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TABLE OFCONTENTS

Foreword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

Five Premises for the Future. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Axes of Uncertainty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

The Scenario Framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

FLUID FRONTIERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

INSECURE GROWTH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

SHORT OF THE PROMISE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

BURSTING AT THE SEAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Using the Scenarios and Exploring Their Implications. . . . . . . . . 31

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Acknowledgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Appendix 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

INTERVIEWS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Appendix 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

AXES OF UNCERTAINTY AND DRIVERS OF CHANGE. . . . . . . . . . . . . . . . . . . . 44


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Its 2025. Imagine that the Internet has under-

pinned a new wave o global prosperity. It is now

as central to the lives and opportunities o peo-

ple in the outskirts o Mexico City and rural Sri

Lanka as it is to people in okyo, New York, and

London. Myriad new applications cater to most

o the worlds population and to businesses o all

sizes and shapes.

Or maybe not.

Maybe the Internet has become a victim o its

own success, with the explosion o Internet

products and services now a source o rustra-

tion as much as satisaction and networks over-

burdened and unreliable in many parts o the

world. Or maybe the Internet has hit a wall, so

plagued by hackers and cyber attacks that its

given rise to a new digital divide between those

with access to expensive security measures in

gated Internet enclaves and those who tread

warily across the ree but dangerous Internet.

Or maybe prolonged economic stagnation and

protectionist policies have drastically dampened

demand or new devices and eroded peoples

willingness to pay or applications and services.

All o these worlds are plausible. All o them

could happen. Are you prepared?

oday, in 2010, the Internet is already an integral

part o existence in many parts o the world. Its

easy to orget the incomparably large strides that

the Internet has made since the rst email mes-

sages were sent over the ARPAnet in 1970, and

the massive changes it has triggered in how we

live and work. Yet despite its explosive growth,

especially in the last 15 years, the Internet is still

in its youth, maybe even its inancy: only one-

third o the worlds population has ever sured

online (almost 5 billion people havent) and ewer

than one-fh o those who use the Internet doso regularly.

Just as the architects o the ARPAnet never

anticipated the Internet o today, its equally

hard or us to predict the Internets evolution

its uture and its impact. Tat billions more

people are poised to come online in the emerg-

ing economies seems certain. Yet much remains

uncertain: rom who will have access, how,

when, and at what price to the Internets role

as an engine or innovation and the creation ocommercial, social, and human value. As users,

industry players, and policymakers, the inter-

play o decisions that we make today and in the

near uture will determine the evolution o the

Internet and the shape it takes by 2025, in both

intended and unintended ways.

Hence the need or scenariosa set o diver-

gent stories about the utureto help us explore

and prepare or possible utures o the Internet.

o make sure that our scenarios are both rele-

vant and logically related, weve organized this

inquiry around two related questions:

INTRODUCTION

What forces will shape

the Internet between now and 2025?

How might the use of the Internet and IP networks

(particularly with regard to emerging countries) evolve?

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DRIVINGFORCES,UNCERTAINTIES,ANDFOURSCENARIOSTO

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For purposes o this report, we look at the Inter-

net broadly, rom both the mechanical and value

creation perspectives. echnically, the Internet

can be thought o as a mesh o digital impres-

sions, storage systems, ber, radio requencies,

transmissions, switches, screens, and terminals.

But it is the complex array o relationships across

technologies, applications, players, and policies

that denes the Internet as a creator o economicand social value.

At its base are policies and standards that shape

Internet build out, interoperability, and secu-

rity. Te next tier, network inrastructure or

backbone, comprises the cables, switches, rout-

ers, and towers that are the essential transmis-

sion grid or all Internet traffi c. Next there are

the connectionsthe on-ramps through which

individual and enterprise users plug inand

the enabling technologies like individual PCs,PDAs, phones, and IP networks that allow users

to tap the Net. Layered on top o that is con-

tent: streaming media, data, peer-to-peer (P2P)

communications, games, voice communica-

tions using Internet protocol (VOIP), and text,

including e-mail. Finally there is usage, the ever-

changing ways in which both individuals and

enterprises chose to consume Internet content.

Te our middle tiers o the stack (applications

and content, enabling technologies, connections,

and network inrastructure) generate about

US$3 trillion in annual revenue, more than two-

thirds o which comes rom advanced markets

today. Tis includes (under applications and

content) the margin attributable to the Internet

rom e-commerce, the enormous and rapidly

expanding volume o purchases and services

delivered over the Internet, rom book sales

to tax preparation. Te volume o e-commerce

is estimated at US$8 trillion annually, but we

estimate the margin attributable to the Internet

as a retail channel to be roughly on the ordero US$0.5 trillion. Tereore, the grand total

or Internet-related revenue adds up to roughly

US$3 trillionand counting.

In contrast to this transaction-based value, the

Internets social value remains immeasurable.

But we do know it is creating a whole new world

o opportunitytransorming human interac-

tions while at the same time challenging many

existing social and political structures. Although

this is not the primary ocus o our report, it isan inevitable and powerul orce or change.

FRAMINGTHE$3 TRILLION INTERNET

Use

Applicationsand Content

EnablingTechnologies

Connections

NetworkInfrastructure

Policies and Standards

$0.7tr

$0.6tr

$1tr

$0.7tr

INTRODUCTION

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Making sense o these possibilities calls or

scenariosstories o the uture that are inten-

tionally diverse and stretch our thinking to

accommodate both the expected and the

unimaginable. By visualizing a broad range o

potential utures rather than making specic

predictions or ollowing narrow orecasts, sce-

narios help to surace new opportunities and

new risks and to explore plausible outcomesthat could be game-changing.

Our process involved the ollowing components:

We began with a broad review o open

source and proprietary research and projec-

tions (see Appendix 1 or a description o the

range o topics explored). Tis was ollowed

by interviews with experts and leading think-

ers rom within and outside Cisco, including

members o GBNs Network, to identiy the

drivers o change that might undamentallyalter the Internets uture. Tose interviewed

were diverse in terms o perspective, loca-

tion, and expertise.

Trough our research we identied a set o

premises that provided a oundation or all

the scenarios. We then prioritized the change

drivers according to those that were most

uncertain and most important in shaping the

path o the Internet in the next 15 years (see

Appendix 2 or a ull list). Tese drivers were

condensed into three axes o uncertainty,

which became the scaffolding or raming

possible scenarios.

Finally we selected, rom the range o plau-

sible scenarios, our scenarios to develop in

depth. We chose these or two reasons: rst,

they challenged our assumptions, individu-

ally and collectively, about what might tran-

spire; second, they suggested business and

policy implications that were meaningully

different. Te scenarios were then tested and

rened with a range o subject matter and

scenario authorities.

INTRODUCTION

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FIVE PREMISESFOR THE FUTUREThe future of the Internet will be driven, at least in part, by many

dynamics that can already be seen today. Hence, we believe that there are

features about its evolution that we can count on with confidence. Below,

we offer five premises about the future of the Internet, drawn from our

research, interviews, and analysis. These themes appear repeatedly in the

scenarios, leading to quite different implications when combined with otherpossible developments that are more speculative in nature.

BY 2025:Most growth in the Internet-related

market will have occurred outside

of todays high income, or advanced,

economies.

Global governance of the Internet will

remain substantially unchanged.Digital natives will relate to the

Internet in markedly different ways

than earlier generations.

Todays keyboard will not be the

primary interface with the Internet.

Consumers will pay for Internet

connectivity in a much wider range

of ways.

Each premise is described in greater

detail below.

1Growth in the global economy and

middle class will occur primarily

outside todays advanced market

countries. Transactions for Internet-

related products and services will

increasingly take place in countries that

we now characterize as emerging.

