I am here today at the TTM, the Technology Time Machine, organized by the IEEE where I have been chairing a panel on the Future of Service.

We have seen quite a change in telecommunications services in the last 10 years. In the last century (but that is just 12 years ago!) telecommunications services were strongly coupled with the infrastructure. Then the shift of intelligence to the edges (smarter terminals) and the transparency of the infrastructure led to a decoupling of services from the network. All of a sudden services were no longer confined by the network reach but have become global. The decreasing cost of sending bits have made the origination point irrelevant. From Kolkata you can provide a service to Cape Town. The world shrunk and the service providers multiplied to reach hundreds of thousands. The explosion of Apps are an evidence of this, as the services provided by Indian companies like Reliance to manage a network in the US from Mumbai.

There is here a weak win-win situation: Operators have seen an explosion of traffic driven by the increased number of services and service providers have seen an increased demand for services. It is a weak win however. Operators have lost their monopoly on services, actually they lost the service offering; the service providers are so many that only a few make significant money, most of them are barely cutting even and many are offering services without expecting revenues, further depressing the overall market.

The customer is a winner: there are so many cheap/free services to choose from. The reality is that of the 200 apps that might the present on a cell phone just a very few are actually used.

There is also a lose-lose situation: Operators have seen their cost for network upgrading increasing with uncertain revenues and service providers have a hard time to develop a money making service proposition, given the jungle and abundance of services.

Customers, as well, may be losing some of the quality they were used to. On the average, today’s customers have lowered their Quality Expectation and this makes, once again, a difficult selling proposition pricing for quality. Clearly some customers are willing to pay for guaranteed quality but they are just a minority. Besides, such a guarantee is getting more and more difficult to provide, given the spanning of a services over many networks a single Operator cannot control and involving resources that are not part, nor controlled by the network.

What can we expect in this decade and beyond? A crank back is unlikely. We are going to have even more networks in the future, each one controlled by a different party and actually so many of them, and sometimes so fleeting, that the establishment of old time inter-Operator agreements is not an option. We are going to see networks created by terminals, mesh networks, sensors networks, software defined networks, viral networks, bio-networks. You embed a chip, or even program a bacteria (we are in 2050) and you establish a communications through nearby bodies.

So many more networks on the horizon. So many that some radical change in management and communication paradigm is needed. My opinion is that such a change will derive not from planning and deployment, rather it will happen as an emergent property of the whole. Autonomic systems will dominate the landscape. The very concept of network is going to fade away, substituted by the concept of communication fabric.
Services will keep increasing in number but given the hundreds thousands we already have, does any increase make a difference? Am I going to feel it? Unlikely. But if I, and you, are not going to feel it it is even more unlikely that we are going to pay for them.

And still, they will keep growing. Hence, new biz models, new sustainability ways have to be found. As communications, sustainability is likely to become embedded in objects and in environments.

The same, I bet, will happen to services. That is the only way for accessing them. You cannot access a service you don’t know is there and with millions of them you will be unaware of most. But you, and I, will keep accessing objects around us, will keep living in our environment and interact with it. This interaction, more and more, will be service mediated. This is what the Internet of Things and WITH Things are all about. And this, to me, is the future.

Celebrating this week the 150 years of Italian Unification, it comes to mind all the cultural aspects that create a nation. Since the formation of the territory, the language and the culture that within its locals variations create the sense of nationality.

The audiovisual is an important aspect of the formation of a culture. With its visual references found in art, photography and cinema. Italy especially in the cinema field will always be referred and remember for one of the most important movements in the contemporary cinema history, the neorealism. Studied by many, it was so well translated in its core by the great cinema critic AndreBasin.

This movement and its productions were only possible through the cultural and historical aspect upon it was found on. It represents best the evolution of the personification of a nation, and created some of the strong image references of the cinema and the Italian culture.

Nowadays the same territory and its cultural aspects are been reinforced and revised by the digital technology. The virtual world of the internet recreates new contours based on the real world that surrounds us. Its experiences and possibilities translated in a different dimension that is already part of our everyday life.

Instruments like mobile phones, computers and tablets help increase the connectivity and dynamics of the process with instant access. Services provided by Telecom Italia help make it possible. But new ways of making it better are being developed, like the project I am involved in at the Future Center.

Marco Polo 2.0 is a platform that comes to connect the territory, local service and culture with the World Wide Web experience. Connecting different communities, relating the real and virtual worlds. Italian cultural and lifestyle in multimedia contents, making larger experience of the territory possible. Reinforcing the sense of Nation through out the new media.

