Collaborative Knowledge Networks Market Assessment

Collaborative Knowledge Networks Market Assessment February 2007 Don Johnson Network Strategies [email_address]

Strategic Perspectives Match the strategist with the strategy By failing to prepare you are preparing to fail In strategy it is important to see distant things as if they were close and take a distanced view of close things Strategy without tactics is the slowest route to victory Tactics without strategy is the noise before defeat Strategy … we don’t need no stinking strategy Musashi Franklin Tzu Caveman

Why is Strategy Important? January 25 2007 Ford Motor Co. posted a net loss of $12.7 billion, or $6.79 a share in 2006 - the worst loss in the company's 103-year history Declining sales of SUVs played a key role in the company’s decline - as evidenced by the free-fall of sales revenue in North America Sales plummeted $11.2 billion from $80.6 billion in 2005 to $69.4 billion Closing 16 plants and eliminating 44,000 jobs Ford took out more than $25 billion in loans as collateral The money was desperately needed to survive through 2009 Ford posts worst loss in its history: $12.7 billion

Some Key Definitions Groupware: Programs that help people work together collectively while located remotely from each other. Services can include the sharing of calendars, collective writing, e-mail handling, shared database access, electronic meetings with each person able to see and display information to others, and other activities. Also called collaborative software, groupware is an integral component of a field of study known as Computer-Supported Cooperative Work . Online Collaboration: Any process that allows two or more people in different locations to cooperate on a task. It includes any form of real-time communication, including telephone and Web Conferencing, info rmati on-sharing tools such as the many "groupware” packages, and tools to help locate people, see if they are available, and engage them in solving a problem Collaborate: To work jointly with others especially in an intellectual endeavor

Some Key Definitions Integrated Collaborative Environments : Provide a framework for electronic collaboration within an organization, based on shared directory and messaging platforms. The core integrated-functionality areas are email, group calendaring and scheduling, shared folders/databases, threaded discussions, and custom application development. Representative products in this market include HandySoft BizFlow Groupware, IBM Lotus Notes/Domino, Microsoft Exchange/Outlook, and Novell GroupWise Collaboratory: More that an elaborate collection of information and communications technologies; a collaboratory is a new networked organizational form that also includes social processes; collaboration techniques; formal and informal communication; and agreement on norms, principles, values, and rules

Some Key Concepts From 1992 to 2000 budgets for research and development of collaboratories ranged from $500K to >$10M and the total use ranged from 17 to 215 users per collaboratory Higher costs occurred when software packages were not available for direct integration into the collaboratory or when requirements / expectations were not met Today, however, such tools are available in off-the-shelf software packages such as MS NetMeeting, IBM Lotus SameTime, and Mbone Videoconferencing Collaboratories can now move beyond general communication mechanisms to evaluating and supporting the very nature of collaboration in the scientific context The collaboratory design team defined the requirements as follows: Ability share graphical data easily Ability to discuss modeling strategies and exchange model descriptions Archiving collaborative information Ability to run dynamic models at widely separated locations Ability to analyze experimental data and modeling results in a web-accessible format Videoconferencing and group meetings capabilities Collaboration technology readiness requires a considerable investment in training

COIN’s form from the interaction of like-minded self motivated individuals with a common vision who want to be part of the innovation that will change the world Dissemination of new ideas is very similar to the ripple when a pebble drops into water Innovations ripple from the innermost COIN circle to the next larger CLN circle then to the CIN circle, until they reach the rest of the world COIN’s are cyber-teams of self-motivated people with a collective vision, enabled by the Web to collaborate in achieving a common goal by sharing ideas, information and work CLN’s comprise people who come together in a community and share not only a common interest but also common knowledge and a common practice CIN’s comprise people who share common interests but do little work together in a virtual team This whole ecosystem (COIN, CLN and CIN) is called a Collaborative Knowledge Network Some Key Concepts Collaborative Information Network Collaborative Learning Network Collaborative Innovation Network