A major shif in global market structure will

result rom three actors that have compound-

ing and accelerating effects. Te rst will be

economic growth: the differential between GDP

growth in advanced and emerging countries

overall will be signicant and persistentin

excess o 3 percent per year. Second, the pattern

o growth in many o these emerging countries

will result in rapid expansion o their middle

classesboth in numbers and in purchasing

power. Tird, Internet usage and, ast on its

heels, broadband connections will grow quickly

in emerging countries, but will reach a plateau

soon in the advanced countries, characterized

by slower growth and aging populations.

Te impact o these three actors is represented

by a metric we call the Internet economy,

which approximates purchasing power in thehands o Internet users. Advanced market

countries accounted or about 85 percent o the

Internet economy in 2005; their share is esti-

mated to have allen to 70 percent in 2010. Our

premise is that emerging countries will account

or more than hal o the Internet economy by

2025, reecting their extremely rapid economic

1

2

3

4

5

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FIVE PREMISESFOR THE FUTURE

the Internet is likely to become much more

deeply embedded, even invisible. Te notion o

connecting could disappear almost entirely.

Tese digital natives will be less inclined to dis-

tinguish between suggestions made to them vir-

tually by Internet peers and suggestions made

by peers with whom they have had ace-to-ace

contact. Tey will also be more likely to respond

comortably when the Internet asks them unso-

licited questions or invades their privacy. Butmost importantly, digital natives will think

about the Internet as a general service platorm,

like conversation or thinkingpart o what

makes us who we are and something we just do.

As they reach the labor orce, these digital

natives will accelerate the trend among enter-

prises o all sizes toward relying on networks

as the multi-dimensional platorm or business.

One question that remains in the scenarios is

the extent to which there will be signicant lags

in the emergence o these digital natives across

the world: how large a minority o young people

raised alongside the Internet will be required

to trigger a Net generation effect, especially

in countries with lagging adoption rates? Te

sequencing o Net generations emerging in

countries that today have low Internet penetra-

tion will have a signicant impact; the relative

size o those in the overall population will also

matter and compound the effect o demographic

differences across the world.

4Todays QWERTY keyboardand

the language and interface hurdles it

representswill no longer be the primary

means of relating to the Internet as new

technologies transform that relationship.

Te QWERY keyboard is a relic o another era.

Its logic (minimizing jams in the hammer arms

o mechanical typewriters or English language

typists) became obsolete long beore the start o

the twenty-rst century. Yet English-language

computer keyboards still eature QWERY and

nothing else.

Te keyboard, however, is about to be over-

thrown by a combination o voice recognition,

bio-sensing, gestural interaces, touch-screen

versatility, and other technologies that will allow

us to input data and commands without keys.

Te keyboard will ade away gradually as the

people who learned to type on it age.

One major consequence o this change will bean explosion in the number o people who can

use the Internet, as well as in the types o things

they can do with it. A post-QWERY world is a

uture in which we dont have to put something

else down in order to pick the Internet up. Te

Internet will be a constant parallel processor

without QWERYs implicit Western bias.

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FIVE PREMISESFOR THE FUTURE

5Consumers will pay (or not) for

Internet connectivity in a much wider

range of ways, both direct and indirect,

compared to todays predominant flat-price

subscriptions.

As high-bandwidth applications explode, the

need to allocate available network capacity effi -

ciently across time and users will be a major

issue. Te spread o wireless connectivity will

also open up many new pricing models or

network access, such as easily bundling con-

nectivity and services. Capacity management

considerations will orce a major reshu-

ing among pricing models (indeed, similar

thinking by service providers is already quite

advanced). For the Internet, price elasticities

have not yet played the role that they have

assumed in virtually every other market. Avail-

able bandwidth or network capacity will have

to be allocated more effi cientlyand pricing is

a well-proven tool or that.

Rapid prolieration o new tolling and mon-

etization schemes will also respond to increas-

ingly ne consumer segments appearing across

geographies, age groups, genders, and personal

desires. Pricing preerencesand highly differ-

entiated competitive offerswill appear around

the ull range o transaction variables: bundling,

a la carte, as you go, off peak, tiered, introduc-

tory, balloon, pay or quality, pay or mobility,

billing cycles, publicly supported pricing, terms

and conditions, guaranteed, banded, bulk, spe-

cialty, and so on.

Almost everything that can be variably priced

will be. One-size-ts-all bandwidth options will

be the exception rather than the norm. Currentat-price plans will seem quaint in retrospect.

Te presumption that content delivery and

connectivity should be considered as separate

value propositions will also be subject

to experimentation.

We see the demise o one-price-ts-all, usage-

impervious pricing or connectivity as a given,

but the extent o technical progress on the

wireless ront and the nature o capacity con-

straints in the network (sporadic or sustained,

widespread or spotty, policy-driven or sponta-

neous) will have major implications or how

this plays out.

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Tese ve premises or the uture o the Inter-

net provide a oundation o relative predictabil-

ity but still leave ample room or uncertainty.

From our research and interviews we identied14 critical drivers o change that span a vari-

ety o economic, social, policy, and technology

dimensions. Tese drivers are also highly uncer-

tain, suggesting a range o possible outcomes

that could play a major role in the evolution o

the Internet through 2025. Exploring the pos-

sible impact o these change drivers (listed and

explained in Appendix 2) was a key step in the

development o our scenarios.

Tis breadth o coverage is important to our

purpose, yet playing with too many uncer-

tainties and scenarios can be overwhelming.

In order to offer a reasonable range o plau-

sible and provocative alternative utures or the

Internet in 2025, we synthesized the 14 critical

uncertainties into three axes. Tis allowed us toconstruct a scaffolding to explore a number o

possible scenarios:

Will broadband network build-out be exten-

sive as a result o the combined effect o pri-

vate and public investment, or more limited?

Will technological progress be characterized

more by breakthroughs or mostly represent

incremental advances?

Will user behavior (including the appetite or

ever-richer Internet applications) be unbri-

dled or more constrained?

AXESOFUNCERTAINTY

NETWORK BUILD-OUTLIMITED EXTENSIVE

TECHNOLOGICAL PROGRESSINCREMENTAL BREAKTHROUGHS

USER BEHAVIORCONSTRAINED UNBRIDLED

THREE AXES OF UNCERTAINTY

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AXESOFUNCERTAINTY

NETWORK BUILD-OUT

What will the global broadbandnetworkits breadth and capacitylook like in 2025?

Tis axis o uncertainty ocuses on key

characteristics o the global network, including

carrying capacity, speed, and other quality ac-

tors. How these characteristics differ around the

world will signicantly inuence what the Inter-

net will look like in 2025and how much oits promise o productivity, economic growth,

social inclusion, and enjoyment will have

been realized.

Te interplay o government policies and pri-

vate investment decisions will be a major ac-

tor in determining how this axis o uncertainty

plays out in time and space. Choices made by

governments, national and local alike, will have

a direct and indirect effect on network build-

out and on the spread o wireless options.

Direct actions might include public investment

in backbone or gap-lling networks, spectrum

allocation, and aggressive action to ensure that

other types o inrastructure are available to be

shared by ber deployment or wireless trans-

mitters. Indirectly, governments will inuence

network build-out through policies that affect

the incentives or network operators to invest

in expansion and improvements to both xed

and wireless networks.

Decisions that seem unrelated or tangential tothe objective o network build-out could have

major effects on private investment decisions.

Some o these policy, regulatory, and licensing

decisions will also inuence the mix and relative

bargaining power o various stakeholders and

create opportunities or, or barriers to, compe-

tition between entrants and incumbents, wired

and wireless, and short-term and long-term

objectives. Approaches to policy and regula-

tion will be orced to evolve with technology

and Internet usebut how quickly? o what

extent might more dynamic, ar-sighted licens-

ing approaches overcome the historical inertia?

How much regulatory competition will take

place across countries and will it result in the

convergence or divergence o approaches?

Responses by market actors will also vary. How

will investors and network operators react to the

shifing policy and regulatory landscape? Will

differences in market accountability and in the

time horizons or investment payoff lead to di-

erent private investment decisions in response

to the same government action?

