C6 The Disruptive Computer

Summary

The computer has a massive power to disrupt. This chapter looks at some of these disruptions. There are a number of aspects to this that I examine. The first is the disruption that electronic storage media occasions. Here bookshops and high-street music retailers are under severe commercial pressure from online sellers of e-books and music downloads.  There is also the disruption to science. Computers have now become so small and so rugged that they are being used to generate very large amounts of data. Current statistical methods and curation facilities are being strained by this and I look at the work of the researcher Jim Gray who, before his untimely death, was at the forefront of attempts to bring tools, ideas and technologies to an area that is known as e-science.

Another theme of the book is of the emergence of a journalism culture independent of major media organisations where social computing technologies such as Twitter and Blogs provide an alternative view of the world.

Chapter Links

  • Borders UK and administration.
  • The end of Zavvi. Note the quote from a retail consultant at the end of the article “Is there room for a music store on the High Street? The answer is probably no, he added, highlighting the intense competition from digital downloading, online gaming and cheap CDs from the supermarkets” The next decade will be a time of challenge for both booksellers and high street music shops. Here’s an indication of the difficulties for music vendors on the high street and an indication from the US.
  • The web site of rottentomatoes.com.
  • The two Christensen’s books on innovation mentioned in the text can be found here and here in Amazon. He has also a number of other books. One is a recent look at innovation, another an examination of the American health system and a third book on universities. He is one of the foremost thinkers on commercial and technological disruption. This is his faculty entry at Harvard which, among other things, lists his publications.
  • The Wikipedia entry on AdWords.
  • Pinsent Mason on outsourcing.
  • The Digg website. I find this a really interesting site although it has tons of stuff on it and you do need to spend time searching.
  • The power of social media: how Twitter spread the news of the Hudson River crash.
  • The Digital Journalist. If you are interested in modern photography then this is an excellent site.
  • This is a site devoted to the Long Tail idea, some chapters are available for download. It is put together by Chris Anderson, the author of the book. Here is the expanded and updated version of the book at Amazon.
  • Martyn Daniels is one of the commentators on electronic publishing I really trust. This is his blog. It’s well worth visiting it every week.
  • The Project Gutenberg web site. This was a project that was forty years ahead of its time. Why don’t you consider writing (or rather typing) for it.
  • The Google Books site. There has been a lot of controversy about the Google books project. Here is a recent example describing an element of the controversy from the Guardian newspaper.

Blog Posts

Disruption at Netflix

I mentioned Netflix in the book as an example of a company that opened up some of its data to the outside world in order to improve the way that it recommends films to its customers. Recently it made a decision that shows the power that the computer has to disrupt.  Netflix’s business has been associated with DVD rentals for some time; however, the fact that Internet speeds are increasing has meant that it has increasingly offered streaming services.  This year they decided to split the businesses.  A decision that they later reversed. I was surprised by this in that I would have thought the best way to organise the transition from being a metal disk renting company to a streaming company would be to have a common entry point with offers and branch points for dedicated DVD customers to sample and, perhaps, be hooked on streaming.  Here’s an example of disruption being handled by a succesful company that is in the eye of the storm.

What Does Major Increases in Broadband Speed Mean?

Yesterday British Telecom (BT) announced that it was accelerating the timetable for delivering increased broadband speeds, promising up to 100 Megabits/second. My current broadband connection delivers between 1.5 to 3 Megabits/second as the house I live in is quite a distance from the nearest exchange. For me this speed is fine: all I do is surf the web and process emails.  However, it lead me to thinking what would be the effect of such speeds.

First, I am sure that it would accelerate cloud access; for example if the response time of a word processor hosted on the Internet is the same as for a word processor situated on a home computer then, provided costs are lower, there would be no competition.  Currently cloud office systems lag somewhat behind the heavy duty package Microsoft Office in terms of functionality; however, with Office 365 entering the fray this year we might see the end of home installed office software as increased broadband speeds kick in.

The second effect will be on home entertainment.  Already BT is using the Internet to stream television with its Vision programme. Netflix is looking to enter the British market soon.  The speeds quoted by BT  enable high definition streaming. If I was a conventional provider of television and film feeds, for example Sky, I would be looking very hard at what this announcement from BT means.

Another home entertainment effect is associated with music. About a year ago I stored all my CDs on a computer drive. I now listen to them on a fine pair of Bose speakers attached to my laptop when I work in my study and via my iPod connected to an amplifier in my living room.  I really thought that I was being state-of-the-art. That is until I saw some stuff on Amazon’s Cloud Drive. Here you store your files in the cloud and use an application called the Amazon Cloud Player to play the music. This is the music analogue of the move towards the office in the cloud. With increased broadband speeds there will be little incentive to store MP3s locally. There may even be models of access that enable the user to rent MP3s for a short period.

One possible future is that with a much greater use of bandwidth there may come a pressure to charge users on volume use just like any other utility. I currently use a broadband plan that gives me unlimited download volumes. I just wonder whether the logic of computer power as a utility will mean that charging will follow the electricity and gas models of charging and this plan will become a fond memory.

Here is an interesting article on the increasing use we make of the broadband in terms of download volume.

Disruption at Kodak

Here’s a recent example of disruption that has affected a company whose products are known worldwide. Note the last five paragraphs.

Google and ITV Advertising Trends

In this chapter I looked at how an online advertising technology such as Adwords has threatened conventional advertising. The example I gave was the competition between ITV and Google. Google is now set to overtake ITVs revenues. Story here.

An App for Hanging out your Washing

There’s an interesting article in the Daily Mail today that describes 50 things that you do that have been wiped out by technology. Most of them I could have predicted; for example ringing a cinema to find out the times of a film. However, there is one mysterious item at 48: ‘Hang washing out in winter’ . Perhaps there is an app for it, but I could not find it in the Apple store.

Digital Sales Still Increasing

A consistent message over the last few years has been the increase in sales of digital music over that on CD. Data released at the end of 2011 shows that the trend continues.  It also looks like consumer behaviour is changing in that the focus is increasingly on individual tracks rather than collections of tracks. Here’s a report from the BBC. I visited my local branch of HMV in Milton Keynes and it is clear that this chain is taking the threat very seriously in that it had an excellent section devoted to technologies such as the iPod and staff who seemed to know what they were talking about.

Amazon and Disruption

In the book I describe the problems that the media industries face. For example, I described the demise of Borders UK, my favourite bookshop. Naively I thought the disruption was just associated with the high street. This article from the Independent describes the disruption that Amazon could cause to publishers and agents.

The End of the High Street?

The Daily Telegraph is predicting a major decrease in shops you can find on the High Street. Here’s the article. Here’s an account of a Deloitte report into what we might see in the coming years.

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