Future Trends Future Survey - 2004 The human population is projected to grow from 6.4B in 2004 to 7.9B in 2025 In the next 10-15 years the US workforce will grow at a much slower rate with greater participation by the elderly, disabled and women with children The concept of retirement is outdated and should be replaced with a more flexible approach that serves both employer and employee The past was characterized by 80% continuities, 15% cycles, and 5% novelties – the figures are reversed in the future with 80% novel, 15% cyclical, and 5% continuous Democratizing redesign of neighborhoods, transport, commercial corridors, historic districts, parks, and public spaces will produce a more livable urban environment Pervasive computing and documentation will make all things transparent in public and private enterprises, with total transparency becoming international law in 15-20 years Al Qaeda is involved in a long-term strategy that might stretch over half a century Eradicating disconnectedness in the global economy is the defining security task of our age - expanding connectivity increases peace and prosperity worldwide

Future Trends Network-Centric Warfare Network-centric warfare (NCW), commonly called network-centric operations (NCO) is a new military doctrine or theory of war pioneered by DoD NCW seeks to translate an information advantage into a competitive war-fighting advantage through the robust networking of geographically dispersed forces and new forms of organizational behavior The physical domain is perceived by sensors and individuals - data is transmitted through an information domain and subsequently acted upon by a cognitive domain NCW utilizes information technology via a robust network to allow increased information sharing, collaboration, and shared situational awareness, which, allows greater self-synchronization, speed of command, and mission effectiveness Power to the Edge suggests that modern military environments are far too complex to be understood by any one individual, organization, or even military service Modern information technology permits the rapid and effective sharing of information to such a degree that “edge entities” are able to pull information from ubiquitous repositories, rather than having centralized agencies push it to them

Future Trends “ War and Anti-War” - Alvin and Heidi Toffler In the transition from "brute-force" to "brain force" economies we necessarily invent "brain-force" war Geo-economic reasoning is inadequate, because it overlooks the growing role of knowledge which is now the core resource of economies and military effectiveness The success of Third Wave firms (and militaries) increasingly depends upon their capacity for acquiring, generating, distributing, and applying knowledge strategically and operationally The supremacy of the West is not so much due to its military hardware as to the fact that its military bases are laboratories and its troops are brains - armies of researchers and engineers Four functional components of a knowledge strategy would be acquisition, processing, distributing, and protecting information, while selectively denying or distributing it to one's adversaries or allies The ultimate strength of a Third Wave military rests on the strength of the civil order it serves, which in turn increasingly depends on the societies own knowledge strategy

Future Trends “ New Rules for the New Economy” - Kevin Kelly The grand irony of our times is that the era of computers is over We are now engaged in a grand scheme to augment, amplify, enhance, and extend the relationships and communications between all beings and all objects Wealth in this new regime flows directly from innovation, not optimization; that is, wealth is not gained by perfecting the known, but by imperfectly seizing the unknown The ideal environment for cultivating the unknown is to nurture the supreme agility and nimbleness of networks The Network Economy is fed by the deep resonance of two stellar bangs: the collapsing microcosm of chips and the exploding telecosm of connections The prime law of networking is known as the “ law of increasing returns” Value explodes with membership, and the value explosion sucks in more members, compounding the result The dynamics of networks will continue to displace the old economic dynamics until networks behavior becomes the entire economy

Future Trends How Information and Communications Technology Is Transforming Economic Development - 1 Economic competitiveness depends on the ability to transform vast quantities of information into usable knowledge and deploy it effectively across organizations, market ecosystems and economies This is why knowledge management is so crucial to the development of emerging markets: the effective deployment of knowledge derived from information can greatly accelerate their economic growth and competitiveness A 2005 study found that from 2001 to 2004 the US ICT industry increased its contribution to GDP 3 times faster than other goods & service-producing industries In 2004 those goods & service-producing industries raised their real value-added by 3.1% and 5.1% respectively while the ICT group saw a 14.7% increase in 2005 information technology accounted for 7.9 million jobs in Europe, 1.9 million in Latin America, and 3.3 million in Asia/Pacific Between now and 2009, those three regions combined are expected to see total IT spending rise from $437 billion to $562 billion— equivalent to 2.7% of combined GDP . This will result in more than 3 million additional IT jobs, and generate some $190 billion in new tax revenues for the three regions’ 51 governments

Building on the work of Robert Solow in the 50s economists have repeatedly found innovation to be the most powerful factor driving a country’s growth rate In the US an estimated 30- 40% of the gains in productivity & growth achieved during the 20th century were attributable to innovation in its various forms One of the most detailed assessments of how ideas and innovation impact modern economies is to be found in a 2004 study by the U.S. Federal Reserve Board. The authors found U.S. businesses invest more than $1 trillion a year in knowledge capital and in the 1990s this investment grew faster than all other business spending The study also found that more than 80% of the growth in U.S. productivity in the late 1990s was attributable to the development and application of new ideas , with the development of and investment in ICT alone accounting for just over 60% Future Trends How Information And Communications Technology Is Transforming Economic Development - 2

