Supernova 2006: because technology is everyone's business

Friday, June 23, 2006

Future of the Desktop

Over lunch, panelists talked about how the metaphors of the desktop will change as the things people do online change. Here’s some of what they said:

Tom Ngo, NextPage
Lili Cheng, Microsoft
Gary Bennitt, Goowy
Chris Thomas, Intel
Kevin Lynch, Adobe

Q: What is the one thing that needs to change about the operating system or desktop metaphor.

NextPage: We come at the topic from the perspective of a company selling enterprise software. As you reel out control to end users, you see an explosion of productivity. In the enterprise, the infrastructure is not set up for the distributed world we live in.

Microsoft: Working on social computing – sharing and synching information – you discover new things that make the experience come alive. The OS needs to support sharing and synching, so you can do a better job of managing your life.

Goowy: With data being available everywhere, you’ll see an evolution in the way devices access the same data in different places.

Intel: The next generation of solutions are going to be assembled from multiple components, devices and vendors. The OS platform needs to know what the interface is, what type of connection you have, where you are.

Adobe: It will be critical to make the new applications work in ways that are similar to the existing, familiar applications.

Q: Are we getting more decentralized, or will data aggregate?

NextPage: More things are happening locally, with the end user. End users need control of their data.

Adobe: The trend swings back and forth between centralization and decentralization.

Intel: With the advent of a service-oriented architecture, there is a fundamental change.

Microsoft: Do users what to aggregate all of their information? For privacy reasons, they may want to segment, based on the level of integration they want among work, home and hobbies.

Q: Do we limit ourselves by the words we use – user, application, data?

Adobe: When we work on content, applications and communications with customers, they come together in ways we don’t know how to talk about. Web 2.0, mashups, tagging, wikis, microformats are new words to describe the innovations that are happening. We apply tech to solve problems. Those are applications.

Intel: Language can be so abstract as to be meaningless, e.g., solution.

Q: What is the role of the desktop when data is centralized? And what happens to privacy?

Intel: There are things we’re doing on the desktop to help separate data, shield data, and still work in the environment.

Goowy: If you can be assured that your data would be secure and private, you could store it in a central place like goowy.
Microsoft: You want to store your email on servers, for example, so you don’t have to manage it all yourself on your desktop.

NextPage: I physically partition data on my PC to keep confidential information separate and secure.

Q: How do you archive decentralized data, and how much of it needs to be archived?

Intel: You do want to figure out how to archive, and what the legal implications are with the archive service provider.

Microsoft: What you archive depends on what you will you care about in the future (e.g., irreplaceable data, like family photos).

Q: What happens to privacy rights as data moves between platforms, domains, devices, carriers?

Goowy: Data that is private can’t be shared without your permission. If you post a photo and someone else mixes it and redistributes it, you gave up your right to privacy when you shared it.

Intel: You can attach terms of use to data when you share it. For example, layer in copyright and distribution instructions in tag.

Microsoft: We may need new tools to protect privacy rights, as we see the way people use the shared data.

Adobe: It’s freedom vs. security. If you want the freedom to share, you give up some security.

Q: Are we creating new kinds of data banks? Places we feel comfortable storing and moving it around.

Adobe: Banks are too closed of a metaphor for the dynamic of sharing data. This is building walls, windows, doors, keys, locks, who can come in, etc.

NextPage: You can’t copy money. With information, your employer can read your email and anything on your laptop. You can copy data and send out multiple copies.

Q: Is there a conflict of goals between sharing information via the social networking services vs. being anonymous online. If the desktop is your home, and it can be invaded by social software, how can you protect your identity?

Microsoft: Identify will be key in decentralization. People don’t want just one identity for all their interactions. If you centralize, and log in with one identity, you have to put your trust in that one service. In the decentralized world, we have to build trust.

Goowy: If you want your data to stay private, you can trust one institution to store and protect it (like a bank).

Intel: We have to create clear boundaries with the services we subscribe to . There are laws in the physical world for the protection of our rights.

Who Owns You?

We ask: What information do you get about people, and whose information is it? Here’s what these panelists say (text is not verbatim):

Seth Goldstein, Root Markets
Kyle Birkman,
John McCrea, Plaxo

Root Markets: We enable buyers and sellers in the mortgage space to exchange consumer data. We provide price discovery for lead generation. Brokers who traffic in this data see wide margins because they maintain a black box between buyers and sellers. We provide more transparency. Attention Trust is a non-profit organization for consumers to advocate for ownership of their own metadata. They have property right to a copy of it, it should be mobile between services, you should be able to participate in an economy with your data, and you shouuld have transparency to see how it’s being used. Sometimes what you don’t pay attention to is as important as what you do pay attention to. We enable people to capture their click stream data.

MySpace: It’s a user generated content site, mostly for teenagers, where they exchange photos, post comments, send messages and other data. It’s not an ecommerce site. But it gets very personal about people. We view the data as belonging to the user. The technology that supports that data, the social network that links your profile to others, creates value for the user. A user can cancel and delete their account. And we can cancel and delete accounts, if they violate our terms. We have to provide a safe and welcoming environment without a heavy hand.

Plaxo: Plaxo is a smart address book service that enables people to have richly populated address book with the assurance that that address book will be available anywhere and will never be lost or stolen. The same address book can be used in Microsoft Outlook at work, at home on your Mac or PC, through a secure web site, or through your mobile phone. We store your contact info, and the info about your contacts. With info about 10 million users, we need a high bar on privacy policy. We are the custodian of their personal information. The information belongs to the user. We store it and enable you to share it.

Q: Plaxo has drawn fire for emailing everyone in your book for an update and asking them to join Plaxo.

Plaxo: The controversial feature of the update contacts request email, that was not a well executed strategy. We’ve taken steps to publicly apologize, as well as change the feature set so we don’t send out emails to update someone else’s address book.

Root Markets: The enterprise value created by Plaxo is carried by the people who do the updating. There will be a big challenge to rebuild trust. All of these services own bits and pieces of people, but people may choose one service to promote themselves. Their trust will go to the provider who provides the most value.

MySpace: If we ask people to create a discreet address book at every service, that is a waste of their time. We should let them use contact lists created elsewhere.

Q: If you want to join another social networking site, the interfaces are closed and don’t work together, so you can’t bring your identity with you.

MySpace: If you have a large network that you spent a long time creating, you don’t want to give that value away to your competitors. Some users join the service because it’s portable. But that’s not the standard value proposition.

Q: Is it realistic to think people will voluntarily give up information that will be used to market to them?

Root Market: People with bad credit and need cash will give up a lot of information about themselves. What drives lead generation is sub-prime credit. A California refinance candidate with fair to good credit and wants to refinance is worth $150, and that customer gets sold four times. They’re contacted by four qualified lenders. As people express more data, the lead generation space will figure out how to monetize that by selling their data to advertisers.

Q: The lead generation market sounds kind of scary. Will MySpace users with X fields filled out in their profile be worth a certain amount of money?

