Chez Serge

The Internet disruption

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About Second life, and virtual worlds…

Jun 20

Posted by serge in innovation, virtual worlds | 19 Comments

Second Life has recently generated a lot of buzz. It all starts with a post on their web site : restructuring. More precisely, 30% of employees are fired, and their Singapore office closes.

I have seen many analysis of this, talking about too much business orientation, or a step back to B2C.

It is a serious issue for all people who, like me, believe in the business of virtual worlds. We need to remind the history of Second Life. At first, Linden Lab was created by Philippe Rosedale with the aim to build a software that would be sold. Second Life was created as a showcase, a proof of concept of the capacity of the platform. However, Philippe is more and more interested in the social aspect of Second Life, to a point that he may have forgotten the business issue. Not a good thing to do when you have Mitch Kapor, Pierre Omidyar, and Jeff Bezos at your board. Well, facebook is in the same mood, but facebook is over 400M accounts, while Second Life is around 16M, which is low, even though the peer to peer transactions amount for 567MUS$ in 2009, a very nice result in my view. So Philippe was replaced by Mark Kingdon, who decided to go back to the basics, and create an enterprise solution. Well, he created two enterprise solutions : the first one is just owning islands in the main grid, with specific features such as more flexible avatar naming, the second one, “second life enterprise beta”, being beyond the firewall.

This is, in my view, the main issue: it is not possible for a company to have both a B2C offering, and a B2B one. Amongst all issues, two are huge. The first one is about culture; sales process are not the same, sales people are not the same, pitch are not the same, eventualy it means having two different teams, which is costly. Let us remember the excellent words from crossing the chasm: “better have three customers who talk together than ten who don’t”. The second issue is about product roadmap; obviously, the requierment from a social network are not the same as the one from companies, specially the corporate ones. This leads to tension on the product. Moreover, social networks are not that much the friends of CIOs… Consequences are dramatic: the residents are more and more disapointed by SL; the B2B inworld offer seems to offer a low level of reactivity (friends of mine talk about many weeks before having an answer), and Second Life enterprise beta business model, 55k$ per year for 16 islands but only 8 simultaneous, looks outrageous, specially compared to other collaborative tools.

What is emerging now looks like a willingness from resident to step back from SL. For those close to the original spirit of Rosedale, opensim seems a good candidate. However, remains a big problem: what about all assets inworld? Everybody has in mind the closure of metaplace, and the resulting loss of assets. Maybe this is why VenueGen has offered to migrate enterprise assets into its own world?

Shall we assist to a Second life crash ?

Whether it happens or not, I still believe in virtual worlds. This excellent post made after Thinkbalm decision to widen its scope (we must all thank Thinkbalm for their constant support to Virtual Worlds), shows many positive coming aspects. In the hype curve, Virtual Worlds are clearly at the Trough of Disillusionment. Time is now on for technology to show its real potential.

What are the positiv aspects?

  • The most important is the vgov initiative, lauched by US administration, whose aim is to manage virtual worlds for all US administrations. The Internet exist mostly because of the important role played by US administration, the same story may happen with Virtual Worlds. Four platforms have been selected : Web.alive; Forterra (acquired by SAIC); teleplace; and Vastpark, a very innovative opensource platform. Second Life has not been slected.
  • Education already makes a huge use of virtual worlds. The special issue of the journal of virtual worlds research shows interesting results.
  • Healthcare sector is also a place where virtual worlds have had big success, in SL, but not only. A study performed by doctors showed the great advantage of virtual world as a training tool.
  • The enterprises are more and more interested in serious games. I can’t imagine serious games without a virtual world. With this respect, the openness of the technology becomes a key success factor…
  • Tradeshows, conferences, are more and more moving to virtual worlds, with big success. Not only cost of travel is lowered, but the quality of interaction is superior to 2D tools, as shows IBM case study. Robots have now their virtual conference; and even wine producers go for it !
  • On the social side, Kids and teens are massively in virtual worlds. Almost 400 millions users in the range 8-15 years old are in virtual worlds, comparable to the number of facebook users, but who has a larger scope in terms of age.

