Category Archives: Early Stage

Media megatrends

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Exerpt from: The Long Tail
See also: Telecom Watchlist / Industrial Evolution

Telecom Watchlist / Industrial Evolution

There are clear innovations and implementations of current technology that can be safely called inevitable. One of these is ubiquitous wireless. We will be surrounded by secure broadband available by subscription, and compatible with wireless devices. Wireless devices compatible with broadband will include laptops, PDAs, phones, and electronics built into vehicles, etc.

If this is true, then some industries will join the buggy-whip industry:

Phone companies: why pay for phone service if your wireless phone is a tiny part of a cheap broadband service. Internet traffic incurred by telephone quality duplex audio is a drop in the bucket.

Cable providers: If I have access to streaming video straight from the media companies, why pay a cable company for anything? I might pay HBO for access to their channel, but there is no room for Comcast. The old line between broadcast and cable TV will be irrelevant.

Traditional and Satellite Radio: Internet radio is already catching on. When devices and wireless grow to maturity, there is no need for radio. Your music preferences will be targeted much more specifically than a set of 20 FM stations can satisfy, making the listening experience far better. The 2-way directionality of streaming radio (broadcasters know what IP addresses are listening, and when) make the value proposition for advertisers far better. Finally, the global nature of IP eliminates the problems of range and signal quality.

I don’t mean to sound gloomy, in fact, this is not a gloomy forecast. Leaving horse drawn buggies for cars was a major milestone in economic advancement. So too, leaving single-application wires for IP-based wireless broadband is going to be a great milestone. Communications technology is the lubricant of innovation and trade. I would expect global growth to accelerate into these advancements, and remain at a generally accelerated pace thereafter.

In this speculative possible state of the world, investors might benefit from:

underweight companies with revenues largely based on phone, cable, and radio

underweight traditional-radio advertising companies

overweight equities

overweight internet advertisers and IP-intelligence aggregators

overweight internet applications providers

Invest in Biotech and Information Sciences

If we invest heavily in biotechnology and information services companies (especially genomics, networked centralized computing, neurology, neural network predictive applications, and nerve regeneration) in the next 50 years, many currently living people may have an opportunity to achieve substantially improved and lengthened quality of life and indefinitely extended sentience.

It’s more than a financial return, but it can still be evaluated financially. The return on these investments should be calculated as the return on the securities themselves, plus the return on your other investments over the period of time that your life and investment horizon are extended. It is possible, then, that the net return on biotech and information science investments may be substancially higher than the direct value change for those investment securities.

SOAP, .net, and the ubiquitous internet cloud

Microsoft’s recent major push to develop the .net platform is an attempt to aggregate and brand all internet services into the Windows operating system. And it just might work. SOAP and .net are sometimes referred to as a “cloud” because of the distributed nature of the processing; your machine accesses a server which renders your display based on stored interface components and applications that are potentially stored on different machines anywhere else, controlled by anyone else. I think that it is a key new technology and that it will play an important role in the development of communications technology in the next few years.

What is this technology? And where does it take us?

SOAP and .net use techniques that enable distributed computing and webserving. In other words, they allow web applications to run on independent computers and independent of the look and feel of the web site. Applications developers will want to adopt this technology because it means that they can focus on the application and spend less time on the user interface. Portals will want to adopt this technology because it means that they can integrate many external services and make them available to their users. Microsoft, I believe, is in the process of building this technology into their Windows operating system in order to enable any internet application to be run without leaving the Microsoft-controlled environment.

There is a programming design heuristic that is based on the separation of model, content, controller, and view. SOAP is analogous as it enables the separation of the model. The dominance of this design for programming was very strong, and similarly, the dominance that SOAP enables will likely be very strong. Effectively, The potential of XML is captured through the definition of protocols for the distributed exchange of applications.

What is the risk?

If .net is successful in becoming the dominant channel for web services, then there is a strong likelihood that Windows will combine the operating system and portal functionality to provide the complete computing experience. Microsoft will have the ability to target services, advertising, applications, communications, and other information to each individual. Further, web services will be conveniently available through integrated Windows applications, reducing the need for browser-based web access. Specifically, it will mean that the internet will be able to be re-faced with a Microsoft-branded front-end, and a selection of web services defined by Microsoft.

What is the potential?

In order for .net to become only one of many popular web service aggregators, the SOAP protocol must never give advantage to Microsoft over other aggregators. If SOAP (which stands for simple object access protocol) remains open in such a way that any portal can aggregate any SOAP enabled web service, then the result will be wonderful. Specifically, it will mean that the entire internet will be able to be re-faced with a customizable front-end, and your selection of web services will be personalized and context dependent based on specifications you select.

Centralized Computing Platform

The world needs a platform for centralized computing that enables anyone to commercially publish their intellectual properties through any networked device using their own interface. This platform could be supplemented with advanced and semantic search accross all IP, as well as access to any distributed web service through SOAP.