Root Market: The data is there, the question is whether we’ll surface those prices— how much would they sell it for? Once you go online and start to search and click, you become worth more to certain types of advertisers. We’re finding out what the price is.

Q: Does identity and reputation management become a function of the service?

MySpace: We’re not planning to become a database of buying intentions.

Plaxo: We take a narrow view of what we want to do. We don’t’ do advertising. We plan to add services on top of the address book.

Q: There’s explicit information you contribute, implicit information you contribute (e.g., your click stream tail), then there’s a third category of data that’s about you, but it doesn’t come from you. What are the boundaries around that third category?

Root Market: If whose blog you’re reading is being tracked by others who want to read the blogs you read, then your online reputation is affected by that. Where your attention is on the internet is of interest to others.

MySpace: Knowing who views your profile is a privacy issue on both sides. In a physical community, there are lots of things we don’t know about people.

Plaxo: Whether it’s MySpace or FaceBook, it’s how people react to the service and how comfortable they are sharing information. It’s shocking to see how much people reveal sometimes.

Q: One model in Germany is to put in your business information, open your network, and see who looked at your profile based on what keyword they typed in. It opens a world of transparency. But it’s the opposite of the anonymous Internet presence.

Plaxo: Like LinkedIn, it’s an experiment in social networking. It’s interesting to see how it is adopted in other cultures.

Q: In the RFID tech area, privacy concerns arise because people don’t understand what data is being tracked. How do we participate in the public forum about privacy?

Plaxo: With consumer facing Web services, most users don’t read the terms of agreement. We continue to struggle to get better transparency screen by screen on our services.

MySpace: You try not to surprise people with things they wouldn’t expect to get from the info they provided.

Root Market: What Attention Trust did with click stream was empower people to see their data and understand where it goes.

Q: There are two clashing currents: Teenagers are desperate to put all their personal information online vs. privacy concerns of parents about information like addresses and phone numbers making them vulnerable.

MySpace: We need to do a better job of educating people about what is reasonable behavior online.

The Next Five Billion Users

What happens when connectivity ramps up in the developing world? Here’s what these panelists had to say:

Dan Shine, AMD
Rajesh Jain, Netcore
Lyn Jeffery, Institute for the Future

AMD: 50x15.com is a rolling odometer for internet adoption. We’re not going to reach 50% of the world until 2030. That’s not acceptable. There is no one solution. AMD is partnering with others to bring technology to the people who need it.

Netcore: In Bombay India, there are 40 million internet users. The government target is to get 10 million broadband users by 2008. The monthly spend is about $5/month for 256K connectivity. Looking ahead to what is required in India, broadband isn’t being deployed fast enough by the government owned telcos. Most of the investment is going into mobile. To get to the mass market, the mobile phones can be deployed with GPRS. Also, if we can network computers with thin clients in education and mid-sized businesses, they can make a small payment for connectivity. Netcore is working on building out a mobile internet. We need to have a $100 price point for the device and a $5 to $10 price point for services. We need to make the access device as simple and manageable as possible.

IFTF: Studying the Chinese internet from a cultural point of view, we can think of the Chinese internet as an alternate Internet (from the English language/American Internet). The state owned media are much slower at info gathering and content delivery. There is more emphasis on mobile devices than PCs. Youth usage is different, while they’re preoccupied studying to get into college. In China there are more than 100 million internet users, with 64 million on broadband. You see the Chinese internet showing up on Technorati, with a Chinese blog ranking No. 1. Sina.com is the biggest portal. Baidu is the leading search engine. One service lets users create play lists and search for MP3 files, a main driver of use. People can become popular on the Internet quite quickly, like the Backdorm Boys video.

Q: Are we seeing the emergence of a global internet culture, or will the internet replicate cultural differences?

IFTF: A lot of the ads and content only make sense if you are Chinese. The genre may be a global phenomenon, but the content is cultural.

AMD: You see the adoption of the best of what’s global. Some of the most impactful content is generated locally. In S. Africa, they’re delivering online education using local artists to play the roles in Shakespeare, for example. It helps bridge the gap, when they put the content in the context of the people who are consuming it.

Netcore: Advertising on the internet is very small. But searching for jobs is the largest, most profitable Indian portal. In the mobile segment, phone customization, wall paper and ring tones are popular. Part of the Internet use is global, in that they use Google. But there are parts that are India focused.

AMD: While tech develops and costs lower, the definition of access varies. Do you consume content in the way it was intended to be consumed? If you access the internet through your mobile phone, you don’t get the rich content tableau that creates the immersive experience.

IFTF: China has released it’s own set of domain names, which for practical purposes creates a separate internet, rendering those domains in Chinese characters. That has huge implications for how we do business and sell products there. If the Chinese internet indexes different data and shaping a differing world view, that has implications for geopolitics and understanding.

Q: FCC policies were developed with a view to the rest of the world, thinking if the US were ahead, it would push other countries to adopt. What does it take to catalyze a bottom up force?

AMD: We’ve learned that you have to create a sustainable ecosystem, working with people locally on the hardware, logistics, and people who can service the solutions. When you complete a deployment, there has to be a long term plan for local sustainability. Microfinance is one aspect, enabling people to acquire equipment at lower costs or pay as you go.

Netcore: To catalyze growth in India, alternate communication tech like wireless broadband could make a huge difference. Also, providing technology to improve education and literacy.

IFTF: When China moves to mobile connectivity, that will open the internet to the mobile phone users who are a largely different group now.

Q: How is high-speed broadband deployed in China?

IFTF: There is an unusually high number of broadband users, partly because its affordable. Many users get primary access at internet cafes. But the trend is shifting toward internet in the home.

AMD: The persistency of the connection is variable. As connections slow to 8K, they can’t be downloading video or using VoIP.

Netcore: In India, we call it always on narrow band.

Q: How can the outside world have an impact?

AMD: One way is through financing, making microfinancing available. Also, addressing tariff issues that make the devices unaffordable.

Netcore: Two barriers that need to be addressed in India are in telcom industry and in the mobile space.

Q: What makes these places markets of opportunity, and what are the barriers?

IFTF: Recognizing that the internet in china is different, and that will affect marketing. Translation is a huge issue. We need humans in addition to machine translation.

Netcore: Countries like India and China offer huge untapped markets that can be profitable at very low price points. They offer voice at 1 cent a minute. Network management is outsourced. Look at the markets as being in early stages of growth. Spend a few weeks there to understand the opportunities, local business models, and how local culture influences those models.

Cutting the Cords: The Wireless Explosion

Moderator Om Malik, Business 2.0 explores the future of wireless and wireless broadband with these panelists:

Clint McClellan, Qualcomm
Selina Lo, Ruckus Wireless
Pierre De Vries, USC Annenberg Center
Juergen Urbanski, Fon

Here are the highlights of this sometimes lively debate:

Q: Where do you see the wireless ecosystem evolving in the next five years?

Ruckus: We believe in wifi, which has surpassed Ethernet as the most popular LAN networking tech for the home. The problem with wifi is, it can’t reach far, there are coverage problems and unpredictable performance. We have a wide installed base of carriers who distribute IPTV from the home gateway and the set top box. They want to watch TV anywhere. Today, houses are not wired for the TV where ever you want it. Getting TV on screens and mobile devices, watching DVT recordings on the train is on the horizon.

