The X Internet: Leveling the playing field for businesses in developing nations

Navi RadjouSenior Analyst

Eroica HowardResearch Assistant to the CEO

1970 1975 1980 1985 1990 1995 2000 2005 2010

Waves of Internet innovation

FTP

Email

Telnet

GopherWAIS

Web

?????

Internetusers

Theme

The X Internet will let businesses in developing nations do more with

what they have

What’s behind the X Internet?

What is the X Internet?

Early adopters of the X Internet in developing nations

When will these changes take hold?

Agenda

What’s behind the X Internet?

Bandwidth lags other technology improvements

Computing

Storage

Bandwidth

4 MHz8088

0.1 MBfloppies

0.3 Kbpsmodem

1981

25 MHz80486

30 MBhard drive

9.6 Kbpsmodem

1991

2,000 MHzPentium 4

100,000 MBhard drive

300 Kbpsshare of T1 line*

2001

* Though most PCs and servers ship with 100 Mbpsnetworking interfaces, actual Internet throughputremains limited by corporate Internet connections

50%

62%

27%

CAGR

Bandwidth continues to lag processing and storage technologies

12

20

100

600

3200

10

40

120

5001000

400010000

3000060000

160000

2.4

9.619.2 28 33

56

300

1

10

100

1000

10000

100000

1000000

1975 1980 1985 1990 1995 2000 2005

Performance (MIPS)

Storage (Mbytes)

Bandwidth (Kbps)

Moore’s Law

Today’s “last-mile” bottlenecks

X Internet moves beyond bandwidth’s limits

12

20

100

600

3200

10

40

120

5001000

400010000

3000060000

160000

2.4

9.619.2 28 33

56

300

1

10

100

1000

10000

100000

1000000

1975 1980 1985 1990 1995 2000 2005

Performance (MIPS)

Storage (Mbytes)

Bandwidth (Kbps)

Moore’s Law

Mainframes andGreen screens

Client/server

The Web

X Internet

What is the X Internet?

The X Internet refers to two “Xs”

An executable Internet that supplants today’s Web

An extended Internet that connects to the real world

Executable Internet builds conversations

Server

Endpoints

The Web only provides answers

Account summary

The Web

How much is in my account?

The executableInternet

The executable Net creates a conversation

What should I do with my account?

Financial services tools (executables)

Two-way conversation about my account

BUY IT NOW

Isn’t this just Java?

Java is a piece of some solutions

But there are other alternatives

Extendedendpoints

Extended Internet -- an Internet of things

Server

Endpoints

The X Internet connects digital to physical

Internetcomputers DigitalInternetusers

Physical

Vehicles

Telephones

Buildings

Temp: 52° F Fuel: 1/2 tank Door:

Closed

• Tag is integrated with door, fuel, and temperature sensors

• Sensor data is transmitted every few minutes

WhereNet devices simplify supply logistics

WhereNet devices simplify supply logistics

Yard inventory is conveyed to users through maps and reports

Colors indicate trailer status and alert conditions

Early adopters of X Internet in developing nations

X Internet pioneers in developing nations

Hanssem Kitchen Ware (China)

EAN International (www.autoidcenter.org)

CK Tang Department Store (Malaysia)

UNCTAD/Savi Technology partnership

Case study: CEMEX (Mexico)

GPS-enabled truck fleet

20-minute delivery window

Savings: $100 million

When will these changes take hold?

The three waves of X Internet adoption

First waveof adoption(2001-2003)

Finance

LogisticsMedia

Second waveof adoption(2004-2006)

UtilitiesTelecom

Healthcare

Food and agriculture

High-techAerospace

Paper

PetrochemicalsAutomotive

Industrial equipment

Product fit• Bits-to-atoms ratio in end products• Intangibility of supply chain assets

2

3

4

5High

1Low

Industry readiness• Value chain simplicity• Propensity to adopt cross-firm apps

HighLow1 2 3 4 5

Third waveof adoption(2007+)Construction

Heavy industries

Consumer goods

X Internet devices and spending

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

5

10

15

Devices(billions)

Devices

Spend$1

$2

$3

Spend(US$ trillions)

Summary

The executable Net will supplant the Web

The extended Net will connect digital to physical

The X Internet will let businesses in developing nations do more with what they have

Thank you

Navi Radjou Eroica Howard

nradjou@forrester.com ehoward@forrester.com

+1 617/613-6119 +1 617/613-6295

www.forrester.com