Where Does Technological Innovation Come From?

 Education, General, News  2 Responses »
Jan 232013
 

Technological innovation comes from many people around the world every single day.  Yet, it is rare to know the names of those who spawn the innovations that eventually reach market and change our lives.  Most people tend to only read headlines instead of history.  If you are one of them, you would think that true technological innovation is generated by a select handful of individuals sitting by themselves in a small garage in California.

There are many examples of a lone innovator scrawling an idea on a napkin or a piece of paper that becomes a billion dollar company, forever altering how we interact with the world. In fact, the current combined net worth of “The Big Four” (Microsoft, Apple, Google, Facebook) is somewhere north of $1.1 TRILLION dollars.  And they were all started with very little money and a single idea.  So how is it that we all know about the humble beginnings of innovators such as Steve Jobs, Bill Gates, Larry Page, and Mark Zuckerberg?  Because their stories have been told so many times, they are now the stuff of legend.  Today, parents tell their children they can do the same thing as a tale of optimism, much the same way our parents used to tell us that we if we studied hard we could become the President of the United States.

Looking at these famous innovators brings up a very important question.  Is it the individual and their idea that change the global landscape, or is it the proliferation of that innovation by the company they found which is the real innovation?  To answer that question, we only need to look at the “most important inventor” in the history of America, Thomas Edison.  Between 1868 and 1930, Edison had almost 1,100 submitted patents accepted for a multitude of products.  Most of them never saw the light of day or were merged into other products being developed.  But a few of them, such as the light bulb, irrevocably changed the world.

So how exactly how did Edison invent the light bulb and go down in history as “the father of the Electrical Age?”  He took the idea of Joseph Swan (the inventor of the original incandescent lamp), made a small adjustment based on the work of Nicolas Tesla, and devised a brilliant marketing strategy to sell enough light bulbs that he could afford to buy out Swan and merge their companies together to form what is now General Electric.  Before you start feeling sorry for Swan, keep in mind that he stole the idea from Warren De la Rue, who stole it from Humphry Davy, who originally developed it in 1809 in a tiny laboratory using a battery, two wires, and a simple charcoal strip.

While Edison was a brilliant man, it would be more accurate to say that he innovated a marketing and business strategy as opposed to the phonograph or the light bulb.  So even though history remembers Edison as an innovator of technology, it was his innovation in the realm of business where his true legacy was shaped and continues to influence todays’ corporate innovators by creating a prototype for CEOs to emulate…not technological innovators.

This brings us back to today and the innovative genius of Gates, Jobs, Zuckerberg, and Page.  All four had a vision and the ability to see the unlimited potential of a product or service that just needed to be tweaked and properly marketed.  Yet people seem to only want to discuss their legacies as technological innovators rather than brilliant businessmen who understood market positioning based on the needs and wants of other businesses and end users. All you need to do is review their early careers to understand that their vision was not one of technological creation, but rather, one of business creation.

Bill Gates got Microsoft off the ground by inking a deal with IBM to provide an operating system called PC-DOS for $50,000.  Of course, he didn’t invent PC-DOS.  He licensed it from Seattle Computer Products AFTER he inked that deal, changed three lines of code, and rebranded it.  That Operating System later became MS-DOS (and later Windows) and pioneered the home computer revolution of the late 1980’s.  After the release of Windows, rather than being content with Microsoft having cornered the OS market, he had the vision to diversify and expand Microsoft’s influence into other areas including broadcast television (MSNBC), Intellectual Property licensing (TCPA), and home gaming (XBOX) while fending off numerous lawsuits and actions from fallen competitors and government agencies to maintain a superior market position.

Steve Jobs was also more CEO and entrepreneur than inventor.  He founded Apple to sell the Apple 1 PC, which was developed and built by Steve Wozniak.  Upon incorporating, he promptly bought out his third partner (Ronald Wayne) for $800 and never looked back.  Because Wozniak was building the computers by hand, he had to acquire an investor (Mike Markkula) to absorb the high production costs and created partnerships with VisiCalc and Xerox to keep Commodore, Tandy, and IBM from devouring his company before it got off the ground. He then tried his hand at creating a computer himself (Apple Lisa), and after failing miserably, decided to take over development of the Macintosh after Jef Raskin had nearly completed the project.

