The Next Big Thing

by Daniel H. Steinberg

Last night Bill Coleman, CEO of Cassatt and the "B" in BEA, spoke at the SDForums Distinguished Speaker series on "The Next Big Thing." Coleman set the stage by saying that for him it has never been about the technology. Instead, it is about "the innovation to apply technology to increase productivity and bring value." Coleman said that the Cassatt employeed have heard him talk many times about "the three v's: vision, value, and values." At last night's address, however, he promised to focus the discussion on productivity and value.

Productivity, in Coleman's view, is the basis for everything. It's the search for the free lunch. Perhaps you won't get more for less, but the goal is to get more return on the same investment. The two sources for this free lunch are innovation and specialization. Coleman provided examples from the agricultural, industrial, and information revolutions. Each revolution proceeds in cycles that include invention and then exploitation of that invention.

Value is the second fundamental force. Coleman explained that innovation won't be adopted unless "someone gets enough value to justify their switching cost." If you want the P.O. then what you offer "better be urgent and not just important."

One contribution of the industrial revolution was the creation of a chain of commerce where you source parts, manufacture, distribute, and then get paid. He argues that until recently "IT has contributed nothing to the GDP because it hasn't changed this chain of commerce."

Dell and WalMart are two examples of how the net allows experiments with the chain that results in changing the economics of running a business. Dell started at the endpoints with the observation that "I can touch my customers for free" and take capitol out of the equation. WalMart changed the supply chain. They also turned over the merchandising of every store to the local manager.

Coleman pointed to Amazon, ebay, and Google as examples where "the ends are in charge. These companies are leveraging unlimited free reach." Where the chain of commerce after the industrial revolution is push (we make so much stuff and push it onto the supply chain), the new model is pull.

For Coleman, "the killer app of the web is the fact that everyone can self-serve." He predicts (with the usual qualifications) that between now and 2020 we will be in the build-out phase of the web. Later this decade there will be an inflection point as service oriented architecture is adopted. Web Services is a solution he sees for calling a service from one module to another.

On the hardware side, clustering and grid computing will become more important when SOA hits. At that point he sees a need for systems that can self-configure, self-optimize, self-heal, and so on. The effect, Coleman said, is an adaptive real-time system. As with previous revolutions, he predicted that this will economically destroy what came before it. "The first to go is the technology industry" Few companies who were leaders in the past will survive. Not only will the economic order change but the political order will change as well.

Coleman's final prediction was that around 2020 the material revolution will follow the information revolution. Already we are inventing nanotechnology but not exploiting it. Biotechnology is just being exploited. Coleman said the material revolution will feature the convergence of nano and bio.

During Q and A Coleman said that "outsourcing of IT is a bad idea, but outsourcing at the low end is not." If you aren't in the server business, outsourcing your servers might make good sense. You can not, however, outsource your key productivity. He also addressed open source, saying "open source never inverts or disrupts. Itprovides continuous improvement to a stable base."

What are your thoughts on the next big thing


2004-03-20 13:06:09
There are no goo ideas, just goo questions.
Outsourcing your servers is never a goo idea.
2004-03-23 10:39:13
Not only will the economic order change but the political order will change as well.
That's a scary throw-away line.