I am writing this at the TechColumbus Luncheon with Dave Berkus, Founder and President of Berkus Technology Ventures, LLC.
Dave Berkus is an early stage venture capitalist with a hands-on
background in technology. An entrepreneur for over 50 years, he
formed and managed successful businesses in the entertainment and
software arenas, and is a respected technology industry leader and
spokesperson.
Berkus’ presentation, to a packed house, was titled “Ten Trends in Technology That Will Shape How We Plan and Execute Beyond 2008” (Note: The PowerPoint from this is available on my blog at Ideas To Deals).
A lot of good takeaways for the business looking to compete in the
future world economy. Here are the trends, Berkus’ comments and a few
of my impressions.
Many businesses and especially small businesses are very focused on
competing today. It is difficult to see the forest for the trees. But
it is critical that businesses see the future and adapt to the trends
that will drive market demand. In 1899 Charles Duell, U.S. Commission
of Patents, said “everything that can be invented has been invented.”
There have been numerous examples similar to this throughout history.
The people sighting these examples could not foresee the game changing
applications that were to come.
Innovation is the technology that will
cause “game changing behavior.” Are you ready to call an audible to
win the game?
Trend 1 ~ The growing scope of the Internet: I
remember trying to log onto the internet in the mid-90’s on dial-up
Compuserve. I can still hear that tone in my ear from all the times I
would have to restart it when it crashed. I would have to make an
effort to surf the web then and it was mostly for entertainment. That
has all changed now. This morning I was looking for a phone number and
I looked it up online, not in a phonebook. I get most of my local news
headlines from Twitter. I’ve even removed my physical address from my
business cards so I can get all of my Web addresses and social
networking contact points on the card. Burkus pointed out that in three
years, 20 typical California houses will generate as much traffic as the
entire Internet in 1995. Twelve million new users join the Internet
everyday, most of whom are from outside the U.S. The world has a population of
6.6 billion people. About 1.4 billion, or 21%, of the population, is on the
Internet and only 5% of that comes from North America. The U.S. is at
about 73% penetration relating to internet use, Asia is only at 15.3%.
Where are the opportunities? It is estimated because of the current
IP address structure in China that it will run out of IP addresses in
83 days and the US will likely run out in the next in four years. Can
you imagine the software and hardware upgrades will be required to deal
with this?
Is your business looking at the international opportunities associated with the Web?
Trend 2 ~ paradise of choice:
Consumer pull drives the economy more than producer push. Time and
place shifting is occurring in that we can watch what we want, when and
where we want. This is what I love about the internet: I’m in
control. Power to the consumer! The TV show Battlestar Galactica
(which I’ve never watched) was about to be canceled until someone
realized that the viewership of the show was on the Internet. The
consumer decided where they wanted their content and the networks had
to respond.
This is also becoming the “Age of Recommendation” due to the internet.
- 69% of consumers research products on-line.
- 62% look at on-line peer reviews.
- 39% compare prices across outlets.
This democratization of search will drive down prices. This will
also lead to accelerated product innovation. We want it now! A great
example of the power of the individual is podcasting. I used to have
tapes and CD’s that I listened to in my car. They were usually kind of
expensive and not all of the content was pertinent to me. Now I have
many more choices relating to specific content though podcasts, and
they are free. Berkus feels you will see more extensive podcasting
networks empowering smaller players and moving power away from the big
producers.
What is your enterprise doing to respond to the shift of power to the consumer?
Trend 3 ~ The audience is the network:
The democratization of “production”, “distribution” and “search” are
changing the landscape for doing business. Once again moving power to
the consumer.
- Production ~ Make It: PC music, Wikipedia, iMovie are
ways the power of peer production is growing exponentially. It is no
longer necessary to spend time or money to get many things done. You
can do it. - Distribution ~ Get it out there: Electronic distribution
is moving bits not atoms. Moving inventory has dramatically changed
due to technology. I spoke to a person from 2checkout.com
today. I’ve only recently become familiar with them but they have
really taken off. Compare them to SubmitOrder.com of the late ’90’s.