TECHNOLOGICALPROGRESSWill there be widespread technologybreakthroughs or will progress be moremodest and incremental?

Tis axis addresses the range o new options cre-

ated by the evolution o the Internet. While ail-

ing to invest in R&D guarantees that there will be

no technological progress, there is an asymme-

try, as R&D investment does not ensure techno-

logical breakthroughs. Tis axis reects the large

element o unpredictability (even randomness)

associated with efforts to develop new technolo-

gies. Te adoption rate o new technologies is

also not easily predictable. National objectives,

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AXESOFUNCERTAINTY

such as the protection o domestic champions

or the creation o inormation and communica-

tion technology (IC) clusters, can also have an

effect (ofen negative, at least in the short term)

on the speed o technology adoption.

Advanced uses o technology have a role to play

and breakthroughs that affect business-relevant

unctionalities could have a major impact. But

given the masses o potential Internet users

waiting in the global wings, unctionality is not

the only consideration: affordability will also bedecisive. echnological progress that reduces

costs (as experienced over the last two decades

in connection with computer processing power

and storage capacity) could have dramatic

effects on the shape o the Internet in 2025. Will

technology innovation result in rapid, steady

declines in the costs o Internet-related hard-

ware, including smart phones, netpads, and new

connection devices?

Other areas o uncertaintyand opportunity

or technological progress include network

capacity, wireless capabilities, and security pro-

tection. Will new security technologies emerge

to better protect against both unintended and

willul Internet disruptions? How will storage,

compression, and miniaturization technolo-

gies evolve and interact to expand quality and

reduce bandwidth needs at the same time?

How about interoperability?

Finally, wireless is an area where technological

progress, or the lack thereo, would have a criti-cal inuence. Will wireless technology evolve

rapidly enough to ensure reliable high-speed

quality, thereby offering a real alternative to

xed (ber) networks or conveying rich content

and other demanding applications?

USER BEHAVIOR

How will enterprises and individualsrelate to the Internet and how will theirpreerences evolve?

Tis axis o uncertainty is about the choices

that usersboth individuals and busi-

nesseswill make and that will, in turn,shape overall demand or Internet access,

devices, applications, and content. radeoffs

and sensitivities center on price elasticity,

ease o use, security concerns, and con-

vergence or divergence in demand patterns

across regions and user segments.

Global economic prosperity, GDP growth, and

income distribution trends across and within

countries will be major actors in translating

broader preerences into actual choicesand

effective demand. Te economy will remain an

important backdrop, against which many o the

choices will be inuenced by perceptions o need

and by the evolution o preerencesincluding

generational differences.

How current users in high-income countries

(where Internet traffi c is now growing at expo-

nential rates) respond to evolving options and

with what kind o price elasticity will also have a

major effect. But how the masses o new Internet

users react to their new experience with differ-ent business and consumer preerences will be

equally important. Will the bare-all tendencies

ound in much current social networking, or

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AXESOFUNCERTAINTY

example, emerge among the next 1 billion users?

How about among the billion afer that? Criti-

cal conclusions will be drawn by opinion lead-

ers about the overall security o the Internet

as a mechanism or trade, value creation, and

inormation exchange. How different will those

conclusions be in Mexico, Russia, urkey, and

Indonesia, or across states in India?

o what extent will users trade off handsets or

embedded access portals: on automobile dash-

boards, on home walls, or in articles o cloth-ing? Will we experience a pendulum swing

away rom digital experiences (driven by tech

atigue or cultural discomort with virtual lie),

or will increasingly rich, multi-sense offers

keep expanding the global appetite or virtual

experiences? How will Internet use evolve

among corporate I departments and small-

and medium-size businessesand where? How

will the Net generations change their approach

to the Internet over time, and how activist will

they be regarding government and corporate

policies that affect their Internet use?

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THE SCENARIOFRAMEWORK

Using the axes of uncertainty as the basic scaffolding, we

created a scenario cube to visually depict the full range of

possible future states, or scenarios, suggested by permutations of

network build-out, technology progress, and user behaviors.

USER

BEHAVIOR

NETWORK

BUILD-OUT

TECHNOLOGICAL

PROGRESS

BREAKTHROUGHS

INCREMENTAL

UNBRIDLED

CONSTRAINED

LIMITED

EXTENSIVE

Te uture could turn out to be anywhere in the notional playing eld represented by theintersection o the three axes. Among the many combinations o outcomes, we chose our to

develop into scenarios. Te choice o scenarios was not driven by how probable we elt the

scenarios were, but by our attempt to provide a set o novel and divergentyet plausible

stories o the Internet in 2025. In each scenario all three axes play a role, although their relative

importance to the trajectory and outcome varies. Te our scenarios are:

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FLUID FRONTIERS: Tis is a world in which the Internet becomes pervasive and centriugal. echnol-

ogy continues to make connectivity and devices more and more affordable (in spite o limited invest-

ment in network build-out) while global entrepreneurshipand erce competitionensure that the

wide range o needs and demands rom across the world are met quickly and rom equally diverse

setups and locations.

INSECURE GROWTH: Tis is a world in which usersindividuals and business alikeare scared away

rom intensive reliance on the Internet. Relentless cyber attacks driven by wide-ranging motivations

dey the preventive capabilities o governments and international bodies. Secure alternatives emerge

but they are expensive.

SHORT OF THE PROMISE: Tis is a rugal world in which prolonged economic stagnation in many

countries takes its toll on the spread o the Internet. echnology offers no compensating surprises and

protectionist policy responses to economic weakness make matters worseboth in economic terms

and with regard to network technology adoption.

BURSTING AT THE SEAMS: Tis is a world in which the Internet becomes a victim o its own

success. Demand or IP-based services is boundless but capacity constraints and occasional

bottlenecks create a gap between the expectations and reality o Internet use. Meanwhile, inter-

national technology standards dont come to pass, in part because o a global backlash against

decades o U.S. technology dominance.

INSECURE GROWTH

FLUID FRONTIERS

UNBRIDLED USE*

TECHNOLOGY BREAKTHROUGHS*

LIMITED NETWORKS

CONSTRAINED USE*

TECHNOLOGY BREAKTHROUGHS*

EXTENSIVE NETWORKS

BURSTING AT THE SEAMS

UNBRIDLED USE*

INCREMENTAL TECHNOLOGY

LIMITED NETWORKS*

* Indicates most critical determinants

SHORT OF THE PROMISE

CONSTRAINED USE*

INCREMENTAL TECHNOLOGY

EXTENSIVE NETWORKS*

In the next section we bring each o these scenarios to lie.

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Its2 0 2 5 ,

and the Internet is ubiqui-tous, extending its power and impact ar and

wide. Its being used by 5.5 billion people now,

3.5 o them since 2010, meaning that more

than two-thirds o the worlds population has

newly experienced the Internet. Te exponen-

tial growth in Internet traffi c was ueled by both

an explosion o cloud services on the business

side and a mounting appetite or video and high

bandwidth applications among individual users.

Te resulting waves o productivity proved trans-

ormative or the economic and social develop-ment o countless countries, creating millions o

knowledge-based jobs.

On a more personal level, connectivity allowed

people to discover and act on new affi nities that

cross old boundaries o geography and culture,

changing the structure o human interactions

and liestyles in the process. Te early tip o a

big iceberg was the arrival o e-books and Apples

iPad, augmented by the availability and popular-

ity o open-source sofware and applications or

all sorts o new devices. Pricing innovations also

spread with a vengeance, with providers offeringmenus to individuals and businesses that eature

a startling number o offers and combinations.