I would like to add a personal touch. Many times, I have met people very reluctant to the internet, people who did not understand the importance of social networks, forum, for whom the web was no more than an online content tool. I was always able to change their perception by showing them machinimas realized in corporate situations. Their reaction was always the same : “at last I understand what it is all about”. Well, let us be honest : facebook interface is amongst the most complicated we can imagine. At least, a 3D interface is easy to understand.

The immersive web is now entering a time of obvious concrete realizations. On the technological side, tools are diversified, some close to games or social networks, some close to corporate intranet tools. The biggest improvment is their availability through the browser. I It is now obvious thet the browser is the entry point to the Internet, and 3D plugins are the preferred solution to clients download. WebGL norm, when available, will be a huge step.

Virtual worlds are now entering their mature phase, and we shall all thank SL to have shown its potential value.

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Individual incentive, and collaborative work

Jun 11

Posted by serge in innovation | 6 Comments

Yesterday I was at a conference with Frédéric Lippi, one of the two managers of Lippi, the 300-employee company that moved to an Enterprise 2.0 model, as I described here.

Amongst the managerial decisions they took, was one to abandon any individual incentives. What Frédéric said is, “You can’t tell people to work in a collaborative way, and give them individual incentives; there is a contradiction in there”.

Some people reacted in the audience, (Frédéric confessed that some people even considered him Marxist), saying that this was too radical, and that there were surely some be cases where individual incentives were appropriate. When I asked them for examples, one mentioned rewards for traders, but for obvious reasons everybody said that it was not a good example…

Then someone said “sales people”. I still believe than even sales people should no longer have individual incentives.

I am working with big French retailers. Retail culture is based on internal competition, and each company love to compare every month which store did better than another, like “oh, Marseille came before Rennes this month, great job!”. But it may happen in some future that they abandon this…

The shift in approach actually comes via the Internet. When e-commerce web sites were first opened, they were considered as another store, and were compared as such. There were many drawbacks to this, let me quote two.

The first one is pricing.

It is usual that each store is responsible for its pricing policy; the same product can have, therefore, different prices according to the city the shop is located. But then, how to price the product on a web site?

The second one is that the Internet is the enemy of sales people, because the web site is a competitor to sale in store.

Unfortunately for them, more and more customers do a lot of online research before buying in the shop. It is shocking to then hear a sales person saying bad things about the Internet.

Then came this practice: any online transaction allocates the money to a physical store.

One interesting result is that, suddenly, the Internet becomes the salesperson’s friend, and sales people become more open to customers who surf on the web.

So, the web site becomes a friend. Then, why not another store from the same brand?

Customers are more and more mobile, and what they see is a brand, not a store. It may happen than a person shops in a store for heavy products, and asks to pick-up in another one. If sales people are individually incentivised, they will lose out.

The Internet is reshaping enterprises into a collaborative mode. I bet that individual incentives will vanish, because it will become counter-productive to achieving sales.

Interestingly, I found a video which explains this even better.

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The innovative side of wikipedia

Jun 7

Posted by serge in innovation | 4 Comments

Many things has been said about wikipedia, good ones, and bad ones. The fight is huge, between those who still believe in content written by experts, and those who say that the quality of wikipedia is at the same level as any other encyclopedia. The comparison made by Nature between wikipedia and encyclopaedia Brittanica, which said that levels were equivalent, has not calmed down the battle between pros and cons of the user generated model of wikipedia.

Many other interesting analysis can be made about wikipedia. It is not true that anyone can contribute: there are teams of people, who are usually experts in one field, who control any change on many articles, and prevent a lot of changes to happen. Wikipedia is not a place where everyone is free to do whatever he wants. There is a strong, albeit secret, governance.

However, wikipedia is a very innovative encyclopeadia, not because it is user generated content, but for at least four other reasons.

The first innovation in wikipedia is the “view history” tab (link is on the article about wikipedia). All changes made to an article are kept. This tab allows not only to see how many changes were performed, and when, but also to compare two different versions of the article. It also allows to roll back to a previous version of an article, a very interesting feature if any deliquency activity was performed on any article. But the innovation is there: it is possible to understand the history of the article.

