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  • 02/11/99 7

"Winning in the race for e-business" "Winning in the race for e-business" Presentation Transcript

  • “ Winning in the race for e-business” Lecture Two - “Broadband and mobile access matter” Presentation to Sheffield University Management School MBA Students 17 February 2005 Prof. Jim Norton Senior Policy Adviser UK Institute of Directors Former Director UK Cabinet Office PIU e-Commerce team www.profjimnorton.com
  • Issues to be covered
    • Affordable broadband access is vital for e-business.
    • What do we mean by ‘affordable broadband’?
    • Affordable broadband in the UK.
    • Global affordable broadband development.
    • The future importance of mobile access.
    • Key messages
  • Why is broadband access key to e-business? Source: UK Broadband Stakeholder Forum A key mistake in early e-business adoption was to have a sales site hosted by an ISP (and thus ‘always on’) but not to have the ‘back office’ permanently online and linked in real time to the sales site…. Affordable broadband allows:
    • cost effective ‘always on’ linkage between ‘front’ and ‘back’ office systems ensuring that what is sold is genuinely in stock and can be delivered…!;
    • genuine participation by SMEs in the ‘extranets’ built around industry supply chains;
    • access by customers into the company’s core systems for design and configuration
    Broadband access reduces the asymmetries between large and small companies …
  • Broadband impact on e-business processes Source: UK Broadband Stakeholder Forum ADOPT ADAPT ABSORB
    • Speed up processes
    • Fast always-on access for e-mail and web
    • Improved communications
    • Improved productivity
    • Improved staff satisfaction
    • Reduced costs
    • Adapt processes
    • More efficient procurement
    • More flexible working
    • More e-Learning
    • Adapt sales & mktg.
    • Exploit VoIP
    • New processes
    • Address new markets
    • New business models
    • Outsource non-core functions
    • Reduce office space
    Time Benefit
  • Some results from “My Broadband”
    • A UK joint Work Foundation iSociety / BSG research project.
    • UK’s first ethnographic broadband research (as far as is known).
    • Investigating use, perceptions, experiences & drivers/barriers.
    • Understanding the place of Broadband Internet in everyday life.
    • Numerous research findings published as iSociety / BSG report.
  • Broadband isn’t just about speed… Source: UK Work Foundation - iSociety programme - James Crabtree http://www.theisociety.net
  • Broadband use is not just about speed…
    • Broadband is sold as if users only care about speed.
    • It is sold as a sprint, but experienced as a saunter.
    • But users experience it as unhurried & unpressurised.
    • Doing things ‘quickly’ on the internet is not necessarily a user objective.
    • Real fulfilment of the ‘speed’ promise depends on data heavy internet use.
    • Everyday uses of the internet … are more mundane.
    Source: UK Work Foundation - iSociety programme - James Crabtree http://www.theisociety.net
  • Broadband can be about taking it easy Source: UK Work Foundation - iSociety programme - James Crabtree http://www.theisociety.net
  • Broadband time is different
    • Dial-up “Anxious Time”
    • Watched and Counted
    • Restricts Experiences
    • Controls the internet user
    • Broadband “Timeless Time”
    • Ignored and Assumed
    • Broadens Experiences
    • Internet user is in control
    Experiences Rushed annoyance Limited utility and impractical Periodic & anxious Experiences Relaxed enjoyment Realisation of potential Smooth & reliable Vs. Source: UK Work Foundation - iSociety programme - James Crabtree http://www.theisociety.net
  • Broadband doesn’t do what it says on the tin - it is not perceived as always on… Source: UK Work Foundation - iSociety programme - James Crabtree http://www.theisociety.net
  • Broadband is not always on
    • Broadband is meant to be always-on, but for most normal users it isn’t.
    • This is because always on does not equal always there.
    • Household PCs are are switched off, shut away, out of sight, out of mind, under used, and undervalued.
    • Always on broadband must be always there: an always available resource at the centre of household life.
    Source: UK Work Foundation - iSociety programme - James Crabtree http://www.theisociety.net
  • Always On = Always There
    • Always On
    • The appropriated language of broadband marketing
    • The PC is switched off
    • A PC hidden from view: furniture or totem
    • Always on: states a fact about internet, but doesn’t encourage an increase in use
    • Always There
    • Pliant, always available
    • Accessible
    • A real household hub
    • A PC at the centre of the home: incorporated into everyday life
    • Stressing ‘always there’ encourages a different type of use
    Source: UK Work Foundation - iSociety programme - James Crabtree http://www.theisociety.net
  • Issues to be covered
    • Affordable broadband access is vital for e-business.