SubmitOrder’s business model was to do distribution for the big
dot.com’s. 2checkout provides e-commerce solutions to anyone at a
fraction of the infrastructure that would have been needed by
SubmitOrder. This isn’t because SubmitOrder was wrong in what they
were doing but rather due to technology advancements. - Search ~ Anyone can sell. Anyone can publish. Anyone can help me find it. The choices are almost overwhelming. Take your pick.
How are you tapping into the game changing marketing opportunity? Are you fast enough, responsive enough?
Trend 4 ~ Increasing computer power drives changes in human behavior: Increased
computer power is increasing the emphasis on productivity. You can do
more with less and move forward and exploit new opportunities faster
due to technology advances.
What product or services could you add that you could not deliver yesterday?
Trend 5 ~ I AM THE OFFICE: Computing is changing
our life. About 12% of people have smart phones (it was about half at the
meeting but that was a tech crowd). Information and communications are
available everywhere. The Apple iPhone interface will start revolution
in usable mobile computing devices. Video/web-conferencing is becoming
a usable reality. As travel becomes more expensive we should be
rethinking how we communicate.
Japan is the first country to see a reduction in PC purchases in
favor of mobile devices. More than 1/2 people on earth have cell
phones. Over 80% in US have cell phones. Unified communications are putting the office in your pocket.
Have you taken advantage of “mobility” as a corporate strategy?
Trend 6 ~ Consumer electronics spending dominated by HDTV and convergence.
Berkus recently attended the Consumer Electronics Show in Las Vegas. His observations:
- He felt that the connected digital home and HD video are the
primary trends. Digital TV was 56% of US TV’s in December 2007. In
February 2009 that number will go to over 80%. - 250 million computers sold worldwide. Intel is working on a 10x performance at 1/10 the power.
- Gaming leads with US software sales of $7.8B in 2008 exceeding US Box office receipts of 2005.
- Wireless electric charging of CE devices creating wireless power
through the air. Will be recharging devices wireless through the air.
Intel is working on this so it is not as far away as you might think. - Digital home entertainment servers centralize content acquisition
and storage. You can be the source of the entertainment by creating
your own entertainment and bring people/family from around the world
into your home. - IP-TV and WIFI phones are a real and growing segment. Devices will be driven by voice and movement.
What is your company doing to exceed the expectations of the newly-sophisticated consumers?
Trend 7 ~ Web 2.0 enters the mainstream: I loved
this one because this is where I’m at now. Someone asked me today how
we were able to handle all of the web 2.0 stuff we are doing and still
develop programs and meet the needs of our clients. It is now part of
our culture in the SBDC. For your company young people familiar with
social networking that are entering workforce and will drive widespread
deployment. Business MUST adapt. IT departments will have to decide
how to deal with this in relation to their firewall. Facebook is a
platform now. Facebook has 55 million users and since May 24, 2007
with the launch of open API over 18,000 applications have been
developed.
How can your organization better communicate using these tools?
Trend 8 ~Web 3.0 – 4.0 / way beyond search: Berkus discussed the next wave of the Web.
- Web 3.0: the Semantic or natural language Web:
Attached meta-data to information stored on the Web will create a rich
card catalog on top of data. The computer will want to interpret what
you ask in order to give you better results. - Web 4.0: The Ubiquitous Web: Conducting intelligence in to
smart networks. Intelligent networks communicating with other
intelligence networks. You and I will give up a variety of our tasks
to these new assistants.
Does your company’s marketing message provide meaning not just words?
Trend 9 ~Everything turns green: While innovation
and computing demand are providing unparalleled advances, it is also
driving increased energy consumption. Energy required to power and
drive the new advances will have to be addressed in an environmentally
sustainable way.
What initiatives have you undertaken to “green” the economy?
Trend 10 ~The CIO becomes the Business Strategist:
As Information technology (IT) becomes increasingly important to
success of organizations the Chief Information Officer (CIO) will
become a major player in developing business strategy. Data mining is
becoming critical to business success. The CIO will determine how to
invest capital more effectively to reduce cost, improve productivity
and achieve corporate objectives. IT must embrace the new realities of business and corporate leadership must accept the new roll of IT in
business strategy.
How are you adapting to the new reality of business strategy?
(Image source: Masternewmedia.org)