Q: With high def TV and large files, what is the minim bandwidth in the home?

USC: There is a transition to digital TV in the US, which will free up spectrum for in home, between home and metro area. Above 700 mega hertz will be auctioned off. Below that, there will be TV stations. In each city there are effectively 15-30 vacant channels. The FCC says you can operate broadband wireless in these channels without interfering with TV. The most efficient way to allocate these would be to have them unlicensed. There will be different business models for the licensed and unlicensed channels. You’ll get wifi plus, and wireless ISPs will be able to create networks more easily. The mesh application will enable neighborhood meshes to get inside homes.

Q: Why should we pay attention to Fon, and what are you doing in this ecosystem?

Fon: Anywhere in a city, there are up to 25 hotspots in range. If you see the list, they’re mostly secure/private, or they’re commercial and you pay for access. The price points are geared toward business customers. Coverage is universal in metro areas, but basic access is not. If we all trusted each other, you could invite people in the vicinity of your home to use your bandwidth, which isn’t at capacity. We provide a Linux based authentication system that lets people roam for free among their peer networks, or at an affordable fee. We change the economics. We don’t require special equipment. People download the software on their router or buy one from us. It let’s us share the excess bandwidth, bringing it into reach of the consumer.

Q: If you read your terms of service with your carrier, you’re not allowed to resell bandwidth. Whey should they run the risk of using Fon?

Fon: The large ISPs have terms that say you can’t share bandwidth. We’re talking with the large ISPs in the US. There is a value prop for them, because they’ll get a share of the revenue that we take. If you look at the economics, you access the internet several days a month, it’s cheaper to become a broadband subscriber than to pay for access at the commercial access points. Muni wifi and Fon are complementary. Mini wifis are highly political processes with RFPs and long lead before deployment. Fon is grassroots, already here. The overlapping and conflicting objectives of cities can’t be met by one provider. Muni wifi is from the street in. Fon is from the home out.

Q: Do you see a battle with open wireless?

Qualcomm: There’s a place for all of the technologies. There is value in buying spectrum, because you can get greater coverage. Unlicensed spectrum that’s free is highly competitive. Anyone can get in there and start a business. Mobile phone subscribers are paying for future build out of the 3g network. Between 3g tech and wifi, it’s hard to see where anything else fits. If you have embedded 3g and wifi, what are the other choices? As the functionality and capabilities increase, and mobile phones become 3g enabled, you can use your phone as your internet connection.

Q: If you have carriers that restrict use of their networks to subscribers, is that enough incentive for free spectrum carriers to emerge?

Qualcomm: If one company gets into it, others will follow. The incumbents have coverage as a primary asset. Today, wherever you go, there is good coverage. You can change a business model to chase rate plans and user plans, but not to build out coverage where it doesn’t yet exist.

Q: If you have Comcast at home, then another carrier on the road, it’s frustrating for the user.

Ruckus: If you can have a wireless skype phone, and there is wireless access at all of the hotspots, you can get cheap long distance. With licensed spectrum and prices coming down, bundled services still won’t satisfy customers. Long distance is expensive.

Qualcomm: You may save money on calls, but you want to make a call where ever you are. And you’ll want to have data where ever you go. You don’t want to look for hotspots.

USC: The distinction is edge in or center out. Unlicensed networks let you innovate to deploy. Quite a few of the Connected Innovators were making widgets you can get help navigate the different networks.

Ruckus: Whether you have free, bundled or by the minute service, users shouldn’t have to worry about switching carriers.

Fon: The future we see is where wifi access is ubiquitous and accessible. The medium term future, we’ll have a variety of network connected devices shifting between carriers. The question is what applications you can layer on to create new value.

Q: One group not represented on the panel is the end user. There is user pain to adopt the tech – connecting to, using and switching between networks. Who will think about the end user?

Ruckus: Users get frustrated about reliability. You get used to having mobile phone conversations cut off, but if you’re watching a World Cup game, you wouldn’t tolerate losing service. Wifi is great for data and voice, things that aren’t mission critical. It has a way to go before it robust enough to support mission critical services.

USC: The internet is driven by protocols. One way to solve the problem is Real Simple Networking protocol that offers a choice. The networks that could make this available would need to work together. There’s an opportunity for revenue sharing. But the carriers don’t want to be a dumb pipe. They want to offer services. If a device offers a quality of service that users value, users would pay for RSN.

Q: Users want to be able to roam without paying 60 cents minute. How do you get a happy customer who is happy to pay?

Qualcomm: The carrier business model is to charge roaming charges. We try to add applications that give you extra services, such as song downloads or TV downloads.

USC: Competition within a given regulatory regime and between those regimes will create an ecosystem where we can test different assumptions. Diversity will solve the problem, but it will take time.

Q: What Web 2.0 applications will drive users to use the wireless connectivity?

Ruckus: One of our customers is a carrier that offers services that distinguishes them from pipe providers. They offer IPTV over DSL network. Now, they’re moving on to allowing people to watch IPTV from a hotspot using a laptop or handheld devices, and offering services that lets subscribers place wifi cams in areas of the home they want to monitor. These require reliable wifi access. They provide the devices that enable these services, and they’re monetizing the services.

Fon: From VoIP to IPTV, to more community based approaches where you can tell if your buddies are in your proximity, to gaming where they can become mobile.

USC: If you step back and look at the phases of communication: from the cloud to the user, then user to user, to devices communicating with each other. That will be come a source of applications.

Qualcomm: Your phone knows where you are and who you are. Soon it will have wifi and Bluetooth. We can then build push services, like alerts about events or presence or coupons.

Spotlight Talk: Bradley Horowitz, Yahoo!

Some thoughts on innovation from Bradley Horowitz, head of the Technology Development Group of & Marketplace (text is not verbatim):

Yahoo! Search vision is FUSE: Find, Use, Share and Expand. It’s different from the competition, because people are part of our vision. It’s better search through people.

There’s a natural order breakdown of the online community. You have active creators, the small percentage that will start a Yahoo! Group. There are people who will proactively participate in that group. Then there is the 90% of people who will always lurk.

When you think about community based products, this pyramid preserves the integrity of content through natural gate keeping. The people who have the privilege of making Hollywood movies have reputation, budget, etc. that enables them to do what they do.

At Yahoo we’re breaking down the barriers between people who create, people who remix, and people who download.

If you look at what’s available on Flickr, you can see a list of the most interesting photos on the site. You can create an algorithm that finds the most popular images and looks at the relationships between he people who made them popular, and the result is a truly outstanding selection of images with emotional resonance.

Yahoo search has evolved from human editorial through mass automation to topological analysis (thanks to Google). But there are other authorities of trust to consider. Social search uses the past advances, refactoring in human participation. We invite the world to participate in My Web, Yahoo Answers and other services.