Future Trends Advancing Knowledge and the Knowledge Economy The generation of knowledge is increasingly a product of networked entities Technology, market conditions and institutions continually transform Knowledge Knowledge flows across sectors to take advantage of joint costs & benefits The opportunity exists to integrate the Nation's investments in high performance networking, supercomputing, virtual observatories and laboratories, middleware, and large-scale databases into interoperable knowledge environments Firms located in geographically bounded knowledge-rich environments realize higher rates of innovation and increased entrepreneurial activity due to the localized nature of knowledge creation and deployment Knowledge gets converted into useful form via design . In order to affect the world and be valued, a design / idea must be made into something. This requires human effort and human organization

Future Trends Knowledge and Distributed Intelligence - Circa 1999 Imagine a new century, full of promise, molded by science, shaped by technology, powered by knowledge (Bill Clinton) NSF is investing in an ambitious effort called Knowledge and Distributed Intelligence The KDI objective is to create networked systems that can make all kinds of knowledge available to anyone, located anywhere, at any time Knowledge Networking research is developing more effective ways of creating, collecting and organizing information to glean useful human knowledge KN activities include creating Internet-based collaboratories that enable multidisciplinary teams participating from their home laboratories, offices KDI research is expected to accelerate our ability to model and simulate complex, multi-scale systems , such as the oceans or the brain and improve our ability to understand, predict, and control complex systems at a level never before possible

Future Trends Education Map of the Decade (1) Public education in the United States is at a critical crossroads The knowledge economy challenges the basic industrial-era assumptions upon which most public schools, curriculum, and evaluation mechanisms are based New interactive digital media is diffusing rapidly fostering a youth culture that is crashing into schools like a tsunami, raising privacy, relevance, and equity issues Student performance is inconsistent and lags behind other countries As the barriers between physical and digital spaces come down, people will move seamlessly between digital game spaces and urban neighborhoods For learning this means that the cooperative, critical-thinking and problem-solving practices encouraged in digital games make serious games a key form of pedagogy Ubiquitous computing and wireless connectivity will turn physical places into aware contexts - environments that recognize people, information, and activities Sensor-based technologies will also be used to monitor and manage the complex interacting environments of daily life including homes, workplaces, and schools

Future Trends Education Map of the Decade (2) Geo-coded data will be linked through the Internet and accessible through a variety of mobile tools from cell phones and PDAs to augmented-reality devices, e.g., eyeglasses Governor Rendell (Pa) announced a $20M initiative under the state's Classrooms of the Future program to provide every high school classrooms with laptops, Smart-boards, projectors, Web cams and other video cameras Experiences of Gen Y and Z with IM, video chat, gaming and multiple digital worlds will create new modes of work, socializing, and community learning that will drive cooperative strategies, experimentation, and parallel development An emerging set of cooperative technologies will facilitate network building, transparency, and aggregation of distributed resources - greatly expanding our capacity to cooperate in the creation of broader social value Convergence of networks and cooperative strategies sets the stage for new business models that function as platforms for value creation among distributed knowledge workers, innovative users, and customers Like EBay, schools will become open platforms for development of innovative and diverse learning models

Current and Future Trends YouTube bought by Google for $1.3B October 2006 - Google Inc. announced today that it has agreed to acquire YouTube the consumer media company for people to watch and share original videos through a Web experience, for $1.65B in a stock-for-stock transaction The price for YouTube is what Target paid for 257 Mervyns department stores and 4 distribution centers in 13 states January 17, 2007 - Apple reported a 78 percent jump in its quarterly profit to a record above one billion dollars as its iPod music players flew off the shelves in the year-end holiday season. With sales of over 21 million iPods, Apple posted record revenue of $7.1 billion.