While investment in network build-out remained

relatively modest (in many countries, mixed regu-

latory signals discouraged private investment at

various points in time), technological progress

was breathtaking. Wireless technology generated

a renzy o development in hot zones (no longer

spots) around the world. Te mobile Internet

is now a pervasive reality and the range o con-

nectivity options and combinations has expanded

everywhere. Te downside to this booming devel-

opment, however, is that public investment in net-

works is more diffi cult to justiy.

In this world the Internet becomes pervasive and

centrifugal. Technology continues to make connectivity

and devices more and more affordable while global

entrepreneurshipand fierce competitionensure that thewide range of needs and demands from across the world are

met quickly and from equally diverse set-ups and locations.

FLUIDFRONTIERS

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Dramatic increases in data transmission effi ciency

enabled traffi c to grow at unexpectedly high rates.

Yet computing power, storage, bandwidth, and

devices all experienced radical downward price

movements, i not in absolute terms then cer-

tainly as measured by unctionality per dollar.

Te geography o innovationtechnological and

managerial also shifed markedly. oday some

innovation still comes rom traditional places

like Silicon Valley, but most is erupting at dizzy-

ing speeds in places like Bogota, Cairo, Mumbai,

Perth, and Zhanjiang. Breakthroughs in compres-

sion, screen, or interace technology seem to hap-

pen overnight.

Much o this innovation and growth is being

driven by digital natives (those under 35 in

2025), who have taken the workorce by storm,

bringing with them the expectations and skills to

accelerate the use o technology. Already pioneers

in adopting technology or socializing and un,

they are now turning their Internet acumen into

a new wave o productivity and creativity. Whilethe generation gap is noticeable in many o the

established advanced economies, it is especially

signicant in the newly prosperous ones that were

labeled emerging back in 2010 but now consti-

tute almost a quarter o the global economy. For-

tunately these digital natives are also enthusiastic

about easing their elders into this brave new

world as they embed technology into the daily

abric o lie in ways we would have considered

awkward, invasive, or both not so long ago.

Tis generational boost also helped leaprog

such technology applications as distance educa-

tion and remote healthcare, which struggled to

achieve critical mass earlier despite their com-

pelling promise. Te arrival o young, Net-savvy

teachers and nurses made the difference, how-

ever, eroding divides and increasing effi ciency.

Widespread adoption o these services also paved

the way or more advanced technologies that use

multi-dimensional imaging, robotics, asynchro-

nous interactions with experts, and rich media

that can be adapted in a variety o contexts.

Given such pervasive access to high-quality com-

munications, education, healthcare, and inter-

active entertainment, it is nally possible to liveand work anywhere. Otherwise remote areas are

now more attractive, partially reversing the trend

toward urbanization and the sprawl o mega-

cities. But cities o all sizes are increasingly appeal-

ing, intensely connected, and reenergized by

national and local green and clean policies. New

technologiesand the global dissemination o

best practices and promising experiments via the

Internethelped make the integration o sustain-

ability and economic growth not just idealistic but

realistic. Tis benetted every part o the planet

and especially the Global South.

Te bottom line is inescapable: technology in

general and the Internet in particular, have deliv-

ered. From Maputo to Milwaukee to Mumbai, the

Some innovation still comes

from traditional places, but

most is erupting at dizzying

speeds in places like

Bogota, Cairo, Perth,

and Zhanjiang.

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Internet has become a act o lie, not just a nice

to have. More and more machines, compu-

tational devices, sensors, and humansalto-

gether numbering in the trillionsare now

embedded components o the World Wide

Web. In the past decade, we moved beyond

having a conscious relationship with the pro-

cesses, wires, and screens that we rely on; its

hard, even irrelevant, to say when one stops

and the other begins. Whether its the carpet

that alerts medical services when an elderly

person alls in her home or the automo-

tive system that adjusts your route based

on traffi c, weather patterns, and ood preer-

ences, we now take or granted the depth,

breadth, and consequences o connectivity

with everything and everyone. No wonder

this is such a high adrenaline world, perco-

lating with the buzz that comes rom being

always on, always sensing, always interacting,

and always changing.

Tis is also an exhilaratingand unsettling

world in which to do business. Players proli-

erate, rise and all, and constantly iterate thevalue proposition around the Internet. New

technologies, new access models, and new

pricing schemesconcerning both content

and bandwidthdominate the weekly industry

headlines. Te development pipeline is ull o

toys, consoles, sensors, interaces, and tablets

intended to make someones transition online

seamless. Yet many o the most touted inno-

vations are the product o unusual alliances,

partnerships, and licensing agreements, rather

than traditional R&D. o succeed, one eye

must always stay ocused on the corecost,

effi ciency, and sustainability metrics matter as

much as everwith another scanning the hori-

zon or signs o imminent disruption and eet-

ing opportunities. Even the most agile com-

petitors struggle constantly to stay ahead o the

emerging and morphing competition.

Looking ahead, there is no question that IPnetworks will continue to play a big role in

national, city, and enterprise competitiveness

as well as personal experiences and liestyles.

But in many parts o the world capacity limita-

tions are beginning to loom large. Te question

o how to nance the higher quality, exten-

sive networks that this densely connected,

rich-bandwidth world needs does not have an

obvious answer. Public-private partnerships

or network build-out are the exception rather

than the rule and ew governments have oundthe courage to prioritize public network invest-

ments. Can the orces o technological progress

that enabled the Internets explosive growth

rom 2010 through 2025 be counted on to con-

tinue doing so indenitely, or will a major new

policy approach be required?

FLUID FRONTIERS

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Life in the unfolding world of FLUID FRONTIERSMeet Diedra, Mieko, and Slava.

MIEKO, a 39-year-old professor at Tulane University in New Orleans, stands in front of her computers 3Dscanner in her underwear, hits record, and slowly turns around in a circle. Shuffling back over to her keyboard,

she hits send. Almost instantly, a voice with a Thai accent fills her living room. Those came through perfectly.

Stand by for us to project your 3D dressing room so that we can get started. Within seconds, shes in a virtual

dressing room with a three-fold mirror. Stand on the green dot you see on your floor, and here comes your first

stylethe cocktail dress that you loved. Suddenly, Mieko is wearing the most stunning red dress shes ever

seen, custom-sized just for her. The deep V neckline is as flattering as shed hoped, and the sequins add just the

sparkle she wants for the upcoming banquet. This dressthis lookwas why she was determined to try on thestyles of this particular Thai designer. Mieko, you look amazing. But lets try the dress in blue. Just a gut feeling,

says the voice. Suddenly, her virtual dress switches to a deep cobalt. Oh my God! Mieko whispers. Gaston wont

be able to take his eyes off of me!

SLAVA, a 46-year-old Internet executive from Ukraine, loosens his tie, his workday now done. Of course, theend-of-day commute doesnt take long, given that the business meeting he just wrapped up took place via video-

conferencing technology set up in his home office. Technically, Slava works for a firm based in New York City. But

thanks to incredible advances in videoconferencing, he can work almost seamlesslyas well as he could if physi-

cally in New Yorkfrom his new home in Tumbes, Peru. Plus, this Peruvian coastal town has become a major

center for solar-powered server farmsand who better to oversee his companys share of those servers than a man

who loves swimming in these gorgeous Peruvian waters? Slava, can you take a quick client videocall? Something

about that new deal with the micro-server firm in Odessa? he hears through his ever-present (in fact, embedded)

ear piece. Uh, sure, he says, tightening his tie. The beach can wait. OK, he says. Put them through.