The second innovation is another very important tab : “discussion“. Very often, specially in any collaborative work, shared intentions are not obvious. There always a need for a space where people can discuss about the result, before taking any decision. This is the place where it can be done. It id also the place where apprentice writers should start, before changing the core article itself.

The third innovation is about meta sentences, to be found at the beginning or inside any article, such as : “This article does not cite any references or sources.”, “Please help improve this article by expanding it“, “This article may require copy editing for grammar, style, cohesion, tone or spelling“, or, much more fundamental “The neutrality of this article is disputed“.

The fourth one is about different languages. On most articles, on the left side, one can find the same article in other wikipedia. It is not a translation, it is the same topic. The first side effect is that wikipedia can be used as a tranlation tool. I was doing a conference in front of Italian people, and I had to explain the long tail principle. I started from the entry in the English wikipedia, and fortunatly Italian was on the the languages, and by clicking on the link, I was able to explain what long tail was in Italian.

As of june 2009, there are 272 different wikipedia. It is the very first time in mankind that regional, or local languages have their own encyclopaedia in their own language which is not a translation from an occidental one. I think we see only the beginning of the impact it may have on local cultures.

Wikipedia is an encyclopeadia where the history and the creation process of any article is visible, where articles contain information about their quality, which is available in 272 languages.

There lays its innovation.

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part 2 – How could enterprise become 2.0

May 9

Posted by serge in innovation | 5 Comments

In my previous post, I briefly introduced how the Internet, by empowering peer to peer mode amongst customers, forced enterprises to reconfigure themselves, in a more cooperative manner. Now, once an enterprise is willing to move to 2.0, how can it be done ?

There have been many attempts to transform enterprises into horizontal mode. Quality circles, matrix model, lean management, etc. When looking at them, they may have brought slight improvement, but no major disruption. For most of them, they were used by people who had little understanding of the importance of technology. The general idea was that technology would follow business restructuration rather than playing a major role. Worst, none of them seem to have seen the impact Internet could have on enterprise restructuring.

However, even when considering the technology, and the major role played by the Internet, there are always many ideas that flows around. As an example, marketing must change its habit to do market studies, and should see what happens in blog, forums, twitter, social networks, etc. As pointed out nicely by Moore in “Crossing the chasm”, it is better to have less customers who talk together than many customers who are not exchanging.

Whenever an enterprise sees its customer exchanging, the value of it is big. As another example, sells people must go in the Internet, and meet their customers online, not only in real life. Working for Renault, I realized in a forum that one top car dealer was in a discussion forum about the brand, and was exchanging a lot with the brand’s customers, instead of waiting for them to come in his physical place. I think he should have been appointed as sales director !

A comment I often hear from CEOs is “there is so many things happening, how can I catch them ?” Well, in order to better track what happens on the Internet, everybody in the company should watch, and post whatever he or she sees. Only the network can interact efficiently with the network.

But all those are just tricks, ideas, which need to be ordered.

I consider an innovative process as a systemic relationship between three major components: structure, tools, and behaviour. By structure, I mean how an enterprise is configured: who reports to whom, what are the information and control flows, how decisions are taken, etc. By tools, I mean all information management tools: emails, intranet, ERP, repository, etc. By behaviour, I mean all the human aspects of an enterprise: fear, enthusiasms, desire, hate, etc. Any attempt to move one of those three aspects, and letting the other untouched, has lead to a failure.

The Lippi case is an interesting illustration of how to do. Lippi is a 300 employees French company which does industrial fences (France loves fences..). Amongst their customers, they have airports, industrial zones, etc.  To make the story short, Lippi decided to work on three axis:

  • Lippi created a web school, and all employees without any exclusive were proposed to follow training. Courses were all about digital world, ranging from how to set-up a blog till digital video processing.
  • Internet tools were used inside the company, on top of them an internal twitter, which acted as the information backbone of the company.
  • The top manager decided to reconfigure the company, by taking some very disruptive decisions : traditional control was abandoned; middle management role was shifted to medium term thinking, and to support their employees when they had troubles;  organizational chart became fuzzy, but sociogram becomes stronger.

