Business Growth: The Journey Introduction
Transcript of Business Growth: The Journey Introduction
1
Business Growth: The JourneyIntroduction
BT Oracle SeminarBirmingham
16 November 2005
Prof. Jim NortonSenior Policy Adviser
UK Institute of DirectorsFormer Director UK Cabinet Office PIU e-Commerce team
www.profjimnorton.com
The second half of the chessboard
Original idea: George Gilder at the Cato-Brookings Institution conference"Regulation in the Digital Age," held in Washington D.C. on April 17-18, 1997.
2
The cost-performance of electronics doubles every18-24 months (Moore’s Law)
110
1001,000
10,000100,000
1,000,00010,000,000
100,000,0001,000,000,000
10,000,000,000
100,000,000,0001,000,000,000,000
1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Source: Analysys
33 Doublings
Moore’s Law in Action:Intel Microprocessors
Source: Intel & Silicon Image
0
5
10
15
20
25
30
35
40
45
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
M T
rans
isto
rs
4004
8008
8080 8086 80286 80386DX 80486DXPentium
Pentium II
Pentium III
Pentium 4
2T/18
3
Opto-electronics follow the same path (Moore’sLaw operates in telecoms, too)
Source: Analysys
32 Doublings
Yemi Lawal:
pp346003 opfibre &
Yemi Lawal:
pp346003 opfibre &
1980 1985 1990 1995 2000 20050
5000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
1975
Mbit/s
Gigabit Ethernet installed base growth
0
10
20
30
40
50
60
1998 1999 2000 2001 2002 2003E 2004E
GBE Ports (Installed)
Mill
ions
Source: IDC & Silicon Image
4
The cost-performance of magnetic storage doublesroughly every 18months…
110
1001,000
10,000100,000
1,000,00010,000,000
100,000,0001,000,000,000
10,000,000,000
100,000,000,0001,000,000,000,000
1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Source: Silicon Image
26 Doublings
Magnetic disk costs (3.5” platters)
020406080100120140
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
$/GB
Source: IDC & Silicon Image
5
Cooper’s law for wireless
1
100
10,000
1,000,000
100,000,000
10,000,000,000
1,000,000,000,000
100,000,000,000,000
1895 1905 1915 1925 1935 1945 1955 1965 1975 1985 1995 2005
Cooper’s Law, (after ArrayComm Chairman, Martin Cooper), states that thenumber of conversations (voice and data) conducted over a given area, in all of theuseful radio spectrum, has doubled every two and a half years for the last 105 years,ever since Marconi discovered radio in 1895
43 Doublings
Source: ArrayComm
The structure of the economy is changing
Structural demand forcommunications and
IT
Cost of basictechnologies
Cost to users Short termdemand
Source: Analysys
6
We are drowning in data….
Where is the life we have lost in living?Where is the wisdom we have lost in knowledge?Where is the knowledge we have lost in information?
T S Eliot, Choruses from ‘The Rock’, 1934
And a codicil for the 21st century…Where is the information we have lost in data?
The World produces more than 2 Exabytes (2 Billion Gigabytes)of unique information per year, more than 250 Megabytes forevery man, woman and child on earth…
Dramatic growth of broadband connections in UK
There were 8.096M broadband connections in the UK at the start ofJune 2005. Connections are still being added at more than 60,000per month
Source: UK Ofcom Communications market update Aug 2005
7
Broadband impact on e-business processes
ADOPT ADAPT ABSORB
Speed up processes• Fast always-on access
for e-mail and web
• Improvedcommunications
• Improved productivity
• Improved staffsatisfaction
• Reduced costs
Adapt processes• More efficient
procurement
• More flexible working
• More e-Learning
• Adapt sales & mktg.
• Exploit VoIP
New processes• Address new
markets
• New businessmodels
• Outsource non-corefunctions
• Reduce office space
Time
Ben
efit
Source:
UK BroadbandStakeholder Forum
What quantifiable benefits are we seeing from business use of broadband access?
84.3% of respondents cite productivity improvements from broadband access.64% of respondents see a direct link between broadband and increased profits.
84.3
61.5
33.517.5
7.1 3.1 1.80
102030405060708090
100
Prod
uctiv
ityim
prov
emen
t
Cost
sav
ings
Impr
oved
cust
omer
satis
f'n
Reve
nue
incr
ease
s
Oth
er
No b
enef
its
Don'
t kno
w
% R
espo
nden
ts
Source: UK/IoD Policy Unit survey on broadband access Oct 2004
8
Better and faster R&D. Better information fordecisions
Can now do jobs we would nothave contemplated four years
ago.
Couldn’t do business without it.
Improved communications with/foroutworkers
Quick access to worldwide web withhuge increase in use at low fixed
monthly cost.
Many respondents believe that broadband access brings very significant business benefits
Transforms way of working.
Speed and ability to workanywhere in the World
Source: UK/IoD Policy Unit survey on broadband access Oct 2004
What measures do you take to protect your home (or home office) PC against viruses and other security threats?
There are still significant vulnerabilities with 10% of respondents notusing a firewall and 23% not regularly installing security updates…
89.896.3
76.6
0.30
10
20
30
40
50
60
70
80
90
100
Firewall installed Virus checkersoftware
Suppliers'security updates
regularlyinstalled
None
% R
espo
nden
ts
Source: UK/IoD Policy Unit survey on broadband access Oct 2004
9
HG Wells’ prophetic vision of the future,The Shape of Things to Come, 1933
“It is remarkable to note how long mankind was ableto carry on without any knowledge organisationwhatever. … Nor was there any conception of theneed of a permanent system of ordered knowledge,continually revised, until the 20th century wasnearing its end. … [To those of an earlier age] ourFundamental Knowledge System … with its specialstations everywhere … would have seemedincredibly vast.”
E-Business benchmark winners 2004
Source: UK DTI Business in the Information Age:International Benchmarking Study 2004 Page 105www2.bah.com/dti2004
10
Year on year sophistication index change
Source: UK DTI Business in the Information Age: International Benchmarking Study 2004 Page 106www2.bah.com/dti2004
UK ICT sophistication index
Source: UK DTI Business in the Information Age: International Benchmarking Study 2004 Page 17www2.bah.com/dti2004
11
Some final thoughts….
E-business has not gone away! The excess of gloom on the‘downside’ was just as wrong as the earlier excess of ‘hype’.
Normal ‘Darwinian’ processes have removed from the marketthose who had wacky business plans and little common sense…
E-business is now being integrated into ‘traditional’ business,bringing major cost savings, service enhancements and newbusiness opportunities. Secure interoperability is an essentialelement of these savings and improvements…
Affordable broadband access levels the playing field betweenlarge and small business but, combined with the fallibility ofsmall office & home users, raises significant security exposures.
Remember that, in e-business, people and processes are muchmore of a challenge than technology…
Questions & Answers
Slides can be downloaded from:
www.profjimnorton.com/btoraclebrm.pdf