European Affairs

Spring 2001

 

Special Report: Trends in Information Technology
The Internet Revolution Has Hardly Started
Michael R. Nelson
Director, Internet Technology & Strategy, IBM

 

Over the last five years, the explosive growth of the Internet has transformed industry after industry, from publishing, to music, to stock trading. But, it is only the beginning. The next generation Internet will be far more powerful, more ubiquitous, and more useful than today's Internet, and its impact will be far more pervasive, more profound, and more global.

When I am asked to forecast what the Internet revolution will bring, I often quote the refrain of a 300-year-old song sung by British soldiers: "We won't know where we're going 'til we're there." Today, we may be able to get a sense of where the technology is going, but it is impossible to know all the ways that technology will be used and all the impacts that those applications will have.

If you extrapolate from technology trends over the last 20 years you conclude that: in four years, since both software and hardware are getting cheaper, you will be able to buy ten times as much computing power for a dollar; in five years, you will be able to buy ten times as many transistors for a dollar, and the cost of transmitting a megabit of data is likely to plummet at least 99 percent; in six years, you will be able to buy ten times as much data storage for a dollar. You might also note that in the past five years, the capacity of long-distance data networks has increased a hundred-fold.

Any one of these trends would be enough to cause a fundamental and wrenching change in the IT and telecommunication sectors. Taken together, they will lead to profound changes throughout the economy.

In its annual Global Technology Outlook, IBM Research examines the effect of multiplying these trends together. First, the researchers calculated how much data is available on the Internet today. They came up with roughly one petabyte of information - that is a one followed by fifteen zeros - or hundreds of times the amount of information in the world's largest library, the Library of Congress.

Then they extrapolated to the year 2010, when we expect there to be one zettabyte (1021 bytes) of information on the Internet. That is a million petabytes - a million times what is available today! This is the result of more people spending more time and using more data-intensive applications, such as video conferencing and even 3-D video.

To understand how this technology will change our lives, it is useful to look at the past and examine other transformative technologies: the telephone, the automobile, the printing press, and the radio. Those inventions fundamentally changed the way we think, act and do business.

Consider electricity. Starting in the 1700s, Franklin, Ampere, and others did the basic research needed to understand what electricity was. Volta and others, mostly in Europe, developed batteries and some early applications. You could go to the World's Fair and see an electric generator.

It was not until the late 1800s that Edison invented the light bulb and gave every homeowner a reason to use electricity. Since then, we have developed thousands of different uses for electricity. It has become so ubiquitous that we do not even think of it as a technology anymore - it's just there.

While electricity took over 250 years to become the staple of today's technology, the Internet has taken only 30 years to evolve to a universal technology. In the late 1960s, the U.S. Department of Defense funded the first basic research on the Internet.

In the 1970s and 1980s, the university research community developed the first applications of the Internet. By the 1990s, the web and the browser emerged, creating an environment where ordinary people could use the information available on the Internet.

Today, we have reached the "light bulb" stage in the evolution of Internet technology. We shall not realize the full potential of the Internet until it is part of everyday life - like electricity is today. When we reach that point the Internet will be as reliable and as ubiquitous as electricity and you will use it in hundreds of different ways and hundreds of times a day.

When we get there, we shall never again talk about "going on the Internet." We shall be using it all the time, sometimes without even realizing it.

That is why I like to say that the Internet revolution is less than three percent complete. Less than three percent of the world's population is online. Consider the total number of devices, the amount of bandwidth, the total number of web pages, and the number of ways we use the Internet today and compare it to what we will have in five or ten years. It is clear we are only at the start of the Internet revolution.

At IBM, we are already working hard on what we like to call the next generation Internet (NGi). We have a group dedicated to developing the combination of computer hardware, software, middleware, and services that will provide high-quality, high-speed video applications and other broadband applications over a network that is secure, reliable, and connected everywhere all the time (see http://www.ibm.com/Ngi).

Video conferencing will be as easy as faxing. Wireless and satellites will link you, instantaneously, to almost anywhere on the planet.

The next generation Internet will be fast, so you will not have to wait for the technology to do its job. It will always be on, and you will never have to "dial in" again. Thanks to wireless technologies, it will be everywhere. And it will be natural and intelligent, so you can easily find and use the information and services you need.

It will be easy, so you don't have to read manuals or worry about what format a file is in.

And, and maybe most importantly, it will be trusted. The NGi must provide the security, privacy, and authentication that users need and want.

One of the most important applications will be e-business. E-business is different from e-commerce, which is about selling books and CDs and computers and software and other products over the Internet.

E-business is about transforming the way companies, government agencies, and other organizations function. It is about enabling every employee in a company to collaborate easily and effectively with any other employee.

It is about making information and on-line training available when and where it is needed. It is about linking companies to their suppliers. It is about new, less expensive, and more effective ways of interacting with customers.

