Tom Nolle
Tom Nolle is the president and founder of CIMI Corporation and the principal consultant/analyst. Tom started his career as a...
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Tom Nolle | November 26, 2013 |


Getting Our Mojo Back

Getting Our Mojo Back If we want to get networking back to when it was really innovative, we have to confront what "innovation" really means.

If we want to get networking back to when it was really innovative, we have to confront what "innovation" really means.

Cisco got bashed twice by Wall Street recently; once for anemic revenue and guidance on its quarterly call and once because the margins on its flagship cloud/IT platform, UCS, were "dilutive". The Street also had some advice for Juniper's new CEO--streamline operations so your bottom line will go up. Does this sound like an innovative industry to you?

Well, maybe we deserve it. Cisco announced what some users in my survey have characterized as "the only hardware-based strategy for software-defined networking" and my personal view is that if Cisco's "things" want to be "Interneted" then those things can pay their own way--opt me out! Juniper's R&D seems focused on reducing TCO, which isn't exactly what most of us call innovation.

From the dawn of IT to the early part of this century, the industry has benefitted from waves of innovation that brought new benefits to the table. Each time this happened, IT/network spending increased faster than GDP. Each cycle eventually peaks, and spending then grows slower than GDP until a new benefit wave comes along. In 2002 we lost those cyclical upward swings because we lost the notion of new benefits. Ask somebody what a "better" Internet is, and the net of their response is "faster for less". That's a formula for commoditization and profit decline, as Cisco has showed. If we don't like that kind of future for our industry, we have to kick-start those cycles again. How? Here are some ideas.

First, resurrect "medical imaging". Remember how this was going to justify ISDN and then ATM? No, I don't propose we go back to that tale, but here's a fact for you--the US spends about 18% of GDP on health care, which is the most in the world, and we're not the healthiest nation by far. Medical imaging, or online medical records, could surely help things a bit, but we can do better than that.

If you want M2M applications, how about medical telemetry? We already have an industry built on giving people with medical emergencies a button to push to summon aid. What if they can't push it? Doesn't it make more sense to provide proactive life sign monitoring? Sure there are concerns about security/privacy, but I think opening up traffic cameras and stop lights to hacking might create a few of those too, with less benefit to justify addressing the risks.

Then there's big data. Analytics are already used to predict risk, but by insurance companies more than health care companies. If we have telemetric data on basic medical parameters might we not spot conditions that were gradually developing, to support intervening when it was less expensive and more likely to create a favorable outcome?

Second, merge artificial intelligence and augmented reality. Not only does this give us an opportunity to play word-swap games ("augmented intelligence" sounds good, and we may already have "artificial reality" in politics); it opens whole new avenues in everything from entertainment to worker productivity.

Google Glass shows that we could easily create a virtual world that mixed real images with generated stuff, from animation to data. Couple this with information on body position, something current gaming technology can already read, and you can create avatars that can seem to move through the real world. Television could let people play along as characters in their own shows. Entertainment could send us to places we can't get to, some even imaginary, and yet our strongest sense--visual--would tell us we were really there.

The productivity benefits of this could also be enormous. Imagine somebody looking at a complicated switch panel in a power plant or even at an incision and seeing everything nicely identified. You don't pull the wrong breaker, cut the wrong sinew, or leave a tool behind--because the image of the "right" state can be superimposed on the real world for comparison.

My third suggestion is based on public policy, not on technical innovation. I think we need to provide an investment tax credit for network applications that are not ad-sponsored. The sum total of all global advertising revenue is less than the GDP of Florida. How much of the total VC investment do you suppose goes into things that are ad-sponsored? If we expect networking to be funded by a pool that by most measures is actually shrinking year over year, as ad revenues are, then we're going to be confronted by shrinking networks.

Public policy on taxing profits can be a powerful tool in stimulating investment in the direction that creates the most public good. Isn't restarting a cycle of benefit exploitation that's created all of computing and networking "good" enough to warrant attention? If we said that a given percent of return on a startup that generated revenue, particularly for network operators, was tax free, we could induce VCs to put money there by improving their net return.

If you look at company blogs and press releases, you're confronted with a collection of meaningless slogans and value propositions that boil down to "spend less every year on tech". Then we ask why Cisco or IBM don't make their quarterly numbers. If we want to get networking back to when it was really innovative, we have to confront what "innovation" really means.

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