At Yahoo research, we’re the “roadies”: We build the stage, work the soundboard, etc. One project is “Hack Yahoo!” We have to hack the protocols and procedures to release pent-up creativity. We have a speaker series, weekly hack lunches, and hack day – mash up or shut up.

We take the spirit of hack and, through the Yahoo Developer Network, we expose what we’ve created in the last decade. We know we don’t have all the good ideas and innovation. We want people to create viable businesses on our platform. It’s creating an ecosystem.

Innovation takes the courage to be wrong and make mistakes.

Perspective: Werner Vogels, Amazon

Werner Vogels, , shows us the Amazon enterprise. Here are the highlights:

Look at the NBA Store. This is running on the Amazon.com platform. When you go through checkout, you can use your Amazon ID. Not every story that runs on the Amazon uses the Amazon ID. There is a lot of mishing and mashing going on.

If you need to build a new application, you want to drive traffic there, you need to make sure it always stays up, and it needs to survive a complete data center outage without any impact to the customer.

Whether you’re building Web 2.0 or traditional website, you first need to build a robust infrastructure. No piece of the infrastructure is unbreakable. You need to be able to deal with it when it cracks.

The Amazon business model starts with selection. If it’s good for the customer, you can get traffic, lower your cost structure, lower your prices, have more sellers, get more customers.

In 1995 Amazon had 1 million books in store. That was the selection part. Now, there are other merchants who sell on the Amazon platform. In fairness, if their prices are lower than Amazon’s, they get preferred space on the page. Discovery of their products is also improved because of Amazon’s long tail.

Amazon’s continuous growth is fueled by ultra-scalable technology. Every year, we scale the technology. Internally, it is now a service-oriented architecture. That is the platform we built our applications on.

What does scalability really mean? It means that if you add resources to the system, performance needs to increase proportionately. It also means being able to handle larger data sets. If you have to add nodes to the system, the performance of the system should not suffer.

If new nodes are faster and bigger, you should be able to exploit that. The more nodes you add, the less people you should need to maintain them.

Amazon went through stages where all of these things were not true.

Target was the first customer of the enterprise services. Our interaction with Target made us realize Amazon could be a platform, not just an application. Now we have content generation and discovery; identity management; order processing, payments and fraud protection; fulfillment and customer service; and product offers and management.

Amazon enterprise is always on, scalable, cost-effective.

The traditional Amazon web services were built using Amazon data. Other applications have been built on top, e.g., backup manager, that use data belonging to others.

Perspective: John Garstka, USDoD

John Garstka, Office of Force Transformation, U.S. Dept. of Defense, offers A Perspective in Innovation in Networked Organizations. (Text is not verbatim.)

I contributed to Network Centric Warfare, a book that attempted to find out if networking mattered in the military. We looked at the trade-offs between investing in applications or infrastructure. We asked, why should we spend money on networking?

When you’re networked, you can do things in the info domain much better and faster. That impacts how you organize, train and deploy your forces. Generals talk about advantages in the physical domain – position and force advantage. The information advantage is less well understood.

We’re finding you have to factor in cognitive and social domains when you interpret information. At the service academies, for example, they’re learning the languages of the places where they’ll operate.

To make sense of complex relationships, we developed a value chain. It starts with the relationship between networking and information sharing. As you move across the value chain, you hit a chasm between those who understand the tech and those who don’t. When innovation happens at the intersection of these two domains, there’s a problem.

We try to understand what really matters. Military operations are a team event, doing things collectively. Shared situational awareness can be enabled by blue force tracking, which reveals where forces are deployed. It was enabled by networking apps on tanks, helicopters and commercial satcom. That affected the speed and tempo of combat.

If you’re in maneuvers, you want to look at what everyone can see at the same time. It’s not about deploying tech, but changing how an organization collaborates and assigns info and decision rights. The discussion is about how the networked organization behaves.

We don’t have good simulations to answer these questions. To figure out where the value proposition is, we put people on the network and watched. In general, we learned:

People use the tech because they want to do something. If you don’t have the right incentives in place for collaboration, it doesn’t happen.

There is tight coupling between the tech and the process. Often, the tech enables new processes. You need to understand the relationship between the processes, and how people interact during the process.

Sometimes tech leads the way. But you need a process innovation to reap the award of the tech. If the innovation is disruptive, there’s an impediment to adoption. In really big organizations, there’s a tension between top down and bottom up innovation.

At the top of the ecosystem, there are bureaucratic disputes. At the bottom, people just want to survive. When you talk about investing billions of dollars in infrastructure, you have to think through the adoption curve. You can have the network, but people may not be motivated to collaborate on it.

None of these technologies are independent. People who own the tech innovation have to figure out how to work together, so their tech can interoperate.

Given a fixed budget, the challenge is to figure out what technology will impact your core competency. Whether you’re in commerce, defense or government, you may not get as much tech as you need. Figure out whose job it is to synchronize tech evolution.

Rise of the Videonet

Starting with a Mentos and Diet Coke videos by eepybird.com, moderator JD Lasica of Ourmedia talks about the future of consumer generated video content on the Web with panelists:

Jeremy Allaire, Brightcove
Jonathan Taplin, USC Annenberg Center
Mary Hodder, Dabble
Robert Levitan, Pando

Here are a few highlights of the conversation:

Q: What does the current IPTV universe look like?

Brightcove: The UGC sites aren’t generating meaningful revenue yet. Media are experimenting with video ads. Any organization that wants to communicate on the web will have to have some sort of video presence. Traditional media are launching TV networks on the web.

Q: How big a role will Hollywood play in the IPTV landscape?

USC: As founder of the first video on demand service in 1996, we had subscribers paying for content until the producers stopped licensing content to us and launched their own site. In the long term, people will want to watch the Hollywood movies. Until we get video stores online, Hollywood will play a blocking role. With Steve Jobs getting closer to Disney management, we’re getting closer to advertiser supported content.

Q: How are companies differentiating themselves in the online video space?

Dabble: There are sites where users can upload content and sites that are only for downloading. Users have flocked to YouTube, where 35,000 videos a day are uploaded. YouTube has 42 percent of traffic. MySpace is second with 24 percent. The activity that happens bottom up is different than top down. Top down production has a budget, unions and top-down controls. When users make something, they just shoot. There’s a lot of garbage, but non-professionals also make some incredible stuff. A number of hosts offer a free site for uploading, then generate revenue on the backend by hosting commercial video sites like the National Hockey League video site.

Q: With high def video starting to hit, will we be talking about P2P next year?

Pando: The Internet can’t be the distribution platform for the very large files like TV shows and Hollywood movies. On the other side is the UGC. Not everyone wants to publicly share all their videos. P2P, from desktop to desktop, will be all about the bandwidth.

Q: Social norms around rich media are shifting. What are the implications for copyright holders?

Dabble: If you look through the videos that have been made around mentos and coke, there were an number made before the ones that got the publicity. One producer put videos on Revver, which does a revenue split. If a referring site sends traffic, they share revenue with that affiliate. The video got them a chunk of revenue. But then the video file was spread around to other sites. The producer loves that others are watching it, but they’re not making any money.