There is no way

DEIDRAis going to miss her favorite game show, Date the Globe. Especially not this latest

real-time episode, in which a bachelorette from Reykjavik is posing really clever questions (instantly translated)

to single men in Mumbai, Cape Town, Cairo, and a remote research station in Antarctica, in an attempt to find

her true love. Deidra started watching the program on her 3D Flex Screen (located on the back of her backpack)

while she was on the bus from work. Now shes home and shes starving, but she cant miss discovering who the

bachelorette picks! So Deidra beams the show onto the side of her fridge, which she can view clearly from her

high-speed stove (her pasta water only takes six seconds to boil). Everyone can send real-time comments to the

bachelorette and to the bachelors, so Deidra taps a 3D button hanging in the air and says the Cairo contestants

name. Hey, tell her you love her eyes! Three seconds later, he does. Will it work? Deidra takes a final bite of

pasta, and waits for the bachelorettes choice. I just know its Cairo man, she cries, her fingers crossed.

as shed

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osens his tie, his workda

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Its2 0 2 5 ,

and the dream o the Inter-net as the great transormer is in shambles. Te

promise o a ubiquitous virtual platorm through

which an ever more globalized world would col-

laborate and think differently, and through which

all kinds o new businesses would change our lives

in unimaginable ways, simply ailed to material-

ize. In act, its hard to look back on the 2010s and

not blush. How trusting we were. And, in some

ways, how oolish.

Even 10 years ago, in 2015, the dream was already

tarnishing. Security breaches and data swipes

were becoming more requent and their conse-

quences more serious. Yet network build-out con-

tinued its march around the world, reaching even

the remotest o places where ew thought theyd

ever see a computer, let alone high-speed access

to the inormation superhighway. Wireless,

o course, was a big part o that story. And so

much investment! Network inrastructure came to

be seen as a key ingredient o national competi-

tiveness. Countries as different as Peru, urkey,

and Vietnam all launched programs combining

public unding and incentives or private invest-ment to ensure that networks extended the reach

o broadband across geographies and social seg-

mentsast.

And yet our ocus on the upside o connectivity

made it possible to miss something big. As the

world went about busily managing more and more

o its nances, relationships, and business online,

everyone just assumed that the platorm was un-

damentally secure in some capital-S kind o way.

Sure, the Internet was home to its share o scams,

viruses, and stolen identities, but these seemed

more annoying than dangerous. Plus, werent

there organizations and initiatives dedicated to

policing all that? (Hundreds o them, as it turned

outbut ofen poorly coordinated and sometimes

at cross purposes.)

INSECUREGROWTH

This is a world in which usersindividuals and business

alikeare scared away from intensive reliance on the

Internet. Relentless cyber attacks driven by wide-ranging

motivations defy the preventive capabilities of governmentsand international bodies. Secure alternatives emerge but they

are discriminating and expensive.

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Even so, how were we to know that the security

wall between our everyday Internet use and the

neariousness on the other side was as thin as the

spyware on any given laptop or PDA? Tere we

all were, typing and texting, orwarding personal

documents, accessing Youube clips, plugging

addresses and credit cards numbers into online

orms, making payments on our mobile phones,

and thinking that our anti-virus sofware or our

I department ortications were suffi cient. We

didnt realize that i we were to put our ears right

up against those rewalls, wed hear the shuffl ing

o thousands o vandals, raudsters, and cyber-

terrorists just inches away.

In retrospect, the highly publicized attack on

Google in 2010and, equally alarming, Googles

intimation that it wasnt sure i it could block

attacks rom happening in the utureshould

have made the holes in the rewall more vis-

ible. But it wasnt until reported incidents o

mega-hacks became commonplaceand seem-

ingly unstoppablethat we ully realized ourpredicament. Advising users to install patches

to operating systems or avoid clicking bad

links was like telling someone to duck against

a hailstorm o bullets. Te complexity and clev-

erness o these attacks ar exceeded the tools

available to combat them. In 2015, an issue

o Te Economist asked on its cover: Who Is

Foolish Enough to rust the Internet?

So we all woke upand rather abruptlyrom

our shared dream o an Internet that was unda-

mentally good. We didnt give up on the Internet

entirely; we just adopted a much more wary and

circumspect approach. Young, intrepid inter-

nauts adapted by sel-editing what they revealed

on social networking sites. Many other Internet

users limited their online activities to the websites

and businesses o known brandsparticularly

those that had redened themselves around saety

ratings and standards and touted their big invest-

ments in security, encryption, and raud control.

Impulsive Internet shopping was now a thing o

the past.

Saety was not cheap, and users ocked to expen-

sive private networks and online gated commu-

nities that promised bolstered security (even

i they didnt deliver). For those who couldntafford such services, the only alternative was

to be super-vigilant and limit online time and

activities. For many, once-common practices like

downloading sofware updates and iPhone apps

or trading stocks through the open Internet were

deemed too dangerous.

Te retreat o wary consumers rom the Internet

(or, at least, their new usage patterns) roze many

IP-based initiatives that had been in the works

and shook up all kinds o enterprises. In the I

industry, well-established sofware providers saw

their market positions strengthen while upstart

brands and service providers struggled. Mean-

while, the world o e-commerce was turned on its

head. Many companies that had redirected their

marketing strategies online swung back toward

more traditional approaches. Alliances o strong

Combating cyber-terror and

cyber-crime has become a

continuous, high-cost, low-return endeavor, much like

the old war on drugs.

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brands anchored by bricks and mortar and

secure technology ound their ooting once

again. Some banks chose to rebuild their street-

ront branches while others invested in super-

secure networks (and access procedures) hoping

to keep Internet banking alive, at least or high-

value clients. Similarly, cloud service provid-

ers developed new ways to be both ail-sae and

connected, but this made the cloud prohibitively

costly or many smaller businesses.

All this did not, however, keep malicious

hacking and illicit Internet activities rom

prolierating. It did contain their impactbutat considerable cost. Even now, in 2025, its

clear that cyber attacks cant be stopped

not outright and maybe not ever. Policing

the virtual world is harder than policing the

physical world. Combating cyber-terror and

cyber-crime has become a continuous, high-

cost, low-return endeavor, much like the old

war on drugs.

Tere was a silver lining, though. With connec-

tivity levels and Internet amiliarity quite high

in many countries, the Internet has become less

o a medium or economic activity or high-tech

interaction and more o an environment or

community activity, cultural and artistic shar-

ing, and political activism. Te back to basics

proponents o this less mercenary Internet are

delighted by the shif, which holds little appeal

or malicious intruders. Still, the Internet could

have been and done much more, i only it could

have been secure.

Tere were other bright spots. Print media

including newspapersdidnt die as predicted.

V has experienced a renaissance o sorts, with

limited interactivity that mimics the Internet

but is nowhere near as risky. And all that rapid-

cycle innovation in products and services that

once ooded the marketplace has been largely

replaced by quality-assured innovation. In act,

a lot o the renetic pacing o lie in the early2010sacilitated by our addiction to con-

nected devices, ubiquitous access, and instant

graticationhas slowed down. Te placement

o products and services on the Internet is now

measured in years, not months.

Still, there are many enclaves where sophisti-

cated use o secure networks does provide major

benets because the scale o revenues is large

enough to bear the associated costs. Many o

the applications thriving in these enclaves could

easily be expanded to much wider markets.

Tere is hope that new security technologies will

make that possible (undoubtedly resulting in the

emergence o the new I giant o the 2030s). But

or the time being, so much insecurity is gravely

hindering the Internets growth and potential.

INSECURE GROWTH

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Life in the unfolding world of INSECURE GROWTHMeet Alvaro, Ludmila, and Deepak.

ALVARO, a 29-year-old dentist in Sao Paulo, enters the Rapid Security Pod attached to his local Banco Itabranch and steadies himself for the barrage of BICs (biological identity checks) that will be run on him in the

next 46 seconds. First comes the iris recognition scan, then a finger prick to confirm his blood type. This is a

lot to go through just to use my ATM card, Alvaro mutters. But then he remembers how awful it was to have his

bank account hacked12 times. Plus, going through BICs wasnt all bad, thinks Alvaro, as a sultry womans

voice fills the soundproof pod, posing to him a series of random questions designed to elicit the right syllabic

fodder for voice recognition. I love that woman, Alvaro whispers, a bit embarrassed that hes dreamingnot

for the first timeof dating a disembodied voice. His BICs confirmed, an inner door opens. Alvaro whips out

his ATM card and gets to his banking.