The outputs are interesting. Employees became more involved in the life of the company. A worker decided to bring his own movie camera to shot how fences were assembled, and posted them on youtube. Others decided to create a wiki. Pressure of middle management was replaced by pressure of the peers. On twitter, a delivery problem was solved in 20 minutes, without the customer even noticing there was an issue. Employees set-up a blog, which contains both nice or funny information about everyday’s life of people, and business information, such as the contracts Lippi signed with various airports. Well, this is so much human.

In 1996, I created the innovation tripod :

With this idea that all three components must be globally considered, in a systemic manner.

Lippi did it, and came the following scheme. They are really pioneers.

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part 1 – Why should enterprise become 2.0

May 9

Posted by serge in innovation | 9 Comments

That the Internet impacts business is now obvious. The Internet is, by essence, a total disruption to the usual governance of traditional corporate companies, business, universities, and even politics. To say it in a few words: there was the CEO, the Professor, the Expert, the Manager, God, and everybody was happily listening to the speech going down. The horizontal flow of information between people was badly considered, if not disallowed. The generation pre WWII did not permit children to speak when eating at the table. Even now, there are schools who prevent students to talk together; same as those corporate companies who block the access to facebook, or to any other social network.

Then came the Internet. We tend to forget that at its very beginning, in the 70s, Internet was genuinely in peer to peer mode. I could access the content of someone who could access my content. Every computer had an IP address, and amongst the very first services, were email in 1972, and usenet, the ancestor of modern bulletin boards, in 1981. Interestingly, the web, which was such a powerful invention that most people confuse the Internet and the Web, was a regression to the foundation of the Internet, because it reintroduced a client-server architecture. Many companies do consider their web site only as a way to deliver content, thus making it close to a television model. Funnily, the only category of services which are in the genuine type are the one many government try to hunt down, like napster, emule, edonkey, etc. Skype is another example of such service, and the viability of its business model has deeply impacted traditional telecommunication operators.

It is not that the Internet has invented peer to peer. Horizontal relation were always an important and efficient way of communicating. Resistance movements had, obviously, a weaker hierarchy, and were mostly functioning in peer to peer mode. In terms of commerce, it is well known that buyers tend to more listen their friends than the sales person. The huge impact of the Internet was to amplify this social form to an extent where we can easily say that it is the main social relationship people are wanting now. Facebook, by reaching 400 million users, at the time I write this article, is the third country world-wide, after China and India, but before the US…

So we are facing two extreme governance models :

Hierarchy
 Network
Value is in : Production Transaction
Information flow is : Vertical Horizontal
Meaning comes form : Decisions Interactions
Leader is : Manager Moderator
Decisions are : Imposed Emerged
Structure is : Designed Self Organized

There is no judgement so far, between one model or the other. Both have advantages, both have drawbacks, and, as usual, it is a pure matter of context to decide which one is the best.

However, what is happening is more subtle:

  1. customers are in network mode. The are part of forum, social networks; they exchange lots of information, they are in the “usage” layer, they are smart, and the real innovator emerge amongst them, or, to put it in a more business oriented manner, the Internet allows to see which are the best customer to work with.
  2. enterprise’s boundaries became porous. Not only because any customer can access to IT system through web site, but also because any employee is much more well equipped at home than at work: he has a PC or Mac brand new, he can surf where he wants without any firewall, he can go onto youtube, dailymotion, vimeo or any video site, and, much worst, by surfing on blogs, forum twitter, etc. he can see his enterprise from outside; he can see what people say about it, and then he feels the contradiction between what corporate communication says, and what he experiences…
  3. The enterprise remains in hierarchical mode, with silos, departments not talking each other, based on a competitive model.

This combination of a hierarchical enterprise, with porous boundaries, and networked customers, is not sustainable. The silo model is slower than the network model, it does not allow information to circulate freely; employees are not encouraged to work in a collaborative manner. Customers, on their side, see one brand, want more fluidity in their relationship, are not interested in internal wars. As an example: when a customer buys a product on a web site, or even in a physical shop, and want to return it in another physical shop, he does not understand why this may not be possible.