Q: In the question of Hollywood or UGC, where will the most activity be? Will anyone care about UGC in 10 years?

USC: Hollywood will start to use mashups in interesting ways, and let people post them for free. They shouldn’t fight them. In two years, will anyone care about mentos and coke? I don’t think so.

Brightcove: Copyright holders want to empower consumers to use that content, but drive revenue through that use. The challenge distributors have is, they’re held hostage by the upstream groups – screen actors guild, directors guild, etc. They don’t want the art destroyed. The legal and business conundrum needs to be solved so creators, talent and consumers and all generate revenue. Creative pirating will continue until then.

Dabble: Friends watch video productions by their friends. They’re not concerned about production values. The askaninja video about net neutrality has been viewed by about 5 million people. But you need to separate the good stuff from the bad with better filters.

Q: Will we see remix phase out or take off?

Dabble: Most of remix culture now is parody. The issue is control. People want to be compensated for their contributions. The harder issue is attribution. Do you let someone chop up something and remake it, and thereby assume ownership of it? The younger generation has a different media literacy than the older generation. They may be OK with loss of control and care more about attribution. Other types of videos we see are genre, indie film makers and documentaries, interviewers and anime music videos. Each genre is strong, but they don’t get play at the top down media. It’s highly watched.

As production costs come down, every web site will become a video producer and distributor and allow consumer participation in that by having them contribute training films, etc. The creative marketers are asking people to take their brands and do something with it to generation excitement.

Perspective: Michael Copps, FCC

Public policy will affect the future of this industry. Issues like net neutrality create a growing recognition that we need to engage in the public policy discussion.

Commissioner Michael Copps of the FCC cuts right to the chase: All is not well in Washington in terms of dealing with these new products and services. We need to do something about that.

This period of disruptive change in tech, business plans and policy will shape the future of broadband, internet and the media. We need to take a holistic approach.

Public policy priorities: broadband, which is fundamental to what the FCC does. His mission is to bring the best, most cost-effective communication system to all the people in the country. He says: Access to communications is an all American civil right.

Broadband is the great network and infrastructure challenge of our time. They are the roads, railways and canals of this age. We need to build out broadband connectivity. Right now, the US is 15th in the world in broadband penetration.

The FCC calls 200 kilobits broadband. That’s the ‘90s. We have a national broadband goal of universal access by 2007. With six months to go to the end of the year, we’re not going to meet that goal.

We could have a wider digital gap between haves and have nots – urban / rural America – in advance telecommunications. We have not national strategy to avoid that.

Starting with basics: The FCC has to collect data and get facts about our current situation. Today we assume that if there is a single subscriber to broadband in one zip code, then it is available throughout that zip code.

We need to compare the cost per bit in the US to that in other countries, and study what other countries are doing. Countries with lower population densities have better coverage than the US. How did they do it?

Based on what we learn from this research, we need to tee up options for Congress to look at—lay out the options in an analytical way.

We need more bandwidth, and more competition in the bandwidth supply.

Net Neutrality: As we migrate to broadband, decentralized end user control is increasingly at risk. There are fewer broadband providers, controlling the pipeline – about 98 percent of the broadband market. Too many consumers lack a choice.

If the market is truly competitive, the government can get out of the way and let the service flourish. Being asked to pay a premium to use more bandwidth creates the specter of broadband providers controlling where you go and what you do on the internet.

Some providers may try this. That could end in bad pubic policy.

The new classification as a Title 1 Information Service takes away the protection of broadband from being regulated. The commission has come up with a statement of basic rights, which plant the seeds for a dialog about net neutrality.

Providers of broadband look for new business models, even suggesting that sites that generate traffic pay a toll to get that traffic. If first class access is available only to those who pay, that relegates everyone else to steerage.

We need to do everything we can to ensure the internet remains open and democratic. If distributors control content and conduit, they can keep others out.

In the media world, there is an alarming increase in media consolidation, resulting in fewer outlets and properties. They own production and distribution, cornering the market on creativity. The FCC has begun again to decide what the future of media will look like, shaping ownership of TV, radios and cable.

Safeguards that foster media diversity are being removed. Is it good to give one corporation sweeping power in a local market? The court took the FCC to takes for giving that power in the past. This time, the process will be more open, and invite public comment.

This relates to the internet freedom issue. Net neutrality is one high voltage rail in the consolidation debate. The more concentration ownership, the tighter the distribution, the more the Internet is at risk.

If you care about diversity in your news and information, creativity in our entertainment, open dialog for more intelligent decisions – we can’t let a few giants subvert the system.

As the FCC grapples with these issues, the commission needs more input from small and medium sized enterprises, as well as the large high tech firms. Decisions without you are most often decisions against you.

It will take serious effort and commitment. The opposition is robustly financed. By doing some political work, you can make sure it’s not a business as usual process. Take your story all across America. Tell people what is at stake. Enlist allies. You can have an impact on the debate.

Q: Net neutrality passed the house and is on it’s way to the Senate. What’s going to happen?
A: I don’t make predictions. The challenge is to make sure the serious propositions move forward. Senate markup of the legislation is underway.

Q: There is little research and analysis going on right now. How do we raise the level of research?
A: Others define the debate politically, analysts define it commercially. We need to demonstrate to decision makers what the success stories are. What’s going on around the country. We need to change the terms of the debate.

Q: What kind of partnerships and alliances can be formed?
A: People want to go the same direction but have a different bottom line. Figure out a common message for now. That will enable you to have critical mass around the country. You have to put differences aside momentarily.

Q: What can the government do to open more wireless spectrum for broadband access?
A: We working on that, setting rules of the road for using it. 

Thursday, June 22, 2006

More Than Just a Game

Where will we take technology originally developed for games? This panel looks at how to apply gaming technology, skills and behaviors in the business environment.

Moderator: Dan Hunter, The Wharton School
Amy Jo Kim, Shufflebrain
Doug Failor, Joint Futures Lab, DOD
Michael Zyda, USC Gamepipe Lab
Philip Rosedale, Linden Lab
Charles Moore, Reuters

JFL: As a contractor for the defense department, I play video games for a living. At the Joint Forces Command, the mission is military transformation. The right equipment and training are critical. JFL explores and validates theories. One of the tools we use is computer simulations, which enable you to test decisions ahead of time and predict the results. Because games are sophisticated simulations, we can learn about cause and effect, long term vs. short term goals, patterns in chaos, complex system behaviors, counter intuitive results, motivation by obstacles, persistence and experimentation to solve a problem.

Reuters: Reuters core business is news, then using that news to support financial professionals in delivering training. We set up an innovation program like a venture fund, where we choose 6-8 spaces to look for ideas for subsequence investment. In Learning from the Virtual World (games), we immersed ourselves in the gaming space to take back proposals for investment to the venture board. They’re interested in the user interface, and how we can apply it to our interface. For training, we can learn how users learn from within games.

