Future Internet Markets and Business Strategies An Analysis and a Proposal Man-Sze Li [email_address]

The Internet of Today Adapted from A Zwegers, 2008 Free email RaaS SaaS Sharing files Social & Professional networks Communication Information Content Resources Search engines Instant messaging Mobile Public Internet Satellite PSTN VPN Cable The Internet of Today Broadcast Other content-related services Business Services Virtual Worlds

All the World is Internetable and Serviceable Network Core Internet of Services Connectability Identifiability Locatability Searchability Embeddability Participatory Triggered by & trigger actions Intelligent? Authoritative? Transformative? Characteristics of Things Traceability Properties of Things Sensors, actuators, microsystems, mechatronic systems, fixed and mobile readers, PDAs and their variations, “blogjects”, smart dust ….

Understanding where we are today Content IT Communications Network / Physical Social Layer Content Layer Logical Layer Physical Layer

Remembrances of Things Past

Terminology and Concepts The “Internet” is …. A technical construct A business opportunity A social machine ? The “Future Internet” is … The Future + The Internet? Whatever is happening in the world, we can see at least fragments of that on the Internet

The “Internet” is ….

A technical construct

A business opportunity

A social machine

?

The “Future Internet” is …

The Future + The Internet?

Whatever is happening in the world, we can see at least fragments of that on the Internet

The Internet Landscape Supply (Commercial) network providers ISPs Content providers Equipment providers Service providers Demand “ Users” People in different roles Intermediary users – entities to which users belong, communicating devices and things, software-based or software-enabled services

Supply

(Commercial) network providers

ISPs

Content providers

Equipment providers

Service providers

Demand

“ Users”

People in different roles

Intermediary users – entities to which users belong, communicating devices and things, software-based or software-enabled services

“ Internet Markets” and “Internet-based Markets” Internet Technology Market(s) Markets Facilitated by Internet Technologies A flourishing technology market does not automatically create prosperity in other markets it facilitates, let alone the economy as a whole

Impact on Market Structures and Mechanisms Addition of market channel A new kind of intermediary A new form of marketplaces > a new type of market Perspective and Arguments Generative vs Tethered Appliances Ecosystems: generic technologies, partnerships, new worlds Services Universality & Utility

Addition of market channel

A new kind of intermediary

A new form of marketplaces > a new type of market

Business Strategies Intellectual property Patents and trade secrets Bundling “ A superior offering” Standards Openness, interoperability and market as arbiter Open source Collective intelligence, added value, management of development process Long tail Market niches, smaller customers, customisation, choice The power of “Free” “ 0.0 business”, race to the bottom?

Intellectual property

Patents and trade secrets

Bundling

“ A superior offering”

Standards

Openness, interoperability and market as arbiter

Open source

Collective intelligence, added value, management of development process

Long tail

Market niches, smaller customers, customisation, choice

The power of “Free”

“ 0.0 business”, race to the bottom?

A Utility-based Approach to Future Internet Markets “ Universal Service” Affordability, accessibility, availability and quality “ Right” Maximisation of utility Market efficiency vs Nobody is left behind Resources: Scarcity vs Abundance Substitution, inelastic demand, “natural” monopoly and SMP Cost of provision Utility services beyond broadband

“ Universal Service”

Affordability, accessibility, availability and quality

“ Right”

Maximisation of utility

Market efficiency vs Nobody is left behind

Resources:

Scarcity vs Abundance

Substitution, inelastic demand, “natural” monopoly and SMP

Cost of provision

Utility services beyond broadband

Interoperability Service Utility - ISU Source: Enterprise Interoperability Research Roadmap http://cordis.europa.eu/fp7/ict/enet/ei-research-roadmap_en.html Delivery of IT as services Interoperability as a utility-like capability for enterprises a public good ISU as a basic infrastructure that supports information exchange between knowledge sources, software applications and Web services a new generation of self-* services and e-business services connection between islands of interoperability especially SMEs and start-up companies ISU is independent of, rather than an extension to, EI solutions on the market Conceptual View of the ISU

Delivery of IT as services

Interoperability as a

utility-like capability for enterprises

a public good

ISU as a basic infrastructure that supports

information exchange between knowledge sources, software applications and Web services

a new generation of self-* services and e-business services

connection between islands of interoperability

especially SMEs and start-up companies

ISU is independent of, rather than an extension to, EI solutions on the market

A tentative Roadmap towards ISU (“SaaS-U”) Today’s Models (mostly fixed) Simple Increments (modify CPU/ tiered models) Hybrid (Fixed & Variable Usage) Variable Usage (Metered) Value Driven (based on function commoditisation) SaaS Subscription ISU Marginal cost > 0.0 Value based dynamic pricing Service infrastructure as utility Innovation focused Variable costs Shared resources Service oriented Fixed costs Dedicated resources Product oriented IT Plug IT Switch IT Tap

Conclusions Abundance should lead to ever increasing choice What is of value changes Old economy, new economics The future of the Internet technology business is …

Abundance should lead to ever increasing choice

What is of value changes

Old economy, new economics

The future of the Internet technology business is …