Moore’s Law – will it make 60?

50 years ago, engineer Gordon Moore wrote an article that has become the bedrock of computing. Moore’s Law, as first described in the article, states that the number of elements that could be fitted onto the same size piece of silicon doubles every year. It was then revised to every two years, and elements changed to transistors, but has basically held true for five decades. Essentially it means that computing power doubles every two years – and consequently gets considerably cheaper over time.

What is interesting is to look back over the last 50 years and see how completely different the IT landscape is today. Pretty much all companies that were active in the market when Moore’s Law was penned have disappeared (with IBM being a notable exception and HP staggering on). Even Intel, the company Moore co-founded, didn’t get started until after he’d written the original article. At the same time IT has moved from a centralised mainframe world, with users interacting through dumb terminals to a more distributed model of a powerful PC on every desk. Arguably, it is now is heading back to an environment where the Cloud provides the processing power and we use PCs, tablets or phones that, while powerful, cannot come close to the speed of Cloud-based servers. This centralised model works well when you have fast connectivity but doesn’t function at all when your internet connection is down, leaving you twiddling your thumbs.

Looking around and comparing a 1960’s mainframe and today’s smartphone you can see Moore’s Law in action, but how long will it continue to work for? The law’s demise has been predicted for some time, and as chips become ever smaller the processes and fabs needed to make them become more complex and therefore more expensive. This means that the costs have to be passed on somehow – at the moment high end smartphone users are happy to pay a premium for the latest, fastest model, but it is difficult to see this lasting for ever, particularly as the whizzier the processor the quicker batteries drain. The Internet of Things (IoT) will require chips with everything, but size and power constraints, and the fact that the majority of IoT sensors will not need huge processing power means that Moore’s Law isn’t necessary to build the smart environments of the future.

Desktop and laptop PCs used to be the biggest users of chips, and the largest beneficiaries of Moore’s Law, becoming increasingly powerful without the form factor having to be changed. But sales are slowing, as people turn to a combination of tablets/phones and the processing power of the Cloud. Devices such as Google Chromebooks can use lower spec chips as it uses the Cloud for the heavy lifting, thus making it cheaper. At the same time, the servers within the datacentres that are running these Cloud services aren’t as space constrained, so miniaturisation is less of a priority.

Taken together these factors probably mean that while Moore’s Law could theoretically carry on for a long time, the economics of a changing IT landscape could finish it off within the next 10 years. However, its death has been predicted many times before, so it would take a brave person to write its epitaph just yet.

Are online monopolies a good thing?

European flag outside the Commission (Photo credit: Wikipedia)

The cover story in last week’s Economist looked at the growing global dominance of internet giants such as Google and Facebook. This was partly driven by the fact that the European Parliament recently passed a resolution to more tightly regulate internet search and potentially break up Google, as well as by ongoing worries about competition and online privacy.

So are effective online monopolies (Google has 90% of the European search market for example) a good or bad thing?

Obviously in the real world monopolies are viewed with suspicion, particularly when a dominant position is then used to raise prices, unfairly squeeze competitors and generally provide a poor deal to customers. But a monopoly on its own is not enough for regulators to step in. In many niche markets (say chemicals) the investment needed to compete with a dominant incumbent would put off any new entrants, so it becomes a monopoly by default. If it doesn’t abuse its position regulators tend to just monitor the situation without taking action.

So, no-one would argue against the fact that monopolies need to be watched closely. But what is interesting is the difference between the online and offline worlds, in four key ways. Firstly, the cost of entering an internet market is relatively small – you’d don’t need to build an expensive factory, but can rely on scalable, inexpensive cloud-based servers and storage to host your business. This makes expansion easy, particularly given the widespread adoption of the internet and mobile phones across the globe, providing a proven way of connecting with customers.

The second factor that causes internet businesses to grow exponentially is the network effect. Essentially the more users on a service, such as Facebook, the better it is for everyone involved as there are more people to interact with. In turn this attracts more people in a virtuous circle. It can work the other way though – as the fate of early social networks such as MySpace show.

Thirdly, the majority of the internet services being discussed are free to consumers. So they don’t directly see any negative impact from the monopoly (such as a rise in costs). What isn’t immediately obvious to users is the price of free. Essentially their personal data is used to power advertising, direct mail and other marketing campaigns, with many consumers having a hazy understanding of what their information is being used for, or how to increase privacy settings. In fact, it is advertisers that can feel the impact of higher prices, given the online control of the internet giants.

The final difference, and one that The Economist makes much of, is the speed of change in the technology space, and how this makes today’s monopolies tomorrow’s has-beens. Companies find it hard to jump from leading one wave of innovation to competing in a new space. IBM dominated the mainframe market, but has had to reinvent itself in order to survive, while the replacement of the personal computer with tablets and smartphones has dealt a major blow to Microsoft.