Shufflebrain: We’re a design consultancy doing design and strategy for games. By going into game mechanics and what makes them compelling, we can create better, more addictive games. Games shape behavior by leveraging primary response patterns. Giving positive or negative feedback on a schedule provokes a particular response. Slot machines use semi random payoffs with large or small payoffs, creating addictive behaviors. The power of reinforcement and feedback makes games work. By engaging us in flow, increasing the challenge as your skills increase, games keep people playing. The underlying mechanics can be applied to other software. These are the drivers of behavior including: collecting things, earning points, feedback, exchanges or interaction, customization. For example, character customization or personas.

USC Game Lab: When you consider how much time people spend in negotiations, there’s value in training them to be better negotiators using games and emotional response sensors.

Linden Lab: We talk about Second Life as being like the Internet, only three dimensional. The difference is, you experience it with other people. Second Life takes the context and puts people in it at the same time, so they can build on each others knowledge. It’s an amplifier that enables you to interact with people while they’re in your site.

Q: Have you noticed a generational change where games play a more significant role?

Reuters: We see that to a great extent. The game generation has already started to penetrate the workforce. We see the parallels in gaming that apply to the business world. But there is a significant majority in the business world who aren’t’ involved in the gaming space. The younger generation may see applications, but the senior managers don’t get it.

USC Game Lab: The line where game playing stops is around 35 years of age. We’re developing a game development program at USC. Kids are fascinated with games. By analogy, you can drive any car, if you now how to drive. Games are like that, if you’re in the game playing generation. Older players don’t have the metaphors to work with.

Q: What lessons do we learn from games about user interface design?

Shufflebrain: If you look at the example of eBay, you make it more game like by creating anticipation and randomness and putting in a reputation system. Then there’s the notion of emergent exchanges or back and forth exchanges. When an auction closes, people trade reviews. On MySpace, they make guestbook comments in exchange for being added to a list. You can allow room for emergent behaviors, rather then making the interface too restrictive.

Q: How does the social environment evolve?

Second Life: You can see the landscape, where you site fits into the environment. The cities emerge around people with shared interests. It’s a hyper accelerated demonstration of web 2.0 behavior, building businesses together, collaborating, all within context of the virtual society. Putting up a forum on eBay amplified the excitement. You can have a bad clothing store in Second Life, but the social support drives excitement.

Q: do people choose these environments instead of the real world?

USC: the line will be between people who do and don’t understand games. People who are fascinated with massively multiplayer games might do it. But will be a while before a majority can.

Q: What are the social ramifications of an online fantasy world that takes over their reality?

Shufflebrain: as a parent, we put limits on the amount of gaming. When my seven year old plays too many games, the rest of life becomes boring. He gets personalized feedback in the game. Any media can be indulged in too much. Common sense, involved parenting is needed. Social games teach valuable lessons that translate into the real world. Every powerful tech is a double edged sword. They need to be understood well and used in an informed way.

Second Life: you have to compare the learning per unit time. Second Life is a rich environment for facing real constraints as you develop a business. In terms of safety, they’re safe when they’re not alone. When there are a lot of people around, there’s safety in numbers.

Q: wireless gaming industry in Asia?

USC: looking for cool tech in Japan, you find people are into gadgets. Wireless does well there. In the US, mobile games are just now gaining traction. The problem with mobile games is that the phones have different interfaces and keys. What works on a Motorola won’t work on a nokia. When there is more standardization, we’ll see the push from what is happening in Asia.

Q: why are games so compelling, when people are so time challenges they can’t manager their first life, much less a second life?

USC: world of war craft, the average user plays an enormous number of hours. When kids buy world of war craft and start playing, we see it in their grades. It’s highly addictive.

Dan: You create social connections and spend time chatting in the guild room. You start to lose your assumptions about the necessity for physical interaction in order to have meaningful social interaction.

Second Life: You will need to get a Second Life account because, as it relates to innovation, economy, prototyping, things are happening faster there than they do in the physical world. People are funding companies, growing, learning and doing things together much faster there.

Q: How would these services take advantage of expanded bandwidth and faster processing power.

USC: you always need more. You add emotion sensing. You draw different graphics and sound. We’ll use all the processing cycles available.

Second Life: computer games don’t look like movies now, but in five years, they’ll look more like movies. Now you can’t simulate all the objects in a room. You need to simulate more objects to be fully believable. We’ll reach better parity with reality given more bandwidth. We’ll make the effective bandwidth person to person wider.

Spotlight Talks: Sensing emotions in games

Today, physics drive game actions. Michael Zyda, USC Gamepipe Lab, says we want to get to the point where we can play emotionally cognoscente games. Hans Lee, CTO of EmSense Corp., demonstrates how.

Games like Second Life are based on social interaction. The communication beyond the words you say are important. Emotion sensing glasses sense if you’re happy, sad, engaged, relaxed. Avatars can reflect your emotions. Through a wireless connection, you can control the game by focusing on what you’re doing. Games like Doom3 could register your level of fear/engagement.

This tech can be applied to video games, professional training, and negotiation simulation. If you apply this model to learning tasks or negotiation skills, you can monitor emotional response to decision making, and see how users interact with the environment and respond to stress. Then you can train them to control those emotions by monitoring tension and relaxation. If you create a virtual mentor, it knows your emotional state. They know what’s hard or easy for you. You can allow software to teach people.

Zyda says that once you make emotion an input in the learning environment, you need to solve the problem of how to display that emotion, and how to draw the other characters so they appear to respond in appropriate ways. Applications for the EmSense sensors include learning, for game-based system that measure when students are engaged/not engaged. In the military, if you put soldiers in harms way, how do you train them to negotiate the dangers.

Philip Rosedale, Linden Lab, makers of Second Life, says Second Life is a very dense virtual environment, originally characterized as a game. But as users began to trust the technology and environment, they began to do non-entertainment things.

Second life is like the internet, in that it’s made up of content people are building. They’re creating museums, teaching labs, and spaces to hang out and listen to music. They can look at photos and artwork, stream music and video, displayed on a virtual TV, and play recorded instructions for how do things, like use a telescope.

In this environment, anything is possible.

From Search to Eternity

Moderator Chris Shipley, Guidewire Group, discusses the future of search with the panelists:

Kapenda Thomas, Jookster
David Sifry, Technorati
Jim Lantzone, Ask.com
Leila Boujnane, Idee

Technorati: the leading provider of real-time search, currently tracking about 45 million people and what they’re talking about on the web. Technorati indexes within five minutes of when people post on their blogs. That leads to a different way of thinking about search. It’s not just about keywords and hyperlinks. Its an understanding of time and when something happens.

Ask: The fifth ranked general search engine. General search is the doorway to the overall web,. We have the sixth ranked web properties. Our focus is narrowly on search. Compared to five years ago, the needs are still similar. People do billions of searches across hundreds of categories. Our innovations are squarely on search, including images, maps and blogs.

Idee: Software developer focused on image and video search, based on image attributes. We look at the attributes that make the image look like it does to you the user. We do searching for similar images and we track image usage. We find images for customers and show them how it has been used. We are at the very early stages of what can be done with pattern and image recognition.