    • What do we mean by ‘affordable broadband’?
    • Affordable broadband in the UK.
    • Global affordable broadband development.
    • The future importance of mobile access.
    • Key messages
  • What we mean by ‘Broadband’…Speed Mass market broadband is a journey. There is no simple, single definition that holds over time: Source: UK Broadband Stakeholder Forum Stage Typical Speed Typical Application 1st Generation 256kb/s - 2Mb/s Fast Internet access 2nd Generation 2Mb/s - 5Mb/s Applic. Serv. Prov. 3rd Generation 5Mb/s - 50Mb/s Real time video Large business has had access to broadband for many years, only mass market, affordable broadband is new… Broadband services are ‘always on’ and charged simply by rental or by volume of data shipped not by connected time…
  • What we mean by ‘Broadband’…Technology Source: UK Broadband Stakeholder Forum There is no single ‘magic bullet’ technology for the provision of broadband services. Genuine pervasive provision will draw on a range of options including:
    • xDSL - delivered over the existing ‘copper’ local loop used historically for voice services. Wholesale from carriers and retail from a wide range of ISPs (512Kbits/sec to 50Mbits/sec);
    • Cable modems - enhancements to existing analogue or digital cable TV systems. Potential for up to 30Mbits/sec per home.;
    • Fixed Wireless Access - up to 8Mbits/sec and
    • Satellite - available almost universally but with a high connection/terminal equipment charge…
    Many variations of cost, speed, symmetry, contention ratio, and so on…
  • What we mean by ‘Broadband’…Platforms Source: UK Broadband Stakeholder Forum Conventional telecommunications fixed network platforms are not the only options. Alternatives include:
    • Third generation mobile services at 384 kbit/s and above ;
    • Interactive digital television with ‘return paths’ via satellite or telecommunications networks; and
    • Some five to ten years hence, ‘High Altitude Platforms’ effectively static dirigibles at 60,000 feet with an enormous coverage area.
    Wide area delivery technologies will also be complemented in homes, shops and offices by ‘local’ broadband technologies such as Wireless LANs and Bluetooth
  • Broadband access: A working definition Source: UK Broadband Stakeholder Forum - Jan 2004 “ Always on access, at work, at home, or on the move provided by a range of fixed line, wireless and satellite technologies to progressively higher bandwidths capable of supporting genuinely new and innovative interactive content, applications and services and the delivery of enhanced public services.”
  • Complementary delivery channels give Europe an advantage…. Simple screen based computer access cannot provide full population coverage. European leadership in Interactive Digital Television (iDTV) and early roll out of GPRS and 3G mobile systems provides a unique opportunity for genuinely pervasive access… UK has the highest digital TV penetration in the World Following introduction in Japan and Korea, 3G services are already in operation in Europe. 3.5G service is being trialled in the Isle of Man…
  • Issues to be covered
    • Affordable broadband access is vital for e-business.
    • What do we mean by ‘affordable broadband’?
    • Affordable broadband in the UK.
    • Global affordable broadband development.
    • The future importance of mobile access.
    • Key messages
    • 95% of households and SMEs have ADSL availability.
    • 45% of households and SMEs have cable modem availability (50% passed by constructed cable network)
    • 13% of households are in areas covered by FWA (Firstnet)
    • In total some 95% of households are covered
    UK Broadband coverage is increasing At the end of Dec 2004 the UK had 6m Broadband Internet Users (38% of the Internet access base) with 70,000 new connections being added each week.. Source: Broadband Stakeholder Forum - Jan ‘04, Ofcom Jan ‘05 and Baskerville Broadband - Oct ‘04
  • Wireless LANs taking off..
    • 420 airports;
    • 5,000 enterprise guest areas;
    • 23,500 hotels;
    • 85,500 retail locations; and
    • 30,500 community points.
    Exponential growth in hotspot locations. It is expected that, worldwide, by the end of 2005 there will be Wireless LANs operating in: Source: Gartner July 2003 Estimated hotspot users worldwide at end 2003 Total users = 9.1 Million
  • Wireless MANs for affordable broadband access
    • IEEE 802.11b/g is already being used for localised delivery (backhaul still a challenge) and in experimental mesh networks.
    • 802.16a - WiMax offers great potential as a backhaul solution but spectrum availability unclear.