However, these are still multi-billion dollar companies and have hardly withered away. Therefore in my view, technology innovation alone is not enough to regulate the internet giants. What is needed aren’t heavy handed rules, but a more measured approach that balances the needs of consumers with the speed of innovation and the potential competitive impact of monopoly positions. It is an incredibly difficult balancing act – and will require give and take from both sides if it is to succeed. Done right and new breakthrough services will be allowed to grow, but without trampling on other businesses. Get it wrong and innovation is stifled, potentially harming consumers and businesses who want to access the latest technology and services.

Sting, Simon and Sex – 20 years of the Smartphone

It seems like 1994 was a busy year – not only did it see the first ecommerce transaction (a foolish purchase of an overpriced and overrated Sting album), but also the launch of the very first smartphone. And interestingly it wasn’t produced by a traditional handset vendor, but created by IBM, thus adding to the long list of inventions, such as the PC, that it pioneered but then failed to commercialise.

English: The first smartphone “The Simon” by IBM and Bellsouth (AT&T) (Photo credit: Wikipedia)

The oddly named Simon went on sale to the US public on 16 August 1994, and had a calendar, could take notes and send emails and messages as well as make and receive calls. Aimed at the busy executive it could be linked to a fax machine in order to handle all your communication needs. However it failed to take off, only selling 50,000 units. As curator of the Science Museum’s Information Age gallery, Charlotte Connelly, drily puts its “It only had an hour’s battery, it was $899 and there was no mobile internet at the time. So it wasn’t very successful.” Personally I’m not convinced the name helped either – “Sent from my Simon” doesn’t have the same kudos as “Sent from my iPhone” at the bottom of an email.

We’re now seeing mobile and ecommerce (as opposed to Sting and Simon) converging, and driving innovation in technology. As this nifty but messy Google Public Data graphic shows, the majority of us now use smartphones as our primary method of internet access, and, aside from reading this blog, watching cute kittens and moaning on Facebook, one of our primary occupations is buying stuff. According to Goldman Sachs, global mobile commerce will hit $638 billion by 2018 – the same amount spent via PCs in 2013. While the majority will be on tablets, smartphones are an integral part of the customer journey and will make up a direct $20-30 billion of the total.

The smartphone has changed how we interact, shop and spend our free time. We are no longer ever idle – why gaze into space at the bus stop and notice the world around you when you can play Candy Crush instead? In many ways mobile technology has outstripped our capacity to adapt, leaving humans scrambling to change their behaviour to fit in with their apps, rather than the other way around. 20 per cent of young American adults (and 10 per cent of the total population) use smartphones during sex, though mercifully the research doesn’t go into any more detail than that.

So, what does this mean for startups and marketers? The smartphone is essentially our most relied upon device, and the one we keep closest to us at all times. You can link it to sensors, watches and the world around us, through Bluetooth and technology such as beacons. It really does provide a window into our lives, which has both a positive and negative impact. Speaking personally spam text messages or calls annoy me more on my mobile than their equivalents on landline or email. It is a delicate balancing act, with the consequences for misjudging privacy or security potentially extremely damaging. But get it right with your app and you can generate big profits or deliver your message right to the heart of your target markets.

The last twenty years has seen the smartphone change the world – as well as the wider device market. It has shrunk from the 500g brick sized Simon to thinner, more pocket sized smartphones (though ironically the trend is now for larger and larger devices), with increased usability and a wider range of apps aimed at consumers as well as businesses. One thing hasn’t changed though – the Simon’s battery lasted an hour, and while I get a bit longer from my iPhone, it still can’t survive a busy day without needing a recharge……..

Moving marketing into the future

Marketing is at a crossroads. The rise of digital and mobile is providing the ability to get even closer to customers and deliver experiences that meet their needs. But like every change, it can be daunting. The discipline of marketing is moving fast and that means learning new skills and techniques to reach customers. Today’s marketer has to combine being a (big) data scientist and a technologist that can create and run web, mobile and social media campaigns with the more traditional skills of understanding customers and creating compelling propositions to reach them.

Luckily of course, being marketing, there are no shortage of gurus and conferences available to advise on how marketers can make the move to embrace digital. Unfortunately many of them may be well-marketed but are short on actionable content for the majority of businesses. After all it is no point seeing what someone achieved with a multi-million pound budget when you are scrabbling around down the back of the marketing sofa for loose change to pay for your new Facebook campaign.

That’s where the forthcoming Another Marketing Conference (25 June 2013 at the Junction in Cambridge) comes in. Designed to help marketers innovate, it features inspiring speakers and a chance to network with peers in great surroundings. I attended last year’s and found it a refreshing mix of interesting presentations and discussion of the pressing issues affecting marketers at all levels. Most importantly, I’ve used lots of what I learnt last year since then – and not just as content for blog posts. I’m not alone – according to the organisers 91% of last year’s delegates would recommend it to a colleague.