Jookster: We’re a social search engine, enabling users to find info on the web through a network of friends. Unlike Google and Yahoo, our key innovation is degrees of separation search. You search based on how many degrees that person is away from you. We can create web personalization based on your associations.

Q: Search is the technology, and finding is the application. That begs the question, how do you integrate these techs with other apps, how they can affect user interface. How do you reconcile search and application.

Technorati: Search is core to understanding the web in a new metaphor. The technology has been based on where the web has come from. We think about the web as the world’s biggest library. After 15 years of commercial use of the Internet, the metaphors have started to change. The core insight is, you can’t think of it as pages an documents. You need to think about it as a conversation flow or event stream. We live on the web. People are producers, not just consumers. Documents get created by people at a certain time. If you use aggregation technology like crawling, you have new metadata – when something happened, and who did it. You apply social network analysis to understand not just page rank, but the people in the network. You can get a snapshot of what is happening on the web at this moment. This change in point of view enables us to build new applications.

Q:There is a need for transparency. If you do social search, how you present the results has to be transparent to the seeker.

Jookster: The key is to determine context, so you know what the person is searching for, jaguar the car or jaguar the cat. They get the results they want based on their relationships with other individuals. Google is based on a citation based algorithm, where the popularity of a site affects rank. We look at personal rank. What sites are interesting to members of the network?

Ask: Search has become an on demand medium. How do you present the results when people want relevance, speed, and ease of use? What tools can you give them to get the right results faster. We have useful features, like binoculars to preview sites.

Q: People want confidence that when they search, they’ll get what they’re looking for. Confidence will be a winning attribute of the companies that rise to the top in this space.

Technorati: We strive for comprehensiveness. We get spam out of the results and provide people with a more comprehensive service for finding out what people are talking about. You can click on the cosmos link to see what people are saying about the person whose talking.

Jookster: Jooster was similar to LinkedIn, with the degrees of separation. So we offer implicit trust, by allowing people to select how close a circle they want to search within (how many degrees of separation).

Ask: The average user doesn’t look for a better way to search. We need to wake them up to the fact that search is still evolving.

Q: Where is search evolving to?

Ask: You have to start with where people are today, and how they perceive the conventions of search. What we’re doing is on the backend, the features and tools that help them search faster, without having to think too much.

Idee: We’re not a user facing company. The technology is not available as a public search engine. But these are the very early days of innovation in image search. Image search online today is very poor. Having comprehensive list of images is not good enough. Relevance and similarity are important. Keywords are very poor image descriptors. Better indexing technology and algorithms will improve the process. You have to look at attributes.

Jookster: The Internet is about communities now. Kids start with their social networks, not search engines. They look to their friends for recommendations on videos, music, etc.

Q: What business model supports search?

Ask: The average cost per page delivered by search is a fraction of the cost of yellow pages or direct mail. It’s a perfect union between users, advertisers and publishers. As long as they have the inventory, there will be plenty of revenue opportunities. The intersection with TV and video will be interesting. If you put a video ad in, it gets a greater clickthrough rate. The ad industry has been slow to recognize how they can use video advertising.

Q: How will you display results on mobile phones? What’s happening in mobile search?

Ask: We’re bringing Ask up to speed on mobile. What American users want is the Internet the way they get it on their computer. It’s about delivery. SMS (short message service) isn’t the solution yet, because not enough people are using it.

Technorati: Mobile is about location. In the US, getting the GPS location from your phone and trying to use it with web service is locked up. The user doesn’t want to have to tell the device where to look. It’s also about notification. People want to be notified so that they know about World Cub scores, for example.

Q: How will consolidation affect search?

Technorati: We’re excited about the idea of micro formats. A problem with the web is making more structured data available. You end up organizing the data in silos, like auctions, classifieds, etc. Why does BusinessWire still exist for press releases? If this information were on your own site, we could display things in context. Vertical search will stay here for that very narrowly focused data.

Ask: Consolidation is creating portals where people initiate their online activities.

Q: How do you get the best search results, when some data is buried in the deep web and behind firewalls?

Technorati: There will always be people out there who want to be found. But there will also be opportunities for people who run the behind the firewall sites to offer a different experience. I’m not concerned about the entire Internet going behind a firewall.

Ask: Data is more valuable to them if they keep it behind the firewall. There is deep web info available. The question is how you surface the right info at the right time.

Q: What happens to privacy? Will search extend into presence, where I go in Second Life, etc.?

Technorati: That’s an enormous issue. We only make available public info, what people choose to share. As providers, we have an enormous responsibility in deciding what we make default features of the service.

Jookster: We give customers the option whether the info they share is public or private. Giving the user a choice is the direction to take.

Q: What is the future of search?

Technorati: Thinking beyond keywords and search results, we’ll start thinking about how we can find things that interest you, send you notification when we found it, give you the delight experience of discovery.

Ask: Search engines still do a poor job of understanding user intent. We need to build technologies that meet their needs in better ways. Search engines will make things more seamless for the user, for example shorten the gap between finding the restaurant and making a reservation. And, once you find things, you want to track them.

Idee: The future of search hinges on the introduction of new indexing technologies, particularly in image and video searching.

Jookster: We need to simplify the process of finding information on the web. Tagging, for example, has innovated in that area. 

Perspective: Usama Fayyad, Yahoo!

Usama Fayyad, Chief Data Officer and Sr. VP, , answers the question: What research needs to take place to build the future of the Web?

He talked about the Yahoo! Research vision to be the place where the Internet’s future is invented. They achieve scientific excellence by recruiting some of the most talented scientist in the world and having an open model, aggressively publish o get the peer reviews.

Fayyad talked about the types of research they do, including how they developed algorithms for auctioning search keywords. The systems enables advertisers to bid on search keywords by starting with the minimum possible bid. The model in use today is to have the highest bidder win, but pay the second highest price, based on the theory that the winner feels they paid too much. If you do it scientifically, you discard that model.

To learn the impact of brand metrics, Yahoo! looked at measures of brand lift: brand awareness, brand favorability, purchase intent. If you were exposed to a brand ad the week before a search, you’re 100% more likely to click on a sponsored link. He says you have to think holistically, about the interactions of the media experience, to create more impact through advertising opportunities.

The problem of how do you right an algorithm that can figure out what photos when they all have the same name, like jaguar (car, cat, etc.). When people tag their photos, the solve that problem. Yahoo! Is researching how social media can be leveraged to solve problems in search.

For example, lets people agree on tags, then use them to share and organize collections. This makes it easy to tag photos, so the user doesn’t have to make the decision. He demonstrated a camera phone that knows where it is, so when you take a photo, it lists options on how to tag the phone. It suggests tags based on how popular tags are in that area. You can click a tag to add photos from others collections.

Tags that have to do with geographic location can be generated on mobile apps, like your mobile phone. If you take a photo with a digital camera, you can tie in to your calendar so it knows where you were on the date the photo was taken.

Fayyad says we’re at a primitive stage of development of search technology. In the future, if you’re browsing, there may be a predictive feature based on your online activities. The use of personalization will change things. Soon there may be no distinction between sponsored and organic search, because the predictive model will know if you’re looking for a business. 