The Internet is bringing tension on this matter, but positive tension. How it is solved (or dissolved) depends upon many factor, but we can express two extremse : in some big corporate groups, employees who are close to customer are going to network mode, whether it is official by introducing social networking tools inside the company, or totally uncontrolled by hierarchy, who suddenly discovers that few thousand employees have opened subgroups in facebook, linkedin, or any social network. Another extreme is a little enterprise who has the capacity to change itself, by reshaping the enterprise around processes, training people to digital tools, and introducing Web2.0 tools to support information backbone. In any case, middle management is the layer which does suffer the most.

Enterprises should no longer deny this aspect. They should really move to another governance, more networked, where middle management role shifts from controls to support. This is not an easy task. But enterprises who do not switch may be one day in dire straits.

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Australia adopting gov2.0

May 3

Posted by serge in government, innovation | 3 Comments

Australia is a very interesting country, when it is about the Internet. On the bad side, there are forces wishing to filter the content in a strong manner; there is no flat fee illimited Internet access. On the good side, they are quite ahead in terms of virtual worlds, and, above all, they are quite advanced in terms of government 2.0

In June 2009, the government launched a government 2.0 task force, which published a report 22nd december 2009. The philosophy was very interesting: recommendation were to work on three different lines: Opendata access to administration, use at most web2.0 tools to communicate with citizen, and change the culture of administration employees, to a more collaborative mode.

On the 3rd of may 2010, which means only three months later, the Australian Governement officially reacted to this report, the document being produced under creative common license!

The analysis of the answer is very much encouraging. It start with :

The Australian Government is committed to the principles of openness and transparency in Government, and a Declaration of Open Government is an important affirmation of leadership in these principles. A Declaration, in conjunction with the Australian Government’s proposed reforms to the Freedom of Information Act 1982, will also assist in driving a pro-disclosure culture across government. Accordingly, the Australian Government will draft a Declaration of Open Government for presentation to the Parliament, and through it, to the Australian people.

On the 13 recommendations, only 1 was deferred, 1 was noted, and the other one were agreed, with or without modification. One of them will be the creation of a central portal site, data.gov.au, to follow.

This may seem not enough, but Australia, like US, is fast moving in terms of government 2.0. Congratulation !

I wish France would do the same !!!

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Coming out of the Journal of virtual worlds research on digital economy

Mar 10

Posted by serge in Academic, innovation | No Comments

The volume 2 number 4 of Journal of Virtual Worlds Research is now available. Co-edited with Mandy Salomon, from CRC, the topic is :

“Virtual economies, Virtual goods, and service delivery in Virtual Worlds”

In this special edition on virtual world goods and trade, we are pleased to present articles covering a wide range of enquiry from a global cohort. Some, like Edward Castronova, Julian Dibbell or KZero’s Nic Mitham will be well known to you as distinguished thought leaders in the field, but equally it is our pleasure to introduce some exciting new voices. Our collective comprises academics, practitioners, journalists, a documentary film maker and perhaps the youngest contributor to JVWR yet, Eli Kosminksy, who attends high school in upstate New York. We also point out that this issue extends the format to include Anthony Gilmore’s pictorial story, Julian Dibbell’s audio interview, and Lori Landay’s machinima. In real life, most contributors live in the US, the UK and Europe, and we, the editors, are based in Australia and France. We address warm thanks to the team at Texas University, especially to Jeremiah Spence, our editor –in-chief for his guidance throughout this process.

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Second Life versus Vastpark

Aug 10

Posted by serge in innovation | 13 Comments

I had recently a very interesting conversation with Greg More, from the Spatial Information Architecture Lab at RMIT. Greg is a really innovative person, sees the potential for virtual worlds, and does a lot of interesting projects around spatial data visualisation. Greg and his students have worked with different virtual world platforms.