LUDMILA, a 23-year-old computer programmer in Moscow, stares down at her fingers. Possibly criminalfingers. After graduating with honors from university, and winning awards for her thesis on Deflecting Service

Attacks from the Asian Triad: Three Approaches, Ludmilla had desperately wanted to join ROPF, Russias

online police force. But during the initial training, she quickly realized that ROPFs methodsand its cops

were not nearly fast and smart enough to catch the cybercriminals who were fast turning the Internet into their

own dark playground. Plus, she had bills to pay and parents to support, and it would be so easy to join any of

the dozens of hacking networks that keep trying to woo herincluding the Triad. Maybe Ill just check out

the dark side for a little while, she thinks, as she opens a blank email and types in [email protected].

DEEPAK, the 56-year-old owner of a top Indian Internet security firm, hits the end call button on hismobile phone and lets out a sigh. This wasnt the first pleading call hed received today, and he was sure it

wouldnt be the last. After Fridays epic hack attack, in which the identities of 1 million Indian citizens were

swiped, everyone and his uncle began to call Deepak, begging him to let them inside the protective walls of

WebBarb, the high-end, ultra-secure gated online community that he manages. Indian millionaires paid dearly

for the protection afforded by WebBarb. Yet his friends and family want in for free. Deepak feels badly that

the only people he can help are the very richbut not that badly. The kind of protection afforded by WebBarb

costs big money to provide. Let his cousins uncle in for free, when theres a waiting list of people willing to pay

handsomely to join WebBarb? No way!

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Its2 0 2 5 ,

and the news on the Inter-net ront isnt good, particularly considering the

potential that was envisioned back in 2010. It

could be worse, o course: the number o Inter-

net users has doubled (to 4 billion people) and is

ar more distributed than it was 15 years ago. Te

big disappointment, though, is that many o those

traveling the Internet today are doing so with

only basic unctionality. Sure, the super broad-

band Internet o ull-immersion gaming, stream-

ing 3D, and split-screen unctionality existsbut

only a ew people in very ew places can indulgein it. Across the globe, the Internet just hasnt

advanced in the whiz-bang way that the extrapo-

lation o trends rom the late 2000s would have

predicted. Not even close.

Te early 2010s seemed ull o promise, as a

mounting body o data showed an undeniable

connection between high-speed broadband and

economic growth. Tis persuaded many govern-

ments across the world to include broadband in

their stimulus programs. Various combinations o

public unding and incentives or private invest-ment signicantly expanded broadband networks

and improved the quality o connections. While

the pressure o scal decits soon constrained the

more ambitious programs, considerable progress

was made in expanding the reach and capacity o

broadband networks.

Te biggest surprise: these ambitious investments

in broadband have resulted in overcapacity. O

course, given the sustained economic pummel-

ing that the world has taken over most o the last

decade, the more modest evolution o the Internet

isnt exactly surprising. When economic recovery

ailed to consolidate afer a promising bounce in

2010 and 2011, economic malaise spread glob-

ally. Cautious consumers and hobbled banks in

SHORTOF THEPROMISE

This is a frugal world in which prolonged economic

stagnation in many countries takes its toll on the spread of the

Internet. Technology offers no compensating breakthroughs

and protectionist policy responses to economic weaknessmake matters worseboth in economic terms and with

regard to network technology adoption.

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the West dragged everyone down, and income

growth in emerging markets was set back by years.

Nobody was unaffected by this second waveand

no one escaped the lean times that ollowed, par-

ticularly in countries without robust institutions.

Financial dynamics changed dramatically, and

individuals and corporations alike had to work to

rebalance their debt loads even as they watched

the value o their assets diminish. Fiscal decits

also demolished any chance o urther stimulus

packages in most advanced markets.

Consumers worldwide rerained rom spend-

ing their money, i they were lucky enough to be

earning an income. Sparse cash and competing

priorities meant that most global citizenseven

those inching into the middle classwere orced

to make tough spending choices. High unem-

ployment rates and aging populations produced

increasingly large social carrying costs that no

one seemed prepared orleast o all the mega-

cities that swelled with new arrivals. Against this

backdrop, indulgences like 3D-HD home enter-tainment systems seemed beyond excessiveand

the subject o scornexcept or small up-market

segments in high-income countries.

What did all o this mean or patterns o Inter-

net use? Plenty. Te nearly 2 billion new Internet

users who came online in the 2010s turned out to

be surprisingly low-revenue business opportuni-

ties. Tey were careul consumers o online offers

and sought bargains at every corner: on devices,

on service packages, and on content offers. Tey

also used e-commerce sparingly and werent ond

o bells and whistles, exhibiting a preerence or

Internet essentials like VOIP, e-mail, and modest

P2P applications.

Lower-cost providers got creative, nding inven-

tive ways to segment markets and cater to rugal

users through off-peak pricing, limited-quality

connections, and other offers. Business models

that depended on teasers to sell premium pack-

ages were severely squeezed as consumers ocked

to ree offerings and resisted upgrades. Advantage

tipped to local service providers and technology

companies that could offer right-size or bite-size

deals and packages.

Most new and existing users seemed more ocusedon basic unctionality and service than on high-

end entertainment or virtual immersive experi-

ences. Screens, speakers, and ever more interac-

tive and ubiquitous interaces werent everyones

idea o a good time. As a consequence, many o the

newly connected cultural and ethnic groups never

got addicted to the Internet and even showed a

tolerance or government controls over content.

A similarly Spartan attitude affected business:

enterprises ipped their ocus on prots into an

obsession with cost management. Overall pres-

sure on the bottom line also had big implications

or R&D expenditures, dampening the emergence

o new technologies and tangling them in lengthy

development cycles. Flash-in-the-pan innovations

were tabled in avor o ones that improved dura-

The people who came

online during the 2010s

turned out to be surprisingly

low-revenue business

opportunities...and sought

bargains at every corner.

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bility. High-end design continued to speak to

the small and shrinking elite consumer niche,

but the overall attractiveness o that space

was limited by the erocity o the competition

and the modest prospects or growth. Opti-

mization, standardization, streamlining, and

ocus became boardroom buzzwords. Platorm

interoperability became more important than

ever: switching costs are now the nemesis o

hardware manuacturers seeking to introduce

next-generation technologies.

Relentless economic and social pressure turned

many governments protectionist, and not justin terms o trade. Sheltering national compa-

nies, including Internet and other technology

service providers, rom challenges by oreign

competitors was a high priority. Te rhetoric

revealed a deep-seated backlash against exces-

sive dependence on the leading hardware and

sofware companies (mostly American and

European) that had long supported Internet

use. O course, not all countries possessed

credible technology rms that could deliver

the required alternatives. In those instances,

tough partnership agreements based on tech-

nology transer were negotiated. National own-

ership requirements or companies in virtually

all IC-related areas also increased with varied

results: in some cases leading to inerior net-

work perormance, in others delayed adoption

o readily available technologies.

Now, in 2025, there is still near universal rec-

ognition o the potential o broadband as basic

inrastructure and yet there is much unrealized

potential and growing divides between the digi-

tal haves and have nots. Efforts to expand thebreadth and depth o connectivity continue to

be trumped in many countries by immediate

government concerns related to employment

and social saety nets, and by the trade offs aced

by many people around the world, between, or

instance, investing in smart communication

devices and the need to satisy more basic needs.

I and when that will change is anyones guess.

Meanwhile predictions o lasting economic

recovery keep proving to be wrong.

SHORTOF THE PROMISE

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Life in the unfolding world of SHORTOF THE PROMISEMeet Anjali, Norman, and Radu.