We have been talking a lot about augmented reality. That is the way technology can provide more information and sensation about the reality around us, like overlapping a text or an image on what we would be seeing normally. But now we can move a step further and consider “expanded reality”

The concept here is to “expand” the reality we are experiencing by adding other elements that are not overlaid on it but are extending it.

It sounds very science fiction like, but we have it already in our home, specially with the wifi devices that enables one to play games, do exercise by himself or dance with others. The technology is here, what we can expect in the near future is an expansion of quality of image, expansion of the interactivity and the amount of information exchanged.

Since the systems operate on movement and position sensors that require a high quantity of data exchange and quality image, capturing and projecting video and 3D: the optical fiber is the best solution available today for the exchange of the amout of data required. It is many times thinner than a normal cable and can carry up to 100 times more information, energy and light. It also functions as a sensor, a video capturer and a projector devise.

Combining the new available technology and the use of the right materials the possibilities are within our fingertips and beyond our imagination.

This requires a significant amount of bandwidth to trick our senses and this is what the fiber in the access network are providing.

I think it’s not so easy to surprise me, but I admit that this time something did it. A group of scientists that works on smart fabrics incorporating nanotechnology have invented the Spray-on Fabric, something I believe will revolutionize the concept of clothing and fashion.

This technology consists of short fibers combined with polymers, which are dissolved into a solvent to allow them to be sprayed from an aerosol can, in order to create form-fitting clothes. The cold spray dries instantly on impact with skin and after a few minutes the resulting fabric can be removed as a normal cloth and washed with the rest of the laundry. The spray procedure may be done several times to obtain more layers depending on the desired thickness, and if you don’t like the texture or the color, never mind, simply dissolve it in the same solvent and start over! I’d be concerned about the solvent used and any allergic reactions that have been found, but I’ve not found any information about these topics yet.

Here you can see the spray in action:

Consider the potential of such a technology which properties can be tailored to meet customer’s needs in creating personal clothing styles, with the desired feel – wool, linen or acrylic fibers depending on the texture you want to give to the fabric – due to the disposable philosophy that prevails in modern society. And what about the chance to have a thousand clothes in one? There’s a party that requires a tie, it’s cold and you’re without gloves, you’re in the pool and you realize you’ve forgotten your swimsuit, you twist your ankle or your knee and you’d need a functional bandage. You have the spray, it’s all right! Moreover, it seems the team is already working on a sanitary spray-on bandage system to deliver first aid in the case of wounds or to soothe burnt skin.

The ultimate goal could be to embed sensors in the form-fitting clothes during the manufacturing process, so it’s possible to choose each time the chip type, and the garment in which to place it. Think of all the information you could gather on the lifestyle of people, on their habits, and especially consider how it would be easy to measure those vital parameters useful for monitoring people’s health. Today when we think about a product, we have to think about all the services that could be developed on it… And clothes are things, that will more and more belong to the Internet, and less to us!