Greg @ RMIT

Greg @ RMIT

In the middle of the lunch, as I asked him about Vastpark which he uses a lot, he suddenly said “Second Life is like writing in html, Vastpark is like coding in php”.

I found his remark fascinating, especially in the context of corporate companies usages. Collaboration is, so far, the main application of corporate virtual worlds, and both companies have made such announcements. Linden Lab launched its collaborative portal, and Vastpark opened the beta of 3C, its collaborative environment.

So far, Linden Lab has not released a new tool. Their collaborative portal is a marketing campaign aimed at presenting interesting usages of Second Life by corporate companies.

The architecture of SL is quite straightforward : one island is one processor, and users do have a set of tools to create content, which they own. Authentication is performed via a centralized server outside of the corporate firewall, a little bit like a telecommunication operator OSS/BSS.  The client is open source, but not the server. In terms of API, apart from SAP which seems to connect to the reader and not the server, the only open APIs are registration, mapping, search, and some live data. Objects created are stored on the platform, and any duplication is done “manually”.

Well, this reminds me of the first e-commerce sites, where people had to manually transfer the catalogue from a database to full html web page. Pure hard coding. Then, came php, mysql, mashups, javasript, ajax, etc… And, suddenly, life became both much easier, and much richer.

Now, Vastpark. It is an open source product, made of 4 components, all downloadable (with source code as well): the reader, the creator, the publisher, the server. The reader, the creator, and the server are easy to understand. But what is the publisher?

The architecture of Vastpark is totally different: it is a distributed architecture based on components which can sit virtually anywhere. When someone creates an object, this object is published somewhere, and can be retrieve by any server, by any developer. The virtual world which is developed can simply access all the objects created,  in a mashup type logic. Therefore, no need to duplicate elements inworld : duplication of the access is enough, as long as the objects are published (many already are on Amazon S3).

Another interesting point: everything can be described using IMML, an XML type language developed specifically for this purpose. Therefore, objects can be created “on the fly” just like php which generates html on the fly. In fact, it can be done in three ways: through its IMML markup, using a scripting language (LUA is currently supported but more choices will come) and through plugins (plugins may be written in any .Net language: Iron Python, C#, VB, etc). All of these can be written as components of remote widgets that developers can easily embed into their worlds.

In Vastpark, almost everything is a plugin. Voice control is a plugin. Avatar control is a plugin. We could even say that Vastpark is just a network which does interconnect plugins. With this respect, connecting the server to existing content is easy. A connector to Twitter, Flickr, eBay and Skype are already available.

This architecture is much more distributed than SL (who runs three server farms, one in Seattle, one in San Francisco, one in Texas). The partnership with Badumna allows to interconnect in a very efficient manner users world wide distributed.

We can see now the difference in the architectural approach: the component based chosen by Vastpark allows a greater flexibility, and a smoother integration into brand new worlds. As the virtual world projects mature, as more and more virtual world will integrate coorporate companies, this forward thinking approach makes all the difference.

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About the french “Graduate response” law

Mar 9

Posted by serge in business model, innovation | No Comments

We are, in France, facing a big threat : the introduction of the graduate response bill, a law which would require Internet Service Providers to disconnect subscribers involved in multiple instances of illegal file-sharing (see here or here for some comprehensive understanding). Urgency procedure have been used to avoid multiple discussion and to pass the law as quickly as possible.

I had, before this, sent an open letter to our minister of digital economy. There was a strong response from other people on this topic, and I have been asked to translate its content in English.

You will find in this post the underlying concept of file sharing. These ideas may shed light on “illegal” downloading, and highlight the limitations of the French Government’s proposal.

1) Economy of tangible versus economy of intangible

There is a fundamental difference between a tangible and an intangible economy. The first one is an economy of scarcity, the second one an economy of abundance. Sharing a tangible good means divide it. Sharing an intangible good means multiply it. Therefore, the economic laws which govern the sales of pizza are totally different from the one which govern sell of a music file.

Internet propagates the caracteristics of an intangible economy. However, the content industry is doing its best to go back to an economy of scarcity, first by using DRM (a practice increasingly abandoned), or by applying heavy penalties – even, in some circumstances, imposing jail sentences – to people who have supposedly donwloaded content illegally.

