1. The State of the Internet Operating System
Tim O’Reilly
Paypal Innovate
November 3, 2009

2. Cloud Computing
“You keep using that word. I do not think it
means what you think it means.”

3. Web 2.0
“You keep using that word. I do not think it
means what you think it means.”

4. What Web 2.0 and Cloud Computing Are Really All About
We’re building an internet operating system

6. An internet operating system? You must be kidding.
 There’s no storage
 No scheduling
 No processing
 No memory
management
 ...
Bram Cohen of
BitTorrent, 1st
Web 2.0 Conference
2004

12. "The Law of Conservation
of Attractive Profits"
"When attractive profits disappear at one
stage in the value chain because a product
becomes modular and commoditized, the
opportunity to earn attractive profits with
proprietary products will usually emerge at
an adjacent stage."
-- Clayton Christensen
Author of The Innovator's Solution
In Harvard Business Review, February 2004

13. Internet Operating System
“You keep using that word. I do not think it
means what you think it means.”

14. The Internet Operating System
 Its subsystems are databases of
– People
– Places
– Things
– Prices
– Documents
– Images
– Sounds
– Relationships
– Trust metrics
– ...
 and services that help people use them
– Search
– Payment
– Matching and Recognition
– ...

15. The O’Reilly Radar Methodology
 William Gibson: “The future is here. It’s just not
evenly distributed yet.”
 We “watch the alpha geeks” and think about the
futures they are living in
 We then look for trend data that tells us that a
particular future is becoming mainstream
 I’m going to tell you some seemingly unconnected
technology stories from the front lines of
innovation. Then we’re going to connect the dots.

16. <1>

17. The smart phone plus local search. Today pizza,
Pizza Nostra, 300 De Haro
CyBelle’s Pizza, 975 Bryant
Extreme Pizza, 1062 Folsom

18. An application running on a
mobile device whose user
interface is driven by sensors:
- Touch screen
- Motion and proximity sensors
- Microphone
- GPS or cell tower triangulation

19. An application that depends on
cooperating cloud data services:
- Speech recognition
- Search
- Location

20. These cloud data services are
combined to do a job that none
of them could do alone.

24. Expect auto-translation

25. These suggest mindbending possibilities
 Expect automated speech recognition and
automated real-time translation throughout
Google products
 Google Suggest “database of intentions” gives
them an advantage in understanding what people
intend to say
 The Star Trek universal translator is within the
scope of Google’s ambition
 These products will be relatively weak at
introduction but will get better the more people
use them.
 Speech recognition and translation will be
integrated with other applications via web services
 Pretty darn cool, and definitely NOT a PC-era
operating system!

26. <2>

31. Our devices are full of sensors. New applications
are figuring out how to learn from those sensors.

33. AMEE - the world’s energy meter

35. The real world casts information shadows

36. Machine Learning not just for robots

37. Web 2.0 is about finding meaning
in user-generated data,
and turning that meaning into real-time user-
facing services. “Web Squared” takes that same
concept to real-time sensor data.

39. <3>

43. Google Maps with Street View

44. Cloud + mobile = “Augmented Reality”

46. <4>

48. Cooperating data services?
Face recognition
+
Social Network
+
Location

49. We learn by “context accumulation.”
Future applications will do so too.

50. <5>

51. The big question
 If the Internet becomes an operating system, what
is the architecture of that operating system?
One Ring to Rule Them All

52. The big question
 What is the architecture of that operating system?
Small Pieces Loosely Joined

60. The smart phone plus local search. Today pizza,
Pizza Nostra, 300 De Haro
CyBelle’s Pizza, 975 Bryant
Extreme Pizza, 1062 Folsom

61.  How cool would it
be to add pizza
ordering?

66. <6>

69. PayPal
 A first order Internet data subsystem
– 80 million active users
– 15,000 financial institutions
– 190 countries, 24 currencies
– Not just payment but identity, fraud detection, risk
management, and more
 Inherently Decentralized
– Internet endpoints call the service to get the benefit of
the networked data at the center
– P2P Payments
– Decentralized website checkout for 60% of e-commerce
 A model for the way the internet operating system
ought to work

70. Advice for PayPal

71. “API design is like sex: make one mistake and
support if for the rest of your life.”
--attributed to Josh Bloch

72. More than payment

73. You use your wallet for
 Payment
 Identification
 Loyalty cards, discount coupons
 Receipts
 Special things to keep and share
 All of these things are moving out of the physical
wallet, many of them onto the phone
 There is a huge opportunity to build innovative
new services to do these jobs.
 PayPal provides a unique back-end

74. Build services that mash up
 Speech recognition
 Location OpenStreetMap
 Social networks
 Government
 Payment

78. The Robustness Principle
“TCP implementations should follow a general
principle of robustness: be conservative in what
you do, be liberal in what you accept from others.”
--Jon Postel in RFC 761 (Transmission Control Protocol, 1980)

79. That’s how we get to this
Small Pieces Loosely Joined

80. And don’t end up here
One Ring to Rule Them All