Yesterday I read the Roberto’s thought about the idea of a Telco involved with all those industries producing appliances in creating a sort of framework – a business ecosystem for the businesses – between the real world of devices and the virtual one. So a Telco finally will manage data, and not only connectivity… Well, I think that in writing how much I agree, my comment could take more than few lines, so here’s my post.
In recent years we have seen how the phenomenon of globalization and the resulting price war have decreased the income of manufacturing companies. An international we-sell-for-less-competition has made companies more vulnerable and their environment more complex. Growth through acquisitions may lead to increased efficiency, industry consolidation, and revenue growth in the short term. However, the decline in revenues in most product-centric industries cannot be avoided in the long run. But companies, to escape from this dramatic climax, have a chance: to transform their product-centric business models into value added services networks.
And this is observable in practice since cost advantages at Chinese factories are disappearing as more companies search for ways to create value by adding services. Obviously this trend is also due the fact that manufacturing in China is about to get far more expensive and companies are trying to figure out how to deal with the higher costs. I recently read a New York Times article that said that Foxconn, a major Apple supplier, was planning to cut costs by moving hundreds of thousands of workers from Shenzhen toward lower-cost regions in China’s mountainous interior. Ok, the formula is simple: low margin, high volume. Companies like Foxconn try to survive by being efficient. This is it. But what happens when margin is too low? Even the assembly-line of those robot-workers in Guangdong Province can nothing! That’s why I think services may increase the competitive differential in the cost battle.
However some industrial manufacturers still look at service as a cost element, others – let me say fortunately – as a strategy. These last ones have deployed growing efforts in developing services in addition to their traditional product business, successfully considering their service-focused business in a profit-center perspective. And according to me that’s the only way to remain competitive in the marketplace and to secure a long-term growth… just look at the cases of all those companies in which a strong service strategy has led to a positive impact on their financial performance.
So it’s a crucial point to transfer innovation from products to services, turning manufacturer’s base product into a platform that provides a layer of personalized services on top of every single product, in order to create new revenue streams. And through such a platform, manufactures can establish an infrastructure where they hold a direct relationship with their customers, essential to rapidly adapt to their changing needs and involve them in the product co-creation process.
In order to reach this objective, product-based businesses need to adapt their systems and processes to support new service pricing models and to handle the massive volumes, both customers and transactions, that are entailed. And these numbers that must be managed go up by one or more orders of magnitude. No problem, Telcos are familiar with these kind of challenges. Even an hot topic in the telecommunications industry like the Application Store, probably the hottest right now, is not new for Telecom Operators: the concept of paying for downloading apps (arcade games, ringtones, etc.) to our phones dates from the late ‘90s and Telcos have been doing it for years. What’s new is definitely the business model that Apple has introduced. What’s strong is the ecosystem created by Steve Jobs. Although, as demonstrated by the launch of the iPhone 4, nobody is perfect!
What I feel now as a commonsense, is that Telcos should recognize that monetization of non-core business models, powered by changes in communications (such as machine-to-machine technologies, cloud computing and hyper-connectivity of devices, sensors, things and people), is a core competency. This is the movie where a Telco can have a leading role, and it’s a new brand role where it should be the owner of a technological platform that offers a plethora of services like billing, value tracking, products traceability, mash-up services, reinforcement of distribution channels, business intelligence, customer profiling, revenue sharing, and so on, on behalf of some other non-telecom businesses. It’s not more the time where the first three layers of the OSI reference model made the difference, and to increase the revenues it was enough to increase the network intelligence: biz is living on the very top of the OSI stack of layers, the Application one! If Telcos will not be able to seize this great opportunity, then other industries will figure this out on their own, paradoxically looking at Telcos as sources of best practice in the field. And what apparently may seem even more illogical is that companies are asking Telcos help: having a Telco more actively involved as a trusted party, as a matter of fact, can facilitate the creation of a Business Ecosystem and accelerate change for the benefit of all players, saving time and avoiding risks. Banally, if you are a manufacturing company moving to a service model, you may start to compete against your distributors. So, something like “concentrate on your own businesses and let us take care of the rest” sounds good to all those SME that do not have any ICT competencies, that do not care about everything is social on the back-end side (Social CRM) and on the front-end side (APIs), that have never explored the potential of the viral marketing, that have never monetized the social networking.
Here at Future Centre we are experiencing this within the Marco Polo 2.0 project that aims to transform the “Made in Italy” and the Italian tourism into a personalized, enriched, holistic user experience. So the hotel will no longer sell a simple room, but through the platform will be able to enrich the product of its core business with endless ad hoc services developed by third parties. In the same way, tens of thousands of small Italian wine producers will have a digital window on the world and can enjoy the whole arsenal of innovation developed by Web 2.0, as a powerful marketing tool. And this is the logic that underlies the Business Ecosystems: growing the pie before we divide it, through a win-win cooperation!

Augmented reality and presence are considered by Cisco as the driving forces for the evolution of telecommunications and they see themselves as service providers that accidentally sell equipment. In the future may lay holographic displays to further enhance the sense of presence. This would also require much bigger bandwidth.

The present business models for services is gone, and it is likely to be gone forever. Only 18% of the Apple’s Apps downloaded are paid (the others are offered for free). Customers are moving beyond the “network-service” provider association and see services as something independent of the network (they no longer see) and from the access, they increasingly control through their terminal (WiFi, 3G, roaming access….).

For Orange the future will be about making customer life simpler, any service delivered should be seamless from a customer point of view. There is no more such a thing as a single company leading. The world is interconnected, what one companies does affects many others. France Telecom has set up research labs around the world (small research groups) that are basically interacting with the local environment and work for integrating what’s coming up in the various areas.

For NanoQuebec president the future will be influenced to a great extent by the pervasiveness of sensors. They will provide data that in principle can influence our life. The infrastructure is there to bring these distributed data to some area able to make sense out of that.

According to the CEO of Creative Commons, Japan, the network neutrality and transparency will be driving evolution, shifting focus from network to open networks. Connectivity will be among data rather than between termination points.