ANJALI, a 42-year-old Bangladeshi shop owner, rips open the big box shes just received and whistles. Insideare dozens of old smart phonesdiscards from the West and Japanthat have been refurbished and reloadedwith more basic software and interfaces by ReeFur, a top Indian technology recycling company. She picks up an

ex-iPhonethe little apple now buried beneath a ReeFur stickerand turns it on. What was once an app-filled

screen is now a vision of simplicity: one small square icon for Internet access, another for phone calls. Nothing

extraneous or flashy. Just the essentials and a couple of extraswhich, in fact, is all her customers will pay for.

These phones will fly off my shelves, says Anjali, already calculating her next order.

This sucks, says NORMAN, a 51-year-old product rep manning a table at the 2020 Houston ConsumerElectronics Fair. Looking around, he wonders if the misery and boredom written on the faces of the other product

reps mirrors his own. Norman has set up his display of next-generation handheld holographic videogame modules

so beautifullyreally, its the most becoming display job of his career. But the only people here to appreciate it

are the other reps. There are barely any customersthen again, there are barely any buyers at all anymore of

the kinds of whiz-bang stuff his company is still trying to sellwith less and less success. Consumers just arent

mesmerized by features and gadgets that are expensive and pricey, the way they used to be. No one even wants

the free samples, mutters Norman. He glances over at the Bluefang rep running the next booth, who is filing her

nails. Yep, says Norman. This sucks.

RADU, the 29-year-old Romanian founder of a small and innovative ISP, stands before his staff, buzzing withexcitement. His company, Micuta Faina (tiny meal), has just been named the most innovative company in

Eastern Europe. Its core offering: Internet service payment plans to match the customers budgeteven day by

dayrather than monthly subscription. We saw an opportunity that bigger companiesparticularly big Western

companieshave flat-out missed, says Radu. Cost-crunched consumers are trimming their spending as much

as possible. So the idea of paying per day as/when you can afford itforget all those unused hours!had broad

appeal. As a result, the very customers that the big players continue to dismiss as low-revenue opportunitiesare

the very ones who have now turned Micuta Faina into a huge success. If these other companies had listened to

their consumers, this could have been their idea, says Radu, raising a glass. Heres to the low revs!

THE

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31/52

characteristics. Also, rather than adopting sophis-

ticated new applications and devices, these young

innovators are ingeniously adapting technology

already in existence, with one o the more popular

ones being like the visual, low-cost equivalent o

SMS texting.

In terms o content, the volume o new inorma-

tion being created is astronomically highall o

which has needed to be organized, saeguarded,

and stored. By 2020, in the U.S. alone, Internet

traffi c was 100 times greater than it was in 2010.And much o the rest o the world experienced

even more dramatic expansions. Anything, any-

where that can be put online, is. As a result, the

platorm is now so overowing with content,

coordination signals, and basic communications

that it seems t to burst.

Te cloud has elt the pinch o this, as network

reliability is in doubt and storage capacity still

remains cost-effectively based on the client device.

Extremely thin devices have evolved too, but they

are considered an alternative (and one that comes

at a price) rather than the hands-down preerred

choice. One o the strongest market plays to

emerge in cloud computing has combined cloud

services with a dedicated high-quality network.

Te move by one o the major global hardware

manuacturers to acquire a collection o small tel-

cos and turn them into a global niche ISP caught

much o the competition in both elds by surprise.

For a company to make money in this environ-

ment, it has to be nimble. Te management teamsthat seemed to intuitively grasp the evolving com-

petitive landscape were those that honed their

skills in the ast-moving, messy world o emerging

markets in the 2010s. What they all had in com-

mon was the ability to turn challenges into oppor-

tunities and scale rapidly to become global play-

ers. Yet grassroots business models ocused on

smaller, specialized, and nontraditional markets

also proved key, enabling bold entrants to chal-

lenge the incumbent leaders who couldnt adapt

quickly enough. Device manuacturers were par-

ticularly shaken when demand or sophisticated

devices plummeted; many o these new consum-

ers wanted valuenot ash and bang.

Meanwhile, the notion that Internet access should

be considered a basic human right gained moreand wider support. I the Internet was critical to

national economic development and the deliv-

ery o a whole raf o services like education and

healthcare, the advocates argued, then unettered

individual access would only accelerate progress.

Plus, the demand or access rom individuals all

over the world was almost deaening. Civic insti-

tutions, NGOs, and inuential supranational

organizations like the UN were clamoring or

it too. By 2018, the Internet or all movement

seemed unstoppable and basic access began to

spread quickly across the globe. Unortunately,that created quite a paradox: it worsened system

congestion to the point that plans to extend basic

access to many low-income pockets were back-

logged or delayed.

New users have remarkably

high expectations, demanding

options and functions that are

way beyond what the prevailing

standards, protocols, and

infrastructure can deliver.

THE

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Tis dilemma was compounded by the mod-

est investments made in network build-out

and improvements over the last decade. Incen-

tives or private investment were ofen eroded

by regulations to extend network access and

prevent discrimination, without any signicant

public investment in backbone to compensate.

Other policies relevant to the Internet shifed as

well. By 2020, many national broadband plans

showed overtones o deense technology policy,

as happened earlier in the century with energy.

In retrospect, o course, this might have been

anticipated. Not only did the absolute power

o the technology point in this direction, but

there was also a signicant desire to level the

playing eld around U.S. technological domi-

nance. Te lack o agreement on upgrading the

protocol to IPv6 was largely attributed to the

geopolitical undertow.

Nevertheless, there were a smattering o

small countries where visionary governments

tried to combine their nations quality-o-lie

appeal with high-speed, high-quality capac-

itysuccessully creating a test market or new

applications and an attractive base or Internet

innovators. Elsewhere, large islands o good

connectivity were surrounded by vast expanses

o overburdened networks with poor reliability,

speed, and quality.

Now, in 2025, the question on everyones mind

is, What happens next? We are addicted to

connectivity and everyoneliterally everyone

is counting on it to keep expanding. But the lim-

itations are too obvious to ignore and no one is

sure how to climb up to the next plateau. As di-

erent players seek to circumvent the constraints

o existing networks, and in the absence o newnetwork-enhancing technology breakthroughs,

a ew post-emerging governments are quietly

supporting research on wholesale alternatives

to the well-worn Internet protocol. Tere is

rampant speculation on the direction and prog-

ress o that research and now rumors are ying

that somewhere a new protocol is about to be

launched. China and Russia are the odds-on

avorites, although a surprising number o less

prominent countries are mentioned as well.

BURSTINGAT THE SEAMS

THE

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Life in the unfolding world of BURSTINGAT THE SEAMSMeet Issa, Anna, and Dzong.

Haraka haraka haina baraka. The old Swahili proverb (haste makes waste) was not meant to apply to the new high-speed

connection linking Mkokotoni, a village on the island of Zanzibar, to the outside world. Until today, the village had been

known mainly for its tuna and king mackerel fishing and its bustling daily fish market. But today, Mkokotoni would become

the first village on Zanzibar to have a live video link to Japanese fish brokers. The fishing cooperative leader, ISSA, hasmade a big deal of the symbolic flipping of the switch ceremony (the high-tech version of the symbolic ribbon cutting).

After a brief speech, Issa presses the remote and nothing. He tries again. Nothing. Peter, the representative sent from

the South Africa-based service provider, puts down his camerahe was poised to capture the glee they were all expect-

ingand begins frantically checking and rechecking the connections. Peter has no idea how to tactfully tell the village

leaderand all the fisherman clustered behind himthat the system is congested, the ceremony a victim of the increas-

ing burden placed on existing networks with every geographic expansion. I sooo did not sign up for this, thinks Peter as

he puts on a big smile and walks nervously toward Issa and the crowd.