    • 802.20 (pending) - active antenna technologies for portable wireless DSL (PWDSL).
    UK fixed line DSL & cable broadband coverage Q3-2003
  • UK affordable broadband users: The adoption growth curve Source: UK Ofcom Nov 04 UK has passed the “knee” in its adoption curve and is likely to continue to see dramatic growth…
  • UK affordable broadband users: Exceptional satisfaction scores… Data from NOP’s UK Broadband Internet User Profile Survey, June 2003 Source: UK Trade Association Intellect and NOP Sept ‘03 Very satisfied Quite satisfied Neither/Nor Quite/very dissatisfied
  • UK ICT Sector SMEs: Affordable broadband access satisfaction & importance Source: UK Trade Association Intellect and NOP Sept ‘03 Scale: 1 is negative and 10 is positive Mean score Importance of keeping Broadband connection Ease of integration into existing IT framework Ease of installation Effect on staff satisfaction Effect on staff productivity
  • Benefits of Broadband Connectivity UK ICT SMEs Currently, the main benefits of Broadband are on internal processes, with a smaller percentage of the base seeing external benefits Source: UK Trade Association Intellect and NOP Sept ‘03 Time saving Cost efficiencies Employee satisfaction New business Smarter working Customer satisfaction Client satisfaction
  • Effect on Business Processes - UK ICT SMEs Source: UK Trade Association Intellect and NOP Sept ‘03 Generally speeded things up We are more efficient Use Internet more, for research Increased business activity Faster communications Easier to share info Speedier business processes Staff can work remotely Speedier connection Easier data-file transfer Cost savings
  • IoD Policy Unit broadband survey
    • Policy Unit questionnaire published in June edition of IoD News and on IoD.com
    • 409 IoD members responded.
    • Small businesses dominated:
      • 56.7% has up to 9 employees;
      • 23% had 10 to 49 employees;
      • 11.5% had 50 to 249 employees; and
      • 8.1% had more than 250 employees.
    Source: Nildram/IoD October 2004
  • What quantifiable benefits are you seeing in your business use of broadband access? Base: 325 respondents who use broadband for business purposes. 84.3% of respondents cite productivity improvements from broadband access. 64% of respondents see a direct link between broadband and increased profits. Source: Nildram/IoD October 2004
  • Many respondents believe that broadband access brings very significant business benefits Better and faster R&D. Better information for decisions Can now do jobs we would not have contemplated four years ago. Couldn’t do business without it. Improved communications with/for outworkers Quick access to worldwide web with huge increase in use at low fixed monthly cost. Transforms way of working. Speed and ability to work anywhere in the World Source: Nildram/IoD October 2004
  • If your organisation uses broadband and has used the same service for a year or more, which have you seen over time? Base: 325 respondents who use broadband for business purposes . Respondents are not seeing falling service quality as more customers join… Source: Nildram/IoD October 2004
  • What measures do you take to protect your home (or home office) PC against viruses and other security threats? There are still significant vulnerabilities with 10% of respondents not using a firewall and 23% not regularly installing security updates… Base: 325 respondents who use broadband for business purposes. Source: Nildram/IoD October 2004
  • Issues to be covered
    • Affordable broadband access is vital for e-business.
    • What do we mean by ‘affordable broadband’?
    • Affordable broadband in the UK.
    • Global affordable broadband development.
    • The future importance of mobile access.
    • Key messages
  • Broadband access top 15 countries Source: ITU “The Portable Internet” Sept 2004 At the end of Dec 2004, UK had around 10%. Source: Ofcom Jan 2005
  • What is the consumer using the Internet for? A Canadian example…
    • Affluent
    • Highly educated
    • Internet penetration 45%
    • Use of Internet for High bandwidth activities:
      • games
      • music
      • e-learning
    Source: Industry Canada
  • Issues to be covered
    • Affordable broadband access is vital for e-business.
    • What do we mean by ‘affordable broadband’?
    • Affordable broadband in the UK.
    • Global affordable broadband development.
    • The future importance of mobile access.
    • Key messages
  • First assertion – Whatever starts uni-directional becomes bi-directional…
    •  19 th Century: the first UK application of telephone technology was for one way “narrowcasts” of live theatre performances;
    • 20 th Century paging gave way to the short message service (SMS); and
    • 21 st Century data traffic may well be dominated by peer to peer transfers (music, video….) rather than simple uni-directional streaming.