Yet his greatest contribution to the early growth of Apple was his decision to spend $1.5 million to have film director Ridley Scott create an Apple commercial for Super Bowl XVII, which turned out to be his last master stroke before leaving Apple to flounder while he started a new company, NeXT Inc.  After he left, Apple tried to follow the Microsoft example of diversification by producing failure after failure in the ancillary electronics market (i.e. portable audio, TV appliances).  It was only after Jobs and his vision for a global conglomerate came back on board in 1996 that the string of failures ended thanks to the development of the iMac by Jonathan Ive and Jobs’ ability to negotiate a licensing deal with Microsoft to release Office software for Apple PCs.  After that, Jobs made a number of smart licensing and technology purchases from other innovators that led to the release of products such as Final Cut Pro (formerly Macromedia), GarageBand (formerly Emagic), and iTunes (formerly Sound Jam MP).  Bringing these innovations to market gave Apple the diversification they needed to explode into a viable global brand.

Zuckerberg and Page also followed a similar path that was blazed by Edison and improved upon by Jobs and Gates.  Facebook was a well thought out combination of two very popular sites (Friendster & Hot or Not) mixed with some “borrowed” ideas from a few other classmates, while Google began as an algorithm created as part of a college PhD dissertation showing the mathematical properties of the world wide web as a visual graph.  That algorithm became the transition from original web crawlers to the first generation of true search engines.

Both Zuckerberg and Page found a way to enhance something as it was becoming popular, brought it to market, and positioned it to succeed.  Over the years both men oversaw the growth of their companies through smart business strategies and legal maneuvering, while keeping their eyes open for the best talent and ideas to add to their company to ensure continued development and growth.

To see just how many ideas those four men have collectively created as opposed to how many they acquired and polished, you just need to look at how their companies have continued to innovate and how little of the technological innovation they were actually responsible for.  Since their inception, The Big Four have spent billions of dollars to purchase more than 380 companies.  Each company provided an innovation to be incorporated as part of a larger platform to maintain market dominance, or was dismembered after being acquired so a competing innovation never saw the light of day.  Those numbers merely highlight the fact that the true innovation provided by globally recognized brands, is more often than not, developed by small companies who sell (voluntarily or not) those ideas to companies better positioned to bring them to market.

When will the next wave of innovators come and alter the market?  They are already here.  Companies like Dropbox, Ubuntu, RackSpace, Acquia, and Bluefin are all producing and improving on current technologies and staving off the advances of larger companies.  The only difference now is that Apple and Microsoft are trying to acquire them, or strangle them before becoming a serious threat to their profitability.  Last year Dropbox turned down an $800 million dollar offer from Apple, while Ubuntu has been keeping their patent submissions half a step ahead of Microsoft and is slowly digging into their market share.

So what is the lesson to be learned here?  As long as there are people with innovative ideas and large corporations to buy and proliferate those ideas, there will continue to be technological innovation…even if individuals working out of a tiny garage are no longer the ones to deliver those ideas to the masses.

 

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Looking to the Cloud in 2013

 General, News, Virtualization  No Responses »
Jan 092013
 

Every year as the calendar comes to an end, a new year invariably elicits statements, declarations, and discussions about what kind of year it will be.  People proudly proclaim that this is they year they will lose that last ten pounds that has been hanging around, pundits make bold proclamations about the future of the political landscape, and industry professionals predict what the next wave will be to revolutionize their specific area of expertise.

For those of us who develop software, it has become clear that the prediction we need to be aware of is that 2013 will be the “boom or bust” year for all things cloud.  Then again, that was also the same prediction we heard heading into 2012.  And yet here we are again standing on the precipice of change.  No one can deny that the last year saw great advances in the world of cloud computing, specifically the proliferation of the public cloud by companies such as Amazon, Google, and Microsoft.  Previously, cloud computing had been the province of smaller niche software companies and data storage centers.  But as that business model showed gains in both popularity of adoption and profitability, the larger companies have finally committed their resources to capitalize on what has become a proven business model.