Technology evolution in performance and price (affordability) is steering telecommunication in the next decade

- storage – as much as desired, 1 TB in the cell phone, 10 Tb at home

- processing – low power consumption (enabling increased performance in handheld), very low cost with printed electronics (embedding processing, interface and radio comm) lead to objects becoming part of the Internet.

- higher screen resolution 4k and beyond – enabling sense of presence

- combination of terminal, image recognition and tagging enable augmented reality

- sensors increased flexibility, self powering through scavenging, makes for ambient awareness

- autonomic systems

- massive DBs and statistical data analyses, enable new ways to make sense of the world

A low cost pervasive infrastructure offers low transaction cost to the ecosystem of independent enterprises, SMEs. This means a wealth of services being developed at the edges of the network. 

The network, and the network owners, can do much more than just offering pure low cost connectivity.

The cost of transaction in service offering and management depends on connectivity cost as well as other aspects, like authentication, security, billing, regulatory framework. All of these can be offered by network providers. 

But services, as such, are no more the turf of network providers. iTunes and the iPhone are a point in case. No company that I know of would have been able to deliver 85,000 apps in a year. Are they all sound, interesting apps? Of course not. But they are reaching the long tale and by doing that they are opening the marketplace bringing in more people.

Spectrum efficiency limits have been basically reached

- dense bandwidth is more needed than high speed peak performance

- need for pervasive optical infrastucture to support 10 times more cells

- this is also going to drive down energy consumption (but it does not decrease today’s consumption, simply it does not require the same kind of increase that would be required by today’s architecture)

- growth of access cells independently managed

And who is qualified to decide if a service is stupid or makes sense? We gauge, as Operators, a service based on revenues. If it does not bring large revenues to make margins we consider that service not worthwhile. People have a completely different gauging system. If they use something, than it makes sense. The more they use it the more it makes sense. 

Connectivity is being commoditised, it suffers from its success. It is becoming so essential that, like bread, it is considered a right for all, not just for the wealthy or well-to-do.

Companies that have been thriving on connectivity sale are suffering and will be suffering. Making connectivity more valuable is not going to solve the problem, in a way it is likely to make it worse. 

Improving connectivity country-wide requires huge investment, and the returns are not at all in line with that. Improving connectivity in a few spots can make sense from the point of view of a network provider but may not make sense country wise. Focussed investment is unlikely to create a thriving ecosystem since the ecosystem thrives in the long tale, not in the wealthy sectors that are all too well commanded by few-big corporations.

This is a challenge for the future since it takes big investment to provide unlimited communications capability at low cost and those that may have the funds are not the ones willing to use it. 

Opportunities are visible by having new revenue sources. These cannot come from the present customer base that is already paying as much as they can afford and it is not looking to pay more but to get more for less.

They come from the briging of objects with the web and the willingness to pay from companies that want to use those objects as gateways to reach customers. In doing so they see an opportunity to decrease cost in the delivery chain and that frees money. Part of it can go to network providers coffres.

We are going to see in the next decade that more and more objects will be offered to the market with embedded communications, the same that is happening today with the Amazon Kindle.

People will take for granted that an object is connected to service and information. They will not know, nor care, how this connectivity is made possible, nor who is the network provider ensuring the connectivity.

This embedded connectivity will change the way we look at and use objects. 

More than that it is going to create a biz ecosystem around each type of object, something that is very difficult to predict before hand in its characteristics but that can easily be envisaged in general terms.

I just read this news on dpreview.com:

Panasonic is pleased to announce that a new firmware is released for the Lumix G interchangeable lens LUMIX G VARIO 45-200mm / F4.0-5.6 / MEGA O.I.S. (H-FS045200).  The firmware includes improvement of auto focus performance in AFC mode for taking photos. It also enhances performance of auto focusing and stability of O.I.S.(Optical Image Stabilizer) while reducing noise of aperture control for taking movies(Except for FHD mode of AVCHD in DMC-GH1).

The Pentax lens that is being upgraded by a new software release

What strikes me is seeing the change that is happening in objects as they get a computer embedded: we have been used in the last 5 years to buy digital reflex (and more recently top of the line point and shoot) and get software updates fixing problems and providing new features. Now it is the turn of lenses. They have an embedded PC and you get software updates.

I consider this as a general trend that in the next year will  make washing machines, cars, televisions, you name it, looking mor elike services than products. I can easily imagine offering new features at a price through software updates (this is already reality for the iTouch). The possibility to third parties to offer software upgrades is also around the corner. Ecosystems are coming to the mass market, sooner that I imagined.