But that is not the last stage. We see on the horizon a set of technologies that will create what we call the Web of Commerce. Every person in a company will be linked to each other with high-speed, broadband networks that provide not just e-mail, but videoconferencing and the ability to collaborate effectively.

Those employees will be connected to all the employees in all the companies across their industry and across the economy. That is why we call it a Web of Commerce, because the entire society, the entire economy will be linked in a new, fundamental way.

The next generation of e-business is a huge opportunity. All trends indicate that by the end of 2001 over $1 trillion dollars will be generated through e-business. The only thing we know for certain is that the estimates for e-business have always been low.

In the electronic marketplaces of the future we shall have good encryption, anonymity, and e-money. Money will flow across the Web as easily as e-mail today - but more reliably. It will be a very different world, one that is going to be very challenging for companies and governments.

Governments around the world are realizing that they have to take advantage of this technology and they have to foster e-business. In the United States and other countries, industry leaders and government officials have worked together to develop an outline of just how governments can help support the evolution of the Internet:

• As a prerequisite, we need government funding for basic research and education. The biggest problem for all industry is a lack of available IT skills to create and manage the technology.

• The telecommunications sector must be deregulated. Without affordable high-quality infrastructure, none of this will work.

• The outdated rules that make it impossible to transact certain types of business online must be eliminated.

• Governments must lead by example, becoming e-businesses themselves.

• Pilot projects must be funded in certain key sectors, such as education and health care.

• Citizens must be helped to understand and cope with the Internet Revolution. We are going to see a serious backlash as the changes brought by the Internet spread throughout society. Although it will not be easy, governments can help make clear that the change is necessary and that the benefits are huge.

he Computer Systems Policy Project, which is made up of the Chief Executive Officers of the 11 largest computer hardware companies in the United States, recently published a primer on the impacts of the next generation Internet called Living in the Networked World. (Available at www.cspp.org.) It nicely outlines how governments and companies can work together to realize the potential of what lies ahead.

Governments are unsure of how the next generation Internet will affect them. They are not sure what it means when a government becomes an e-business. Governments must realize that the Internet will mean they have less control over news outlets and content, telecommunications networks, the value of their currency, or the movement of capital.

As we move to this new world where everyone is connected with high-speed connections, where authentication is available, where anonymity is available, and where encryption is available, it becomes almost impossible for governments to exercise control.

It is very clear that in the new world, where satellites connect you to any point on the globe, where e-mail is encrypted, and where money flows freely across international networks, governments are going to have less sovereignty.

But there is something beyond sovereignty. In some cases, self-regulation is going to replace government regulation. National and international entities, whether business associations, intergovernmental organizations, or ad hoc consortia, will come together to develop ways to regulate what used to be regulated by governments.

We shall see that national sovereignty will be replaced, in many ways, by personal sovereignty. More decisions will be made on the local level because local governments will have more information and more expertise than they have today. The technology will empower each of us to make choices for ourselves that used to be made for us by governments. Individuals will have more information, more control and therefore, more decision making power.

The nations of the European Union, for example, have tried to specify what kind of personal data can be collected on-line and how it can be used. But the next generation Internet will be fundamentally different from today's Internet, and many of the rules the Commission is promulgating will not work well when applied to the new applications and new devices that the NGi makes possible.

As an alternative, companies in both the United States and Europe are promoting a standard developed by the Worldwide Web Consortium, called P3P, the Platform for Privacy Preference. This standard enables you to set your browser to provide the level of privacy protection that you want.

Using P3P, your browser will only allow you to visit those sites that meet your personal privacy standards and will warn you if you try to visit a site that requests more personal information than you are willing to divulge.

This platform is being developed globally, so it will work everywhere, unlike national regulations of today. It is technology that can evolve as fast as the Internet, unlike regulation.

Most importantly, it is flexible enough to allow differing individual ideas and needs for privacy. With tools like these, each of us will be able to get what we want from the Next Generation Internet and not have to wait for our government or some international body to protect us.

The next generation Internet will have profound impacts on our lives and our organizations. The Internet will be as disruptive as the printing press, which made the Reformation possible.

Martin Luther's ideas would have had much less impact if they had not been printed on paper and disseminated across Europe. The Reformation led to the Thirty Years' War, which redrew Europe's boundaries. There is even an argument that the printing press was a prerequisite for representative democracy. You would not have had widespread literacy if you did not have affordable books, which were made possible by the printing press.

The printing press accomplished all this by reducing the cost of disseminating information by a factor of about 100. The Internet has already done that in the last 15 years and the estimate is that it will do it again in the next ten years. The cost of a byte of information is plummeting.

The only thing we know for certain about the next generation Internet is that some of the most exciting and most important applications will be those we cannot even imagine today. We cannot use old regulatory, economic or business models for this new medium. It is clear that these all have to change.