This year’s speakers include:

• Rory Sutherland, Ogilvy, on multiple models of human behaviour
• Richard Murphy, Nokia, talking about reinventing the company in the digital era
• Paul Berney, Mobile Marketing Association, on reaching mobile consumers through content and context
• Peter Waggett, IBM, discussing big data
• Julie Roberts, TMW, on making marketing effective
• Dave Trott, The Gate, talking about unleashing the creative spark
• Jon Dodd, Bunnyfoot, discussing tapping into human behaviour
• Julie Strawson, Monotype, on delivering a seamless consumer experience across multiple touchpoints

There are a lot of marketing conferences looking to advise people on what to do next. From my experience last year, Another Marketing Conference is well worth checking out, whatever sector or size of business you are in.

Psychology, marketing and Twitter

Everyone is bombarded with marketing messages – from the moment you switch on the TV or radio in the morning to emails with the latest offers, posters by the side of the road and adverts on the internet.

The trouble is, as every marketer knows, even the most targeted consumer campaign has a lot of waste. Only 3% of unsolicited postal marketing leads to a sale and online conversion rates hover well under fractions of per cent. Not only is this expensive from a company point of view, but it also risks alienating consumers who object to being spammed with things that simply don’t interest them at that point in time.

And all of this is despite the fact that companies now hold massive amounts of data on our buying habits and can easily access our demographic profiles that we’ve provided to loyalty schemes or just posted up on the likes of Facebook.

According to researchers from IBM, the problem is that studying demographics and buying habits is a deeply flawed method. Just because you live in the same area as another 40-something bloke and earn around the same doesn’t mean you have the same interests. What is needed, according to the IBM team at the Almaden Research Centre, is to discover the deep psychological profiles of customers, including their personalities, values and needs.

There are five dimensions of personality recognised by modern psychology:

• Extroversion
• Agreeableness
• Conscientiousness
• Neuroticism
• Openness to experience

Research has already shown that these traits link to buying behaviour. Agreeable people prefer Pepsi to Coke and if you link your product messages to excitement and adventure, it will appeal to the extroverts.

All well and good, but how can brands find out the psychological profiles of their potential customers? After all, no-one is going to go through a long personality test to give marketers the information they need to harass them.

The answer is via social media, specifically Twitter. IBM’s research has used software to analyse three months data from 90m Twitter users, matching the words people use against their values and needs. It took just 50 tweets to get a reasonable match for their personality and a very good fit from 200.

The moral of this story? As I’ve said many times, you are what you tweet. And as Sally Bercow’s court case has shown, it isn’t just words, but how they are interpreted, that define you. So be careful what you say, and if you want to put advertisers off the scent throw in a few random comments to confuse the targeting software…………..

 

Related articles

• How can Twitter reveal your personality? (economist.com)

2011 Tech Unpredictions

Image via Wikipedia

As well as ill-thought out resolutions, January traditionally brings a slew of predictions for the year ahead. Rather than join the tech soothsayers, here’s my view on the five things that won’t happen in 2011 – but would be amusing if they did………

Queen joins ChatRoulette
Following on from her successful debut on Facebook, Queen Elizabeth pushes the social media envelope by moving onto Chat Roulette to meet her subjects. After encounters with a naked student, guitar-strumming Americans and an OAP that looks suspiciously like Prince Philip she abandons the site as being too close to reality.

Google buys Belgium
In a bid to outflank its competitors and to stop the EU investigation into its business practices, Google buys Belgium for a mixture of cash and shares. Very few people outside the country notice. Facebook use is immediately banned and everyone forced to switch to Gmail and Google Docs from Microsoft Office. It could be worse – at least they don’t have to use Wave.

Steve Jobs launches iClock
Seeing a market opportunity after the iPhone alarm clock storm in a tea cup (how exactly did that make the BBC News at Ten?) Steve Jobs launches the iClock. Stephen Fry buys twelve. A snip at $499, it promises a completely new timekeeping experience with downloadable apps available via iTunes. However in a launch glitch the alarm function only works on Pacific Standard Time, now renamed Apple Time and patented by the company.

Government abandons technology
The combination of shrinking budgets and rising unemployment means it is cheaper for the Conservative/Lib Dem coalition to swap manual processes for technology. Tin cans connected with string replace desk phones and flocks of carrier pigeons carry documents instead of email. Young people are trained to read barcodes to process incoming forms as an alternative to mainframe computers. Productivity rises.

Met Office joins the Cloud
In an innovative public/private sector partnership the Met Office and IBM launch a new cloud computing service. Utilising real clouds to store and transport data, satellite based technology downloads information as and when needed across the UK. Difficulties arise when the country swelters through its warmest year since records began, with high temperatures and cloudless skies from May to October. Well, you can but hope………..

Related articles

• Predictions for Apple in 2011 (cultofmac.com)
• Steve Jobs’ New Year’s Resolutions for 2011 (macstories.net)