15 November 2010 |
What trends will influence telecoms development in the coming years? Tim Phillips finds out from the futurists what they think will be the norm in 10 years' time.
“The rule of thumb for futurists is that to get your head around how much we can change in the next 10 years, we have to look back 20 years,” says Sheila Moorcroft, research director at Shaping Tomorrow. She has been in the future business for 20 years, so she speaks from personal experience. “The problem with long-term change is that we absorb it and don’t realise how much has changed. Twenty years ago, there were about 100 websites. Mobile phones were something you hung over your shoulder.”
Moorcroft’s point is that too many companies are short-term and narrow in their focus. Companies, not unreasonably, compare themselves to others in their sector, not least because that’s how external investors rank them. The demands of investors, especially in an economic downturn, often take priority. When a CEO’s tenure is measured in months rather than decades, the pressures of short-termism can be irresistible and subtle.
The role of the futurist is to be the contrarian and open our minds to the bigger picture. By working across disciplines – Moorcroft has worked with clients including GlaxoSmithKline and BMW, as well as telecoms companies – futurists can examine wider trends and unexpected competition. And by not measuring success by share price or quarterly returns, they bring a different discipline to an industry where infrastructure investments have driven strategy for a decade or more. Moorcroft isn’t thinking about routers or IP networks; she’s more worried about child labour and who will remind people to take their pills.
Sustainability and climate change
Asked about the trends that will dominate strategy in telecoms for the next 10 years, Moorcroft’s answer is sustainability and climate change. These issues will affect the buying patterns of customers, if economic incentives are in place. “Taking account of sustainability and climate change in your business will become the norm. Some telecoms companies are already investing a lot in this, such as Nokia and Samsung. This involves corporate social responsibility too: such as whether child labour is being used to build your products.”
Moorcroft is also concerned about sustainability because of its effect on the price of commodities such as rare metals – and the most important commodity, water – as these affect the price of manufacturing technology. Her other concern is that carriers make decisions based on past successes. “The problem of unintended consequences is that once something changes, the providers constantly have to work out how it affects them, as the emergence of app stores demonstrates. It’s about escaping from the mental models that mean you are defined by the things that developed your success.”
App stores are an example of a ground-up technology that, in just a few months, has undermined years of investment in the application development platforms of operators. For Moorcroft they also show that, in the future, much of the value created by networks will not be in moving large amounts of data through cables over long distances (think HD video) but instead will reside in moving small units of data, such as a blood sugar monitor or market prices, through the air locally.
Internet of things
This is one step away from the concept of an “Internet of Things” that forms a large part of the work of BT’s chief scientist JP Rangaswami. He seems an unlikely hire for BT, having placed in the top 10 of a “Top 20 rock stars of Web 2.0” from ditto.net in 2009. Rangaswami is leading a team of around 100 who are working on a completely different idea of what a network does.
“You need to start from the philosophical position that everything is the end point on a network – your television, even your doorbell. The business that I’m in is making it easy to connect the two endpoints, either synchronously, like a phone call, or asynchronously, like a text message,” Rangaswami explains. “We are moving from a world where information was static to a flow-based view.”
The inspiration came from Silicon Valley start-up Ribbit (Rangaswami was chairman), which was acquired by BT and which is, in Rangaswami’s words: “A software-based telco. The things that used to be hardware are now software. It exposes the power of the infrastructure, when you have a set of APIs and a software development kit. It leads to a philosophy of how to build infrastructure.”
Rangaswami’s work does not dovetail with BT’s plans for its IP network (yet), but rather with another 500 or so scientists who are working on concepts such as wearable computing and the semantic web. These are far-out technologies which will realise their value when the millions of tiny messages they generate are routed to other machines, which respond without human interaction. “The telco has to be agnostic to what that device is. The telco and the IT guy both have lost control of that device,” he says.
It’s not the job of a telecoms futurist to walk in and have some ideas, then head off for a new ivory tower. “Ten or 15% of the job is getting the concepts right. Then 60% is doing it, and 25% is making sure the feedback loops are active enough. Any experiment has no value if no learning takes place from it.”
Scott Smith, founder and principal of Changeist, “a foresight, strategy and innovation lab” centred on telecoms, is also looking at the question of what the network will be asked to do, not how you build it. He is also committed to seeing his work fed back into development plans. A former telecoms analyst, Smith quit when he found clients unwilling to engage with his more far-out ideas. “I wrote a client brief in 2000 talking about how telecoms services could become lifestyle centred. Voice would become the tail of the lifestyle dog. We know that now, when Google is offeringvoice calling as an add-on to Gmail, but at the time it was one of those ‘we don’t need to know that right now’ reactions.”
By stretching his vision further into the future, Smith feels he can be more valuable to his clients. “You could argue that it’s more important in this industry than almost any other, because we can provide a bigger sense of confidence that long-term investments are being placed properly. The short term is completely different,” he says. “It’s heavily quantitative and driven by economic assumptions; these short-term measures are often complemented by ‘wishful thinking’.”
Smith’s job is the opposite of this type of optimistic speculation, narrowing the “cone of possibilities” to build tomorrow’s successful carrier. These include the possibilities that healthcare offers to a network provider – literally to wire up our bodies to provide constant information to our doctors. “AT&T is looking at an ageing population, and the effects of obesity, as much as it is looking at the calling patterns at each time of day. That’s because those changes could lead to wireless devices.”
In the developing world, Smith looks at the ways in which mobile technology has replaced a set of functions which may not have been a telecommunications problem before, such as sending money to a colleague or friend. This does not require much bandwidth, but does require a reliable application that is available to users with little education. The value in the network inexorably moves away from the network provider to the skill of the application provider. Similar issues apply to cities, which Smith sees becoming “sentient intelligent environments” where reality is augmented by contextualised information delivered to you, your car or your phone – and where information depends on the machines around you knowing who you are and what you need. This, Smith says, promises to cut waste and the cost of public services dramatically.
Linking to short-term plans
Little of this has a direct link to the shortterm plans of carriers, but making that link, Smith explains, is the practical value of the futurist. Part of his job is to “push the thinking backwards into the project they’re doing now,” to broaden it or make it more urgent. Smith considers Nordic companies accomplished at building futurism into product plans, but sees less evidence of this in the US, where thinking is more linear: “Instead of saying that we have no idea, or exactly one idea, we need the capacity to simulate strategies against a range of possible long-term outcomes.”
Michael Senchuk was a futurist working with Telus in Canada between 1989 and 2000. “It’s a struggle to get telecoms companies to look very far into the future. They know they should, but they don’t do that a lot,” he says. His time in telecoms was frustrated by a desire to protect behaviours and pricing structures “because it’s what we do”. Senchuk still keeps in touch with the telecoms business and predicts not only that the tasks telecoms companies do will become old hat in 10 years, but the category itself will vanish, just like stock jobbers or valets.
“I don’t think there will be a telecoms industry 10 years from now. There will be a distribution industry that will encompass wireline, wireless, internet and content. Futurists can help carriers find out who their competitors are, which may be companies they don’t know exist yet.”