to think of Amazon as an online store, but it can also be viewed simply as a software platform for delivering a service over the Web. Its interface is customizable down to the individual user, it learns about customers' preferences, and it scales from one person to millions almost effortlessly. Ritter believes all software will soon function that way.

One of Ritter's recent investments is SuccessFactors, which sells subscription-based human resources software heavily underpinned by free open-source code. Success-Factors offers a highly customizable set of HR applications that are accessible using any Web-enabled device. The big shift, Ritter says, has been to design SuccessFactors for millions of individuals rather than taking the traditional approach of tailoring it for specific companies. "It does away with the old schism between the enterprise and consumers," Ritter says. "It brings service at companies down to the level of individuals in the same way that Amazon does with its customers." SuccessFactors CEO Lars Dalgaard says he's considering mimicking Amazon further by opening up his company's protocols to anyone who wants to create related services. SuccessFactors's revenue is expected to double this year to $50 million.

By its very nature, the always-connected era creates massive flows of data, and a race is on to develop software systems that help companies deal with it. El Segundo, Calif., startup Siderean Software has created a powerful application designed for needle-in-the-haystack searches of all the data within a corporation, from customer information to radio-frequency tag readouts to e-mail. The software, which contains kernels of open standards, is industrial-strength, but nothing that today's powerhouse corporate servers can't handle. Founder and CTO Bradley Allen says Siderean's software sorts and displays search results in more intuitive and contextual ways than, say, Google. "It's like finding an ethnic restaurant by pinpointing 'restaurant,' 'ethnic,' 'Moroccan,' and 'Fifth Avenue' in a 15-second look at the Manhattan Yellow Pages," Allen explains, "vs. searching page by page through the White Pages for a week."

Some of the richest opportunities churned up by the fifth wave are in the tricky but vital need to better merge the computer and the telephone. There remain significant technical hurdles to seamless interaction between the two technologies—as witnessed by anybody who has had to repeatedly punch in a credit card number to buy something over the phone. In 2000, startup Audium used an open standard called VoiceXML to cook up software that essentially translates voice or data input by punching phone buttons into a digital form readily understood by a corporation's database and other computing systems. Audium is already profitable. Another startup, Transera, has developed software based on free Linux code and other open standards that allows call centers to micromanage incoming calls—routing particular problems to operators with specific expertise, for instance, and allowing manufacturers to track customer interactions with their offshore support staff in minute detail. "We are marrying the computer to the phone," says founder and CEO Prem Uppaluru. "A few years ago, this was not even technologically possible."

Startups aren't the only ones eyeing the onrushing fifth wave. Much of tech's old guard is frantically trying to figure out ways not to get swept away by it—and some very entrenched companies seem surprisingly well positioned to drop into it and ride. IBM, for instance, has been retooling itself for several years with an eye toward the coming change. Big Blue prefers to call it "on-demand" computing, but however it is described, it's influencing everything CEO Sam Palmisano is doing. The recent sale of IBM's PC division to China-based Lenovo was a highly symbolic clearing of the decks in preparation for focusing intently on the fifth wave. Palmisano also has embraced the open-source movement and poured money into developing Web-enabled services and software. "If you look at all the hot computing trends of the future, IBM suddenly has a very strong foothold in all of them," says Arnie Berman, senior analyst at CreditSights and an early proponent of the fifth wave.

IBM's approach to the shifting landscape is to retreat from the PC hardware business. But that doesn't mean there's no opportunity for hardware makers. Chipmakers like Intel and AMD essentially see their future not on the desktop but in mobile devices that plug into the new era's all-enveloping connectivity. On a recent afternoon, Fred Weber, AMD's chief technologist, holds up an Audiovox cell phone that sports a mobile Windows operating system and declares, "The action is all here." AMD still makes the lion's share of its money on processors for PCs, but it has started to roll out chips for smaller, always-on gadgets. "It's mobile, connected devices—that's where the future lies," Weber says. Similarly, Cisco, a big fifth-wave adherent, is adjusting to cash in on the trend—and in many ways already has. As devices proliferate and networks expand, demand for the Cisco switches and routers that connect them and direct Web traffic could explode. And Cisco is expected to rack up $1 billion in sales of Internet phones this year. Says Cisco CTO Charlie Giancarlo, "This shift is going to be monstrous."

And scary, for those who don't get it. There are already some big tech names that show every sign of wiping out on the fifth wave. America Online (owned by Time Warner, the parent of this magazine) continues to flail, in large part because it has never understood the value of opening up its business the way Amazon and Google have. It remains trapped in its "walled garden"—and continues to bleed customers. AOL is about to unveil a new public portal that offers more free content, but many experts believe the wave will wash over AOL in the end. Even eBay, an Internet paragon in many ways, has been tentative in opening up its own databases and protocols, a stance that some analysts believe could throttle down its spectacular growth as the technology era shifts. Apple Computer is flying high right now, but given Steve Jobs's legendary resistance to opening up his technology, including the iPod, even Apple could get swamped by the fifth wave.

Over the long haul, one of the most important implications of the fifth wave is that it could create a more level playing field than the tech industry has seen in many years. The old titans may still do well. But many experts believe that the sheer number of opportunities, the cheapness of basic technological components, and the ever lower barriers to entry for many new niches could ring in a golden era for entrepreneurs and upstarts.

iRobot CEO Colin Angle, a man who dreams of putting a robot or three in every home, is one such enthusiast. He has reason to be hopeful these days: iRobot's annual sales are nearing $100 million and jumped 73 percent in 2004. He sees the fifth wave as a mighty equalizer. "If we are willing to envision a ubiquitous network, with ubiquitous storage and computing, that is a world where the Microsoft and Intel platform is not the king anymore," Angle says. "Innovative entrepreneurs get to play again under this scenario. Stupid, crazy stuff that no legitimate risk-averse company would try gets tried now."

James Watt could relate. When he first unveiled his steam engine, some of the few people who even knew about it thought he was a fool. That was in 1765. Watt himself had doubts, and took to referring to his soot-belching contraption as "Beelzebub." But then people began to realize what his technology could enable. Within two decades, Watt's engines were running England's cotton mills. In just a few more came the first steam locomotives, and soon thereafter the world was utterly transformed. The big waves are like that. They can start small, almost unnoticed, but they change the look of everything by the time they break on the beach.

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