Ive got one! shouts ANNA, a 22-year-old intern at Verbindungen, a Munich-based, all-volunteer organization thatscans the country for discrimination perpetrated by service providers (the name means connected). Annas find is a

perfect example: an ISP operating in Eastern Germany seems to have a pattern of slower packet traffic from non-partner

sources and to lower-revenue generating connections. Annas fellow volunteers let out a whoop, and she beams with

pride. She cant wait to tell her dadone of the biggest supporters of the Internet for all movement she knowsthat

she just found something that could make a real contribution to the campaign. With the Internet so critical to delivering

healthcare and education around the world, high-speed access is essential. It must be assured! Back to work, Anna

thinks. We must do case studies to show activists in other countries what to watch for.

DZONG, a 16-year-old Vietnamese boy, used to feel so bored sitting on a stool for hours on end, watching overhis mothers low-traffic souvenir shop in Hanois Old Quarter and connected to his friends only through clumsy tex-

ting. When the occasional tourist wandered in to peruse the silk scarves or study a set of chopsticks, Dzong had felt

eternally grateful to them for disrupting his stupor. But now he doesnt need the tourists for that. Now he has the Bia

Hoi, a new device that connects him to his friends and to the Internet for cheap. Named after the super-inexpensive

Vietnamese beer that Dzongs parents still think he doesnt drinkas if!the Bia Hoi is the brilliant creation of two

young Vietnamese entrepreneurs not much older than Dzong. The device can do all sorts of cool stuff, like project

media onto any screen and conduct lightning-fast Internet searches. But its also affordable, primarily because it

somehow uses much less bandwidth than the alternatives. Now all of Dzongs friends have Bia Hois, and they spend

much of the day sending stuff to one another: film clips, texts, etc. The only thing they cant do is watch media in

HDa high-price function the Bia Hoi doesnt allow. But who cares? thinks Dzong, as he starts up another video

game on his device, sitting on his stool in the tourist-less shop.

camp

essential.

s what t

sitting on a stool for

connected to his frien

k scarves or study a set

doesnt need the tourists

ternet for cheap. Named

as if!the Bia Hoi is

device can do all s

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f Dzongs frien

he only thin

thinks Dz

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tex-

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Bia

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ir shop in Han

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not much ol

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idth t n th

one oth

ia H oesn

is st in th

o

ed to feel so bo

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peruse the

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ds and to the I

he doesnt drin

r than Dzong.

st Internet se

ernatives. No

clips, t

. But

t-less

re

nd

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oi

sured! B

hours on end, watc

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tarts p a

in

THE

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Having developed our scenarios to help usexplore alternative, plausible utures or the

Internet, we can play with them in a variety

o ways. Yet its important to remember that

the value o these scenarios has nothing to do

with whether we accurately predict the uture

15 years rom now (which is unlikely to hap-

pen in any case). Scenarios are useul because

they help us to see emerging patterns differ-

ently, to separate the signal rom the noise

so we can detect big risks or opportunities in

advance, and to rehearse ways o managingunoreseen challenges.

PLACING THESCENARIOS INPERSPECTIVE

We have already described the differences

across our scenarios in terms o their charac-

teristics (the change drivers behind the axes

o uncertainty) and in terms o their texture

and eel (what it might be like to live and dobusiness in these utures). Beore proceeding

to sketch out the implications rom different

angles, however, it is helpul to compare how

different the Internet looks in 2025 in each o

the scenarios according to two key metrics:

the level o Internet use and the composition othe global Internet economy.

Te level of Internet useencompasses both its

breadth (how widespread the Internet is; what

proportion o the global population uses it) and

depth (how intensively the Internet is used and

how much traffi c it carries, dened as the global

median o Internet traffi c per user). As shown

in the gure below, the level o Internet use is

highest in Fluid Frontiersand lowest in Short of

the Promise.In Bursting at the Seams,Internet use

USINGTHESCENARIOSANDEXPLORINGTHEIR

IMPLICATIONS

INTERNET USE ACROSS THE SCENARIOS

BURSTINGAT THESEAMS

SHORTOF THEPROMISE

INSECUREGROWTH

FLUIDFRONTIERS

Depth= Internet Traffic

Breadth= Internet Penetration

DEP

TH

BREADTH

1THE

EVOLVINGINTERNET


2025


35/52

USING THESCENARIOS ANDEXPLORING THEIRIMPLICATIONS

is deep in many areas but somewhat

less distributed, while the reverse is

true in Insecure Growth, due to pre-

vailing concerns about security.

In our rst premise about the evo-

lution o the Internet at the begin-

ning o this report, we postulated

that emerging countries would

represent at least hal, and at most

three-quarters, o the global Inter-

net economy in 2025. In the Fig-ure to the right, the composition

of the global Internet economy is

depicted relative to each scenario

as arrayed in the previous gure.

Short of the Promise is the world

in which the emerging countries

do least well, accounting or about

hal o the global Internet econ-

omy in 2025 (up rom 30 percent in 2010).

In Fluid Frontiers,however, the rise o emerg-

ing countries continues unabated; by 2025 theyrepresent three-quarters o the global Internet

economy and overshadow the old advanced

countries in terms o both demand and supply

or Internet-related products and services.

EXPLORING IMPLICATIONSACROSS SCENARIOS

Te Internet is a pervasive, complex phe-

nomenon that encompasses many actors and

stakeholders. We hope these scenarios, andthe underlying discussion o driving orces

and uncertainties, will be useul to all o them.

But, as noted in the introduction, we have two

primary audiences in mind: decision-makers

in corporations directly involved in the busi-

ness o the Internet and national leaders and

policymakers. Both are, o course, ultimately

concerned with their effect on and relationship

with all users o the Internet: individuals, enter-

prises, and institutions.

Te primary concerns or each o these audi-

ences, respectively, can be summarized in two

questions: what business models will best estab-

lish a sustainable, protable position around the

Internet o the uture; and what are the policy

challenges that need to be addressedpreer-

ably beore 2025in each scenario.

Whether you are a leader in industry or

policy, the uture is likely to surprise you

despite skilled orecasts and data-rich analy-ses. By using theseor your owndivergent

scenarios to rehearse the uture, you will be

better able to anticipate, respond, and adapt

to an uncertain uture.

INTERNET ECONOMY ACROSS THE SCENARIOS

BURSTINGAT THE SEAMS

SHORTOF THEPROMISE

INSECUREGROWTH

FLUIDFRONTIERS

Emerging

Advanced2010

DEPTH

BREADTH

THE

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36/52

USING THESCENARIOS ANDEXPLORING THEIRIMPLICATIONS

WHAT IS THE BUSINESSMODEL FOR 2025?

Tis is the question we used to anchor the

exploration o implications or Internet indus-

try players.

One way o examining the business model

implications o the scenarios is to look at how

the dynamics between providers and users

might differ in each o them. Te ramework

below is designed as a launching pad or thisexploration. On the horizontal dimension we

consider the basis on which the providers o the

key Internet components interact directly with

users (both individual and businesses). On the

vertical dimension we provide a simple classi-

cation o the types o transaction that character-

ize the user/provider interaction.

Working through this ramework, we start

with a airly well-established enclave (PCs

are bought, as is most sofware). Connectivity,

however, is typically by subscription and the

drif towards ree (or, more accurately, indirect

payment) is already in playparticularly or

content but with some open-source sofware as

well. Yet some o our scenarios will signicantly

shif this paradigmvertically toward ree

transactions and horizontally toward bundles

o offerings. Tese types o changes will shape

the different business models that are likely to

be successul in each o the our worlds that our

scenarios portray.

I you are an industry player, consider the ol-

lowing questions:

What assumptions are you and/or your com-

pany implicitly making about the world in

2025? Which scenario comes closest to your

assumptions? How will your business model

evolve to succeed in that world?

What happens to your business model in the

other scenarios? What are the big challenges

or opportunities that might arise?

What early indicators or signposts should

you be tracking so that you know when to

revisit or adjust your strategy?

WHAT ARE THE POLICYCHALLENGES BY 2025?

Tis is the question we propose or policy-

makers to consider in exploring the scenario

implications.

Our ramework to address this q

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