This is the opposite of were the world is heading. Analysis (like this compelling excellent article, in French, by Roberto di Cosmo), show that Internet model creates more money for the artist. We see the emergence of web sites such as sellaband whose goal is to put together artists and fans, in order to allow the latter to invest in the production of a CD, then to be later rewarded by a percentage on the sales. This is not new, Kevin Kelly’s prescient an NY Times article dated 2002, already gave some hints about where was the value shifting. Another excellent analysis, from Sloan Scholl, had shown that Long Tail (which many people confuse with Pareto law) have added another 500 MUS$ revenus to the book industry, just by letting people acess to rare books.

The world is shifting to a peer to peer model (as I have propsed here), wathever the content industry think of it. Instead of projecting themselves in the future, they complain to the government. If the French government protect them, they will die, because history shows us that over protection always has, for consequence, lack of innovation (just like the Egyptian, who refused the alphabet and prefered to increase the power of the scribes, were eventually overtaken by the Greek who decided to  built their society on top of the alphabet as a paradigm shift). How will they die ? Very simple, as new artists are digital natives, and as they understand the value of the peer to peer model as a faster mean to increase awereness of their potential audience, they avoid the old-school industry major. The catalogue of the content industry will therefore shrink, leaving us only with old stars or low quality artists. Not very sexy.

2) Network as the real issue

Internet is a peer to peer technology. It has always amazed me that very few people know the meaning of “A” from ADSL. It is very simple : Assymetrical. ADSL was invented by telecommunication operators, focused on VOD. Of course, for video viewing or downloading, more bandwidth is needed to stream the movie than sending information. For a 12+ Mb/s download, the upload is at most 1 Mb/s.

But, again, Internet is a peer to peer technology. People upload their content on flickr, Youtube, dailymotion, facebook. People write in forums, wiki, they send emails with tons of digital images. Going away from top-down vertical market, Intenet shifts the value in the peer to peer.With this vision, assymetry is a total non-sense.

We need more : as long as bandwith will remain low, usages will not take off. Back in 1997, when I was at France Telecom, Wanadoo had multiply by four teh capacity of a backbone link which was saturated. The link was saturated again 12 minutes later… Optical fiber network is the true crucial issue. No e-health, no e-environment, no e-learning can be properly done with ADSL networks. Our ancestors were able to build electricity down to everybody, the same must be done with fiber optical network.

Above this, the business model is of great importance. Any pay-per-use business model prevents the expansion of usages. In France, we have flat fee, but other countries are still on pay per use. Mobile usage is another example where not all operator undestand the value of flat fee. The roaming data tarif may become outrageous (in some cases, 10 euros per mega transfered !!!). But the telecommunication operator are reluctant to give up such models. Again, what will be the consequence of this lack of innovation in the business model ? As soon as an Internet provider, borne of the Internet culture, secures a a 3G license, s/he will install femtocell on every subscriber modem, and create a 3G network with little investment. Should a community business model (like Fon) sit atop this, then there would be real innovation, and real disruption. It would create a peer to peer based economy, which may prove more robust and more suited to the need of the citizen than any traditional vertical subscription based model.

The world is changing from a vertical flow of goods and information to a market place. Peer to peer is not to be feared, it is the future of many organisation. Rather that setting punishments, the role of government is to encourage, lubricate this dynamic into this market place, because this generates value.

Government should let the traditional economy gently, and concentrate their energies on building high bandwith symmetrical networks, both for fixed and mobile, and framing the creation of value inside this, for the benefit of citizen, and innovative companies.

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Some thoughts about Internet and Innovation

Dec 2

Posted by serge in Strategie, innovation | No Comments

Some times ago, I was doing a conference for Lunch@Circle, a French think tank. And they interviewed me.

It is a condensed form of all my thoughts about the fact that innovation carried by Internet takes its sources on the way Internet was built. Looking at the governance of the Internet enlights the dramatic paradigm shift that we are just starting to experience.

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