New video widgets with the ability to post webcam videos to social networks are the latest trend for myspace live webcam widget , from the live chat site ANYwebcam is designed for live streaming Just turn on the webcam, and your face is broadcast live from your MySpace page or blog They claim to have a “proprietary hub-and-spake technology” that avoids the limitations of the peer-to-peer distribution model used by MSN, Yahoo and Stickam, where image quality and speed suffer in direct proportion to the number of people viewing the broadcast - It’s Flash-based and provides a variety of styles The Twango webcam widget is slightly different, since it focuses on pre-recorded messages rather than live streams and it has the extra ability to accept video comments from others You can embed the widget on hi5 , MySpace , Piczo , Facebook and send links to the clips via email or IM You don’t need to be a Twango user to grab the widget, but if you are, you get the ability to manage your comments and save your videos to your Twango account Current and Future Trends Ubiquitous Video Streaming

Augmented Reality (AR) research is concerned with the use of live video imagery augmented by the addition of computer generated graphics Advanced research includes the use of motion tracking data, facial marker recognition using machine vision, and the construction of controlled environments containing any number of sensors and actuators The interactive is no longer simply a face-to-screen exchange it extends into surrounding space and objects The use of GPS and orientation sensors allow for backpack computing systems to take AR outdoors. An augmented reality system as one that: Combines real and virtual Is interactive in real time Is registered in 3D Current and Future Trends Augmented Reality

ESRI has been giving people around the world the power to think and plan geographically ESRI software is used in more than 300,000 organizations worldwide including each of the 200 largest cities in the United States, most national governments, more than two-thirds of Fortune 500 companies and more than 5,000 colleges and universities ESRI applications running on more than one million desktops and thousands of Web and enterprise servers, provide the backbone for the world’s mapping and spatial analysis ESRI provides complete technical solutions for desktop, mobile, server, and Internet platforms Vehicle locations Weather information Roads - Infrastructure Land use - Land cover Raster imagery Environment Base – maps Environmental Systems Research Institute, Inc., Current and Future Trends Ubiquitous Geo-Spatial Zoom

Current and Future Trends Second Life - 2,922,814 Cyber-citizens Second Life is a 3D digital world imagined created and owned by its Residents The interface and display are similar to most popular massively multiplayer online role playing games there are 2 key differences: Second Life provides near unlimited freedom to its Residents This world is whatever you make it and your experience is what you want out of it. Residents can obtain their first Basic account for FREE Additional Basic accounts cost a one-time flat fee of just $9.95 If you choose to own land to live, work and build on, you pay a monthly lease fee based on the amount of land you own You own IP for all your in-world creations

Telepresence is the experience of being fully present at a live real world location remote from one's own physical location Someone experiencing telepresence would therefore be able to behave, and receive stimuli as though at the remote site Presence is not just about the illusion of being there, but also about how the simulation of future, past, or imaginary space can sharpen the mind’s performance When designers push the outer limits, possibly the designers are looking for something that is to psychology what the cyclotron is to physics, a presence machine – a technology that accelerates, reveals, and probes the essence of reality Current and Future Trends Being There - Anywhere

Assessing the Market Collaborative Knowledge Network (CKN) - Products and Services National Global 1 2 3 Regional

The Global Knowledge Economy World Bank Knowledge Assessment Methodology $10-$15B The World Bank is striving to eliminate poverty and build a climate for investment, jobs and sustainable growth in developing countries. The Knowledge Assessment Methodology (KAM) is an interactive benchmarking tool to help countries identify the challenges and opportunities they face in making the transition to the knowledge-based economy such as entrepreneurship and innovation, research and development, software and design, and education and skills levels Each year the World Bank provides about $10-$15B in investment funds to the developing countries for goods, construction, and consulting services needed to transition to the knowledge-based economy. 1

Global Market Forecast Online Collaborative Market to reach $2.9B by 2011 Frost & Sullivan has just released its latest web conferencing research, and the growing ground swell of demand for online collaboration will continue to fuel growth in the global market. Valued at $725M in 2005, we forecast the market will reach $2.9B in 2011 1 .

