Network Ubiquity To Drive Innovation

What happens when wireless networks become inexpensive, pervasive and big enough to carry serious amounts of data? You get a condition of “squanderable abundance” where innovators can play with the network and build interesting applications on top of them.

When resources are scarce, utilization is low and applications are highly specialized. “What would ordinary people want with computers?” It takes cheap processing power, plenty of digital storage space and a big color display before digital pictures, video games and a myriad of other applications become viable, interesting and eventually necessary.

Now RFID, Wi-Fi, WiMax, mobile broadband and other wireless technologies are making the network accessible to a new level of innovation, says Emily Nagle Green, CEO of analyst firm The Yankee Group. She writes about the how we got to this place and where we’ll go from here in her first book: Anywhere: How Global Connectivity is Revolutionizing the Way We Do Business.

We caught up with Green for a few quick questions.

Q: One of the most interesting parts of “Anywhere” was where you described how Hewlett Packard used active RFID to streamline its production facilities. Did you run in to any other similar success stories that maybe didn’t make it into the book?

A: There are all kinds of fascinating applications on things telling us about themselves. The more I look, the more I find interesting stories. An example that did not get into the book that is from is Ekahau, which makes active RFID for miner’s helmets.

My initial reaction was “cool it’s a safety thing” that tells you where the miners actually are, not where we think they are. Then, in a mining incident, you’d be able to know immediately who’s behind the collapse.

The more rationale was a much more mundane issue. On a day to day basis is an enormous HVAC expense. You have these huge turbines that run to ventilate the shaft. If you could actually know where the miners are in real time, you can connect that to the HVAC system and only use it where and when you need it. The financials prove themselves out pretty quickly.

Q: Should we expect other types of innovative cost savings in the future from active RFID?

A: One of the major wastes of time of nurse time is “where is stuff” and nurses spend something like 40% of their. With active RFID, the stuff can tell you where it is. It’s about collapsing the cost impact of time. Then you don’t have to go out and buy more expensive equipment. You’re using what you have efficiently.

Q: So it’s about better intelligence on real assets?

A: Now you can generate all this information for the first time and can analyze not what we think is going on, but what really is going on. Think about putting location-reporting devices on shopping carts for example. You could get a real-time heat-map of where shoppers are spending time in the store. We have this thesis that end-caps are really valuable real estate, but maybe people are actually spending time on isle number seven because something is going on there. We don’t have to have a thesis about what people are going to do, we can find out what they actually are doing.

Q: People have been talking about this for a long time though.

A: Yeah, those aren’t new ideas. The point is that it’s only with the advent of a pervasive, affordable network to where we go from theoretical and notional to reality.

Bob Metcalfe told me that networks need to offer squanderable abundance. It’s not until we have the opportunity to squander something that we can find out what we really want to do with it. Nobody would have believed that YouTube would have worked until enough people had broadband. That’s one of the thesis of the book I wish I’d served up with greater clarity. It’s as we approach that state that we start to exploit the breakthroughs.

Q: Can we have “Anywhere” network ubiquity if the telecommunications companies aren’t investing in their infrastructure?

A: The mobile industry for the last couple of years was saying it wasn’t the crazy fun business it was going to be because most people who needed a mobile phone had one. But they’re not going to be the beneficiaries of ubiquity of mobility. The problem that they have is that there is no linear relationship between consumption and revenue for them. People consuming more of their product doesn’t bring them any extra money.

Q: This has been a big problem for AT&T lately as it has trouble keeping up with the data demands of iPhone users.

A: Broadly speaking, and this is not limited to AT&T, one of the things that has unleashed the demand for mobile apps is exciting new devices, like the iPhone. But also it is flat-rate pricing for the broadband and that’s not costless for AT&T.

Costs are going through the roof and revenues aren’t keeping up. There’s definitely some change ahead in the mobile sector where the operators have to try to rationalize the pricing models they have so that there’s some kind of connection with consumption.

Q: How do you think they’ll do it?

A: The better experience you want, the more you pay. We all understand that. We all understand first class. They need to describe to the consumer differentiated offers. Where the consumer can say: “What’s the premium experience and what’s the economy class experience?”

Emily Nagle Green’s Anywhere came out in December 2009, from McGraw-Hill.