October 06, 2003
The next big thing

Fred Wilson, a New York based VC agrees to Guy Chiarello's (Morgan Stanley CTO) comments:

(Chiarello say) "I have stopped worrying about the next big thing, I just worry about my big problems, which are security, open source, business continuity, systems management tools, etc".

This is so true. The reason why the Internet was so big was that it changed the whole paradigm of the technology business. Now we are in an evolutionary paradigm, not a revolutionary paradigm. We've built an open, connected, computing platform that scales and evolves bit by bit, piece by piece. And as such, there won't be a next big thing in tech for a long time.

But we've still got big problems, some of them created by the architecture of the net, some of them created by the the hyper competitve global economy we are in, and some of them created by the increasingly tense world we live in.

So get used to it. Stop looking for the next big thing and start solving problems. That's the new way to make money in tech."

This is bang on target. All this enterprise scale naval gazing on the future of tech is ridiculous. There is otherwise intelligent magazines like 'The Economist' which published an entire survey on IT industry to convince us that IT is now a matured, cyclical industry where the gold will come out of efforts to make existent technologies more useful rather than from emergent technologies (The survey is well written and worth reading, even though its conclusions are wrong headed). Then there are people like David Carr who is now writing a whole book explaining how IT does not matter.

What people often forget is to differentiate between emerging technologies and matured information technolgies. Most people tend to put both maturing IT and emerging IT in the same bucket when talking about growth. This is wrong. This is doubly wrong when you try to track the growth of maturing/matured tech companies like Amazon or Cisco as a yardstick for measuring the growth of emerging technologies (a point I started to make in a comment in Barry Ritholtz's amazing weblog on capital market). The tech companies get this. Cisco has been buying emerging technology companies in order to sustain its growth (among other things), but considering its size and the rate in which it needs to grow such acquisitions have less and less impact. . Oracle and PeopleSoft are market leaders in an ERP space which is now shaping up to be an oligopoly. They are trying to consolidate in order to sustain grown and to lock out new entrant.

Meanwhile, innovation has been happening underground away from the glare of media. Widescale adoption of those technologies may be years away. John Scully (ex CEO of Apple) made this observation in a News.com interview (Via Rajesh Jain):

We're going through a systemic, secular change in high technology. We saw, in the 1990s, the commoditization of hardware. Now, we're going to be seeing the commoditization of almost everything, including software and services. This makes a lot of sense because, as the technology world moves from being computer-intensive to communications-intensive, you have to have open standards, which means innovation is going to have to take place in different parts of the value chain. The things that we used to think of as the areas for "wow" technology, like computers, have become commoditized and even transparent, as they are embedded into systems. The innovation now is taking place with things that are largely being driven by market opportunities and customers.

I think where the amazement is going to be is in the ability to do things with information and content that was never possible before. There are huge opportunities for search technologies to deal with information, and they are increasing in orders of magnitude over the next decade. If you take something as simple as sensor devices, like RFIDs (radio frequency identification), and, if Wal-Mart put RFIDs on every item on their store, it would generate something like 7.5 million terabytes of new data every day. So as we move to real-time systems and sensors and robots, and all of these things that have been kind of like experiments over the last decade are turned into things that can be productized over the next 10 to 15 years, the world of real-time information, and how it becomes incorporated into more parts of their lives, is going to be where the amazement is going to take place.

If I may go out on a tangent here; widespread adoption of RFIDs (an existent technology) is at least 3-5 years away. Wal Mart is backing away from aggressive persusal of RFID and asking their suppliers only for adoption RFIDs at carton level (even that is a big deal) by 2005. Until prices come down from the current 30 cents / chip to something like a few cents it is not very viable for the retail sector. But the footprint of sensor based systems has the potential to be much, much bigger than RFIDs. A few weeks back stardusts / sensors made the cover of 'MIT Technology review', 'New Scientist' and 'BusinessWeek; simultaneously; which at the very least means that a lot of reasonably powerful, well connected people think that this technology is now ready to 'emerge' and hyped up.

This is kind of beside the point, But Fred Wilson also has a very interesting post about General Clark here . Incidentally, Cameron Barett (he is part of Clark's blogging team) says that the Clark is planning to start writing on his weblog soon.

Posted by Kaushik at October 06, 2003 09:27 AM | TrackBack
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