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February 16, 2005

Bit Economy Versus Experience Economy and the Future of Information and Communication Technology on Campus

Greg Papadopoulos, Sun Microsystems' Chief Technology Officer is a man with a mission. Yesterday, Greg was the keynote at Sun's 2005 Worldwide Education and Research Conference.

Greg's thesis is that there is an inevitable, ineluctable, economic engine driving a major paradigm shift in the information and communications technology space. At the level of technical architecture Greg sees the network maturing and delivering robust, highly available connectivity catalyzing a change in the way we think about personal computing and the computer. As computing requirements become more like a utility Sun's vision is that just like oil fields with complex oil refinery backend infrastructure allow drivers to pump gas without their own oil wells, just like utility power generators allow us to plug in our toasters without a power grid in our back yards, so too will we move to a model in computing. Sophisticated grid and/or computing infrastructure, driven by concerns around security and reliability and the incessant demands of the market to drive out of costs will inevitably lead to a transformation of the personal computing environment. Sun's next generation stateless thin client solution known as the Sun Ray 170 Ultra Thin Client is a glimpse into the future. At least, according to Greg Papadopoulos. Think Google. According to Greg, Google is a working example of what he has in mind for the entire ICT space. Huge backend infrastructure powered by hundreds of thousands of servers that are essentially invisible to the user, a simple web browser and powerful search software. Why not the desktop and office productivity tools?

Papadopoulos went on to suggest that according to "Greg's Law" the logic of the "Bit" economy, that is, the pounding demand of the market place to drive out costs and reduce the cost per bit of any product or service will lead us to only one conclusion. The cost per bit of maintaining an "outmoded" solution like shrinkwrap software that costs pennies per bit to develop, distribute and consume as opposed to a networked (ala Google) solution which costs a tiny fraction of a penny per bit. What keeps Papadopoulos up at night is figuring out how to take this economic reasoning or what he calls the "Bit Economy" and develop an integrated technology strategy to develop the sophisticated powergird or oil refinery version backend infrastructure to drive this transformation.

In a panel following Greg's keynote on the "future of the digital campus" I tried to point out that the drive to develop a corporate strategy on the back of the bit economy was not only a form of economic reductionism, but more importantly it missed a much more important driver on the University campus and that is the experience economy. I think Sun is coming to a very interesting point in its corporate culture. Think again about Google. Google as a brand and as a product offering is selling an experience to almost every kind of user. No one thinks of Google as a hundreds of thousands of servers and sophisticated software. Sun needs to be very very careful in its corporate strategy because, IMHO, it is on track to becoming the company that says "your experience, powered by Sun bits". It's like the commercial on television "we don't make the products you use, we make them better." If this is indeed Sun's strategy, Sun will continue to become marginalized as a product brand. How many of us know the name of the company that manufactures oil drilling equipment or the materials for the powergrid? Sun needs to be mindful that in the 21st century networked economy, we do not have too many success stories in the "powered" by corporate strategy (Intel, being one very notable exception).

On the University Campus the logic of the bit economy continues to be a hard sell. Whether it is our university presidents our alumni, our students, or faculty colleagues or most of our staff, bits need to work. Period. This does not mean it is easy. To be clear, the technologists need to be able to execute, especially as expectations continue to rise. What is of vital importance on the campus is the experience economy. It's about the experience of integrating visualization tools into learning environments. It is about extending our wireless infrastructures into meaningful mobile learning and playing environments. When we have students and faculty creating learning games (called simulations or otherwise), that is an experience. Interactive video conferencing on demand, now that's an experience. When we enable the build out of immersive virtual reality theaters to allow students and faculty to travel back in time or through the galaxy or fly through the human body, that is the experience economy at play. When we build out social computing infrastructure that fosters collaboration we are on the road to helping the learner (whether student or faculty) transform themselves.

To be sure there is a need for balance in our approach. I would, however maintain that innovation on campus can no longer be characterized by the stuff in the machine room, the electronics in the closet or the fiber in the conduit. Hardware, identity management schemas and portals are all platforms for experience and innovation. But none of these are about the experience itself.

I think we need Sun Microsystems and the handful of remaining innovators in the information and communication technology world to keep their vision and strategy fixed on creating the experience and let the invisible hand of the marketplace do its thing without it hijacking the corporate strategy and pushing technologists back to the plumbing department.

More tomomrrow from San Francisco.

Posted by lsg8 at February 16, 2005 09:45 AM

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