While mid-sized players in the private cloud arena such as VMware and Rackspace continue to offer greater efficiency and agility for specific end user needs, large global firms such as Oracle and HP are some of the new IaaS and SaaS players in what is a rapidly expanding landscape that is predicted to generate more than $40 billion in customer spending.  And yet, Amazon is still holding nearly 70% of that market share.

Just a few years ago, this conversation was limited to offsite data storage and accessibility of that data by remote users.  But with the rapid expansion of available cloud based web applications, file sharing platforms, and development of more such management tools by greater numbers of startups and boutique firms, the landscape has become littered with an overwhelming number of options for both early adopters of cloud technology and those looking to finally jump into the cloud.

After years of dealing with such a wide array of technologies and offerings from an endless list of developers, there has been a general shift in attitude towards the endless cloud debate.  There have been too many expectations for too long, and the tipping point is fast approaching.  Modern technology has become faster and more intuitive and accessible at a moment’s notice and end users will simply not wait much longer for a unified solution.

So while 2013 might not be the year the cloud finally dominates the IT world, it should bring about a firmer and more consistent public cloud offering.  If it doesn’t, the multitude of private cloud players just may very well continue to dilute the market share of the major players and wreak havoc in an already confusing and diverse world of cloud offerings.

 

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A Walk through the Clouds

 Education, General  No Responses »
May 232012
 


 

Unless you live under a rock on a deserted island, chances are you have heard about, considered using, or are moving toward “The Cloud.”  It is now a prevalent and unavoidable topic of conversation that has finally made its way from computing industry professionals to the general populace.   In the very near future, “The Cloud” will have become just another term in the lexicon of technology that people accept as a part of their daily computer activity, even if they don’t entirely understand it.  Much like instant messaging, search engine, the web, and Wi-Fi, the cloud is rapidly becoming as much a part of our daily lives as the bowl of cereal we have to start our day.

So how is it that most people can’t actually explain what the cloud is or where it came from?  How can something that is rapidly becoming a standard still be such a vague mystery to most who use it?  Rather than wondering how this phenomenon evolved, I thought it might be a great use of this space to explain how the cloud actually came to be.  My hope is that by understanding where the cloud came from, the reader can see how it will continue to develop.

The Cloud had very humble beginnings in the 1960’s as a future concept discussed by people like Joseph Licklider and Douglas Parkhill.  And while that discussion continued for decades, it was a very slow evolution from concept to proof of concept as developers and futurists were forced to wait for technology to develop a strong foundation upon which the concept could be explored.

Once internet service had begun to invade homes across the world in the 1990’s, the development and deployment of the infrastructure for rapid development of a grid (both electrical and computing) hit terminal velocity, as demand far outweighed supply.  For the first time, the intranet / local network architecture employed by large businesses in enclosed environments could be employed on a much bigger open scale.  This leap forward led to the birth of global pioneers like VMware and Salesforce who led the way in proliferating concepts such as SaaS (Software as a Service) and Virtualization.

With the success of this new internet model, which allowed individual users to integrate online content from anywhere with their own individual website / digital presence, the cloud was well on its way to becoming the natural evolution of the current model of hardline internet service and data sharing.   In 2003, Nicholas Carr began publishing a series of articles and books about the future growth of cloud computing under the banner “IT Doesn’t Matter” where he extrapolated that internet access and use would become a common and accepted commodity like other utilities such as water or electricity.

After that, the dominoes continued to fall quickly.  Throughout the decade there was a string of advances including Amazon’s IaaS (Infrastructure as a Service) model which laid the foundation for the “pay-for-use” cloud business model, the PaaS (Platform as a Service) model developed by Salesforce via Force.com, and the open source cloud platform created by Eucalyptus.  This, in turn, led to market giants such as Google and Gartner taking notice and making sure that everyone else did as well.

Since then, the paradigm has shifted as continuing technological advances have outpaced the ability of both futurists and market experts to predict the next advancement in data storage and sharing.  But for the time being, it is comforting to know that we live in an age where a walk through the clouds requires nothing more than sitting at a desk and clicking a mouse.