Current and Future Trends Online Advertising $80B Companies pay $2.5M for a 30 sec Super Bowl ad to get the attention of the nation The latest craze is the use ads made by ordinary folks instead of glitzy, expensive ads Doritos Crash the Super Bowl contest will pay $10K for a 30-sec spot that cost $12 User-generated content is from amateurs who create home-made video for the Web The line between TV and Internet TV is about to disappear YouTube is exploding faster than anything else: > 100 million video-streams a day Focusing on the advertisement market space is BIG money for technology providers Online content is at a major inflection point – triggered by the web social networking phenomenon and free advertising-supported video Web analytics in a digital environment lends itself to greater multinational targeting, geo-targeting, demographic targeting, and behavioral targeting Estimates are that Internet advertising will reach $82B by 2011 with an average annual growth of at least 21% U.S. online advertising could reach $43B by 2011 1

Global Market Forecast Video Game Market to reach $43B by 2011 DFC Intelligence forecasts of Global video game and interactive entertainment market: Grow from about $29B in 2005 to around $43B by 2011 124 million PC Gamers in the US 14% of kids under 3 years old played video games 29 million gamers in China in 2004, growing to 55 million in 2009 63 million gamers in the Philippines by 2008 Asian Pacific online gaming market to reach $3.6B by 2010 37% of gamers now online 40% of Americans buy computer games 44 million portable gaming devices with network connections in 2006 61% of kids play a video game every day Average MMORG gamer spends 20 to 25 hours a week on game Online gaming subscriptions generated $936M in 2005 – to top $3.9B in 2009 Virtual goods for MMORG are $880M industry 1

Federal & State IT Markets ~ $120B by 2011 2 2007 Federal Information Technology Budget - $64B Input predicts that IT spending in state and local government will reach more than $60 billion in 2008 and about $73 billion in 2011. Of that $50 billion will be contracted to the private sector in 2008, $62 billion in 2011. Two areas that will carry significant opportunity for the channel are public safety, which Input predicts will grow 12 percent to $3.4 billion in the next five years, and health care, which is expected to grow 10 percent in that same time frame, from $7.6 billion to $12.2 billion. The most significant sector growth will happen in telecommunications (from 19 percent of the budget in 2006 to 23 percent in 2011) and services (from 23 percent in 2006 to 30 percent in 2011). Software products will stay at about 9 percent of the total IT budget, while computer hardware is expected to drop from 16 percent to 14 percent. 2008 State Information Technology Budget - $60B

2 US Learning Technology Market $52B by 2012 Ambient Insight 2006 Outsourcing Business Process Training $3B Outsourcing Business Process Training $24B Learning Technology $17B Instructor Led Training in Classroom $974B Instructor Led Training in Classroom $878B Total 2006 Market = $994B Total 2011 Market = $954B Learning Technology $52B

US eLearning Market Forecast $13B in 2011 US eLearning Market Tops $10 Billion in 2006 The market for e-Learning will grow by 31% from 2006 to 2011 The revenues for outsourced services are growing by 80.2% on strong demand for content targeted to specific sectors The largest revenue opportunity for suppliers throughout the forecast period is the demand for non-IT packaged content - demand is growing by a five-year CAGR of 32% The second largest revenue opportunity will be for custom content and technology services - demand is growing by a five-year CAGR of 78% Today the largest buyers are still the corporations and federal government but by 2011 the higher education segment will be the largest The fastest growing market is the PreK-12 academic segment followed closely by higher education, associations, and healthcare There is continued erosion of IT-based packaged content revenues due to increase of other products types particularly real-time collaboration-based learning There is a new and growing demand for installed learning appliances in the state and local government, higher education, and very small business markets 2

US Wireless Medical Technologies Market $12B by 2011 The medical sector is poised for an ICT revolution with wireless technologies transforming the way health information is captured, stored and delivered A spiral increase in spending is being driven by a shortage of nurses, increasing demand for improvement in quality of care, pressures to reduce medical cost and increasing population of the aged; and government regulations such as the HIPAA The wireless network technologies being used in medical environments are ZigBee, Bluetooth, Infrared, UWB, Wi-Fi, WiMAX and Cellular Existing medical technologies that utilize wireless technologies are remote monitoring systems, point-of-care systems, data management systems, home medical equipments and radio frequency identification (RFID) The market for wireless medical technologies is in a nascent stage and is estimated at about $3.7 billion in It will grow over the next four to five year period to $10.7 billion in 2010 2

National Market by 2011 CKN related Products and Services > $230B Online Advertising Market $43B Video Game Market $43B eMedicine Market $10B eLearning Market $8B Collaborative Knowledge Environments Federal IT Market $64B DHS Eagle $6B State IT Market $60B

For inquiries regarding Strategic Consulting Services Contact Don Johnson at [email_address]

Collaborative Knowledge Networks Market Assessment

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Collaborative Knowledge Networks Market Assessment