The three C's, or C cubed...
Dawning of the information age
By Paul Taylor
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11/05/97
Financial Times
Surveys
Page 3
Copyright Financial Times Limited 1997
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The second half of the 20th century will probably be remembered for the birth of the information age -- a time of unprecedented change ushered in by the rapid advance of digital systems, based on the 'ones and zeros' of binary computer language.
Because they share a common foundation, digital technologies are sweeping away the differences between data processing and telephony, laying the foundations for the dawn of the information age, or global information society as some call it.
Digital technology has made it possible to convert text, sound, graphics and moving images into coded digital messages which can be combined, stored, manipulated and transmitted quickly, efficiently, and in large volumes over wired and wireless networks without loss of quality.
Some suggest the late 1990s will be remembered as the time when computing, communications and consumer electronics -- the 'three Cs' -- began to merge, opening the way for seamless access to multimedia information and entertainment.
This dynamic process is epitomised by the explosive growth of the Internet, widespread deployment of internal corporate intranets and an explosion of content delivery mechanisms producing what Andy Grove, Intel's chief executive, describes as "an inflexion point".
Indeed, electronic commerce and the multimedia revolution are driving the computing and telecommunications worlds into ever-closer contact, forcing two industries with different histories and cultures into competition and co-operation -- what Intel's Mr Grove calls 'co-opetition'.
"Convergence of the IT, telecoms and broadcasting industries -- made possible by developments in digital technologies -- means that many different organisations are positioning themselves to provide multimedia products and services to the home and business," confirms Ovum, the market research firm.
This is reflected in the growing number of alliances, partnerships and mergers in the IT, communications and entertainment industries. For example, three months ago Compaq Computer, the PC market leader, Microsoft, the world's largest software supplier, and Intel announced a joint initiative to work with the broadcasting and cable television industries to "realise the full potential of digital television across a range of PCs, hybrid PCTVs and digital TV appliances".
Meanwhile, networking companies, such as Cisco, 3Com and IBM, have forged links with big telecom equipment suppliers as the telecom network operators themselves struggle to come to grips with the 'new telephony' epitomised by the likes of WorldCom, which combine traditional voice telephony and IP (internet protocol) expertise.
Within the IT sector itself Microsoft, the world's biggest software company, has moved aggressively into the 'content' business through substantial investments in MSN, MSNBC and web television. And Sun Microsystems, best known for its powerful workstations, Risc microprocessors and web servers, has become an important force in the software industry through its pioneering development of Java, the 'platform independent' programming language.
The ability to manipulate digital images has breathed new life into the film and entertainment sectors -- enabling film makers such as Stephen Spielberg to bring dinosaurs to life -- while digital 3D-imaging holds out the prospect of remotely delivered medical services, virtual journeys to inhospitable environments and the transformation of remote learning and training programmes.
As Masakazu Sakisaka, in charge of sales and marketing for Seiko Epson's IT product business, says: "The barriers between information products and other industries are disappearing and new competition and new alliances are appearing." Epson, already a leader in the ink-jet printer market, is seeking to exploit its expertise in digital imaging through alliances with others in the consumer electronics and industrial markets.
Elsewhere, convergence is creating great business opportunities and challenges. For example, internet telephony and e-mail are challenging traditional telecoms business models, web television and so called internet 'push' technologies are forcing broadcasters and information suppliers to reassess their strategies and technologies such as digital broadcasting, cable modems and digital versatile disk ( DVD ) promise a revolution in delivery channels.
In the office, as Xerox, the digital document pioneer points out, everything is going digital. Desktop PCs and their portable counterparts pack the power of yesterday's mainframes, networked multifunctional digital devices -- combining the functions of printer, scanner, copier and fax -- are beginning to replace standalone machines and digital copiers and printers are delivering speed and flexibility to the in-house print shop.
Similarly, the arrival of low cost digital cameras, aimed at the consumer and professional markets, are beginning to transform the photographic industry -- an industry which generates 100bn photographic images a year in 1996 -- and enabling new forms of communication such as the photographic e-mail.
In the home, web television, smart phones and low-price computing devices herald the arrival of the digital networked home. "NCs are significant because they are part of the convergence between the TV and computer industries and also because they enable new services," notes Ovum. NCs could provide the 'bridge' between the competing aspirations of the television and computing industries.
Intel estimates that 90m PCs will be sold this year, compared with 100m televisions but, within 18 months, the US chipmaker expects PC sales to overtake the TV as the home PC becomes a consumer appliance.
Mr Grove believes that if PC sales -- and, therefore, sales of the Intel microprocessors which power most of them -- are to continue to grow, the PC will need to "win the battle for the consumer's eyeballs".
One recent study suggested that the networked and multimedia-enhanced PC might indeed be winning this battle. It found that adults in the US, between the ages of 18 and 35, who previously spent an average of four hours a night watching television, are now devoting one of those hours to the Internet.
The shift has been recognised by advertisers who, according to the Price Waterhouse 1997 Technology Forecast published earlier this year, are starting to switch their dollars to the Internet. Meanwhile, miniaturisation and the shift from analogue to digital services has transformed the mobile voice and data markets, particularly in areas such as Europe where the GSM standard has been widely adopted.
"The coming era of digital personal communications is an era of converging technologies, converging products, converging media and converging industries," says Mr Eckhard Pfeiffer, president and chief executive of Compaq Computer, the world's leading personal computer manufacturer.
If the pace of change is catching some companies off guard consider this -- it is likely to accelerate further. As Herbert Kircher managing director of IBM's German operations, notes: "The tremendous progress in base technologies, such as microprocessors, memory chips, bandwidth and magnetic/optical storage, enables unlimited network computing.
"These technologies will continue their dramatic increase in density, performance and price/performance ratio for the next decade at the same pace as in the last decade."
As digital technologies transform the nature of business, government and society, it is likely that the traditional definitions of computing devices themselves will also need to change. |