    History suggests that, in telecommunications, whatever we start doing as a uni-directional service we ultimate seek to use two-way….and to the broadest of bases. Source: Jim Norton - Speech to Cambridge 3G - Oct 2002
  • Second assertion – Fixed operation always leads to mobile demand…  Telegraph and telex gave way to paging and SMS;  Fixed line phones overtaken by mobile phones (As of Summer ‘04, UK business and residential fixed lines 34.31M, mobile lines: 55.03M - Source: Ofcom Oct ‘04 ) (for comparison EU mobile phone penetration is now 80%, Luxembourg 115%! - Source: FT quoting EU report 9 Nov-03 )  US Laptop/Palm computer purchases overtake desktops. (US consumers in May 2003 for the first time spent more money buying notebook computers than they did on desktop PCs, highlighting a shift to mobile computing devices that has been accelerating in the past few years - Source: FT 3 July 03. ) History suggests then that, in telecommunications, whatever we start doing through a fixed infrastructure, we will inevitably seek to do with complete mobility. Source: Jim Norton - Speech to Cambridge 3G - Oct 2002
  • Third assertion – New applications are pioneered on the fixed networks first… They have been pioneered - and the first customers trained to demand them – in the tethered world. This should not be a surprise - historically cost and capability have favoured the fixed environment – though this may be much less clear in the future…. It is seldom the case that new applications appear first in the mobile world. Whether it is:
    • that wonderful euphemism “Adult services”;
    • gambling;
    • multi user gaming;
    • health; and
    • education.
    Source: Jim Norton - Speech to Cambridge 3G - Oct 2002
  • Don’t confuse WAP with true m-business
    • “ As user friendly as a cornered WAP” - Simon Moores - The Research Group
    • WAP is excellent for short transactions:
    • when does my flight leave?
    • what is my account balance?
    • what is the share price of BT?
    • WAP is awful for:
    • general web browsing
    • shopping
    • sifting through large amounts of information.
  • How will the mobile phone change to become a true m-business device?
    • Keypad - removed in 2005 - replaced by continuous voice recognition.
    Source: A little informed speculation!
    • Screen - upgraded by end 2006 - made as large as you wish using foldable amorphous semiconductor.
    • Communications - upgrading:
      • now nationally to 28.8 kbps (HSCSD) and 40 kbps (GPRS); and
      • Now rolling out 3G to 384 kbps wide area 2 Mbps in building.
    • Processing - by end 2006 as capable as as top of the range year 2003 laptop.
    • Battery life - probably the biggest problem! Methane based micro-fuel cells by 2006/7.
  • Don’t forget the short-range mobility technologies
    • In five years time:
    • no devices will be tethered to fixed infrastructure. There will be extensive use of:
      • Bluetooth - up to 723 kbps, range 10 to 100 metres;
      • Personal Area Networks up to 480 Mbits/sec, range 1-10 metres;
      • UMTS - DECT enhancements; and
      • Wireless LANs 11 & 54 Mbits/sec.
    • there will be massive fibre capacity to the curb or building, but extensive use of radio for the last 10 metres internally and last 100 metres to 5 kilometres outside; and
    • devices will be dual standard for use both inside and outside buildings.
  • True interactivity will be a key driver of change…. Mass market broadband access could be a major catalyst for social and economic change. It may drive extensive new uses of interactivity in gaming, entertainment, education… Online gamers v online buyers Country Game Shop China 43% 16% Malaysia 29% 11% Singapore 39% 25% Korea 50% 43% HK 35% 19% India 15% 13% Source: IDC Asia-Pacific. Study of 3600 Internet users published Dec 2002
  • Issues to be covered
    • Affordable broadband access is vital for e-business.
    • What do we mean by ‘affordable broadband’?
    • Affordable broadband in the UK.
    • Global affordable broadband development.
    • The future importance of mobile access.
    • Key messages
  • Key messages….
    • Affordable broadband access, initially fixed, eventually mobile, is a key accelerator of e-Business.
    • Broadband enabled e-business often generates business benefits way beyond costs.
    • Interactivity based upon pervasive, affordable, broadband access will have profound implications.
    • UK has been a long way behind on pervasive broadband, but is now catching up.
    • New and complementary delivery channels, such as interactive digital TV and 3G mobile phones, will give the Europe a key role…
  • And remember the law of unintended consequences….
  • Questions & Answers Slides (in portable document format) available to download from: www.profjimnorton.com/shef05mba2.ppt