Spotlight Talk: Craig Newmark, Craigslist

Craigslist has become one of the 10 most popular places on the Web. Craig Newmark of Craigslist answers the questions: How do you create that vibrant community? (Text is not verbatim.)

We’re a pretty simple platform, helping people with everyday needs. The marketing terms are user-generated content. I don’t think in those terms. Someone said our site is a marketplace in the ancient model – chaotic, unruly and vividly human.

Our site is like the old roman forum, or like a modern flea market. They go there to buy and sell, but also to talk to other people. As a UGC site, we turn over the responsibility for policing the site to the people who use it. We’ve learned that people are trustworthy. The result is, we have a culture of trust. We work hard to keep it that way.

My title is customer service rep and founder. CSR is what I do with my time.

We turn the site over to the people who use it. In contrast to corporate sites, which are embroiled in failures of trust. We find that there is wisdom in crowds. You give people the chance to exercise power, they will respond well to that. Sometimes, they’re prone to mob rule and panic, so you have to nurture the community.

Every day we fight of spamvertisers, political disinformation gangs, personal attacks.

Right now craigslist is in the center of the media storm. They talk about our effect on newspaper classifieds. We do affect those markets. But, we do it by bringing value to ordinary people. The media landscape is being altered in big ways, e.g., citizen journalism.

Craigslist does things a little differently. We operate on basic values, like the golden rule. Give people a break. Remember what if feels like to be left out, then include other people. These rules drive our online flea market.

We don’t need to monetize everything. We rely on word of mouth to build the community.

Innovation in Established Organizations

Talking about how large-scale enterprises drive innovation (excerpts and paraphrases), with panelists:

Linda Sanford, IBM
Sean Park, DrKW
Kim Polese, SpikeSource

SpikeSource: We’re part of a new class of companies that aggregate content and make better sense of it for businesses. We’re finding different ways to work with customers, so they’re part of building the product.

DrKW: The challenge in large organizations is getting adoption on a non change of generation timeframe. There will be change with the next generation of employees, but you can’t wait 10 or 20 years for the guard to change. And some CEOs have their power bases attached to the status quo and aren’t interested in change. In the financial services industry, innovations outside the frameset of products is difficult.

IBM: At our research facilities, we can have four generations represented. What motivates each generation is very different. How they work and interact, what they look at is different. They each bring something valuable to the challenge of accelerating change.

Q: It’s a truism that it’s not the technology, it’s the culture. How do you evolve the culture?

IBM: We’ve developed a framework called the drivers of culture change. You have to change many aspects of the messages you send about your culture. It’s making sure you have leaders who model the new behaviors, and having tools that allow people to collaborate. Recognition and reward systems have to change to reinforce the culture.

DrKW: In any company, there are leaders and observers. We don’t need everyone to be on the cutting edge. Find the ones who do have a passion and ability to lead change and take risks.

SpikeSource: How businesses work and relate to their customers is changing. SpikeSource takes open source technologies and makes them palatable to companies. If they’re willing to experiment – even in a sandbox were they try new things – then they get it.

Q: As the lines between business and consumer technologies blur, are you seeing blogs, wikis, etc. have an impact in your organization?

DrKW: Online trading for retail investors is gaining adoption in part because people are comfortable buying books online at Amazon. The barriers are up front. Once you get people to try the technology, adoption become fast because the technology is powerful. Social software is a perfect laboratory, because real time proximity is important, but too many channels of information are hard to deal with. With phone, email, chat, blogs, wikis, RSS, one of the challenges is in introducing new things, is that it will disaggrate the communication. We do blogging and wikis internally, but the name wiki hinders adoption because it sounds like a toy or too geeky. Allowing people to collaborate in a time shifted way is the killer app of wikis.

IBM: These tools allow employees to connect with others with similar passions. Then communities of interest form to collaborate and work together. When we have a crisis, people come together to solve the problem, and they use blogs and wikis to do it. How do we make it something that they feel they can use to share expertise?

Q: This requires organization to give up some control. How do you deal with employees who don’t use the tools the way you intended? How do they make sense of the complexity?

IBM: We recently reassessed our set of values with an online jam session, letting the employees chat about the values. These values guide how we behave and what we do.

SpikeSource: The problem of choosing open source components can be frustrating. We built a business around making sense of the changes to open source components. We aggregate, test and apply the upgrades. The way we work with companies is, we say you don’t have to interact with several entities in the open source world, we’ll do that for you. So we’re a second generation intermediary (Red Hat was a first generation).

DrKW: We’re stuck in a command and control structure. But in the enterprise, we never really had control in that way. The multinationals have no choice but to use distributed intelligence. Then it’s about making that work for you so you don’t have rogue elements. You need someone from the top to set the tone, and not let local feudal barons be an impediment to change. It’s fear vs. greed, walking the line between scary change and pragmatic change.

Q: When it comes to intellectual property, what is the middle ground to get beyond the established companies that have a knee jerk reaction to these issues?

IBM: The fundamental principle is that there has to be a balance between protecting the creators rights, so they receive value for it; and, if it’s in their specific domain, getting the idea out. In the past we had the silo approach, where innovation came from one company, Now we’re seeing it come from distributed companies.

Q: Is there a dichotomy between routine and innovation?

IBM: Backend process innovation is critically important. This impacts the role of the CIO. That role is shifting not to ignore infrastructure, but to provide focus on the business process. In the end, the tech is just the automation of the process. Reinventing and transforming the process has to be the focus. Processes in most companies today are vertical, siloed, command and control processes. We need to parse the processes, take out the inefficient or irrelevant portions, and focus on the processes that are core to the business/value proposition. That is driving us to let go of the processes that someone else can do better. That frees up resources for innovation in what’s core to our value proposition. We’re not only looking to take cost out, we’re also looking to simply processes for the users. Business value metrics help you measure which processes to focus on.

Q: What is the link between a top-down driven R&D and bottom-up innovation?

DrKW: It’s a question of resource allocation. The best way forward is to allow emergent intelligence to drive where resources are applied. You need to make decisions faster, instead of waiting for budget cycles. We’re looking for ways to validate initiatives by putting in real time measures. In the financial services industry, which is highly regulated, it’s not just creative freedom vs. control freaks.

IBM: We’re reinventing the financial planning / resource allocation process because it was all cost controlled. There is a balance between controlling costs and shifting investments to where the growth is. Markets are not annual. It’s top down, because we have a business model to deliver against. It’s bottom up, to understand the reality that the client sees. And the middle view that says, here are best practices in other industries (based on business analytics). This is a fact based process, not emotional. And it’s aimed at maximizing revenue growth.

Q: How to you sell to large enterprises in the process of transformation?

SpikeSource: Find the point of pain that you can solve, Make the customer part of development.

DrKW: Find out who the right people are to talk to. They’re not necessarily the procurement officer. Don’t be afraid to sell at the edges. The risk-reward of aiming for the enterprise-wide rollout is not worth it.