Irving Wladawsky-Berger

The Continuing Evolution of the Internet

A few weeks ago I had an interesting discussion with Bob Kahn.  Along with Vint Cerf, Bob is recognized as one the key fathers of the Internet, for which they both received the 1997 National Medal of Technology and a number of other top prizes.  The occasion was a board meeting of the Corporation for National Research Initiatives (CNRI), a not-for-profit organization that promotes research in the public interest which Bob founded in 1986 and continues to lead.  Earlier this year, I joined CNRI’s Board of Directors.  

 We were talking about the continuing evolution of the Internet, something Bob is uniquely qualified to discuss.  Beyond his role as co-inventor of its key protocols, Bob has played a leading role in shepherding the Internet from its modest beginnings over forty years ago to its well recognized position as the engine of the digital revolution. 

What do we mean by the Internet?  The most concrete answer is that the Internet is the global system of interconnected computer networks based on the TCP/IP protocols co-developed by Cerf and Kahn.  But, beyond the central role that TCP/IP has played, I believe that the success of the Internet is predicated on a few key architectural principles: open, simple and distributed.

Memories from the 1996 Atlanta Olympics

Like a big portion of the world’s populations, I very much enjoyed the recently concluded 2012 London Olympics.  Over 10,000 athletes from 204 countries competed in 300 events.  The Summer Olympics are just about the biggest possible stage for everyone involved, - the athletes; the host cities; and the different companies involved in the production of the Games.  For each of them, it is an opportunity to shine, or to stumble, while the whole world is watching.

The Olympics are an excellent occasion for companies to showcase their capabilities in a very demanding environment.  So, having recently launched IBM’s Internet initiative, we were looking forward to unveiling the very first Olympics website at the upcoming 1996 Summer Games in Atlanta, as part of our efforts to establish IBM as a major Internet player.

We were pretty sure that the Atlanta Olympics website was one of the largest Web project anyone had undertaken so far.  We were well aware of the considerable risks inherent in doing such a complex, new project on such a global stage.  We were worried that beyond a certain number of users, the response time would start to degrade, and if sufficiently stressed beyond its capabilities, the system could become unstable and crash. 

But, we felt that this was exactly the kind of market experiment we should be doing to learn what was needed to support large numbers of live users on the Web.  We were part of a wave of innovative, experimental projects that were trying out all kinds of new Web applications.  We were counting on our Internet audience to understand that this was not yet a prime time application - more of an alpha or beta system, - and thus forgive its shortfalls.  We got as ready as we possibly could before the games opened - and then crossed our fingers hoping that things would go well.

En Route to the Cashless Society

Over the last few months there have been a spate of articles on the evolution to a cashless society as the use of mobile devices continues to grow around the world.  The Death of Cash, Time for Cash to Cash Out?, Visions of a Cashless Society, and Why Cash is Losing its Currency? are some of the titles.  The articles are generally focused on two key aspects of mobile digital money: innovative technologies and apps, which are primarily being introduced in the more advanced economies; and the financial inclusiveness of the poorer segments of society in developing economies.  Let me briefly explore an article in each of these two categories. 

The Death of Cash, published by Miguel Helft in Fortune, is a good article of the first category.  He writes about his experiences buying a cappuccino at a coffee house in New York City.  He payed for it by simply telling the cashier “Charge it to Miguel,” and was done.  That’s because the coffee house uses Square Register, an iPad-based digital cash register application, and Helft has Pay with Square, a digital wallet app in his smartphone. 

Both products were announced last year by the San Francisco-based startup Square.  Square Register is an iPad app that enables merchants to accept payments, generate digital receipts and manage their menu items and prices.  Pay with Square is the companion smartphone app that let’s customers open a tab at any business that uses Register, and pay for their purchases by simply giving their name. 

The smartphone app is linked to a credit card and your personal photo.  The iPad Register app detects when you are in the store with Pay with Square open in your smartphone and displays your name and photo.  After ringing up your purchases, the cashier makes sure your photo matches your face and then taps on it to charge the purchases to your linked credit card.

Just before posting this blog, it was announced that Square’s mobile payment offerings will be available at Starbucks’ 7,000 US stores.  Somewhat similar capabilities are being pursued by a number of other vendors, including PayPal, Verifone and Google.

Disruptive Innovations and Large Companies

A few weeks ago I gave a seminar at an executive management class for a large, global company.  The class consisted of up-and-coming executives, roughly in their late 20s and early 30s with 5 - 10 years in the company.   The subject of my seminar was Managing Technology-based Disruptive Innovations.  I used my personal experiences at IBM, the development of the Internet strategy in the mid-late 1990s in particular, as a springboard for discussing two major subjects: why companies, no matter how big and successful, need to embrace disruptive innovations that will likely have a major impact in their industry;  and why doing so requires an entrepreneurial approach quite different from their more typical operational culture.

Given my long career at IBM, as well as my more recent involvement with Citi, it is not surprising that I am particularly interested in entrepreneurship and innovation in large companies.  While I’ve been involved with startups, the bulk of my experience has been with large, global companies, not just IBM and Citi, but many others I’ve interacted with as part of my work. 

Quite a few people think that entrepreneurship in large companies is an oxymoron.  In March of 2009, The Economist published a very good special report on entrepreneurship.  Its lead article defined  the term as: “somebody who offers an innovative solution to a (frequently unrecognised) problem.  The defining characteristic of entrepreneurship, then, is not the size of the company but the act of innovation.”

It further added:  “Many entrepreneurs are sworn enemies of large corporations, and many policymakers measure entrepreneurship by the number of small-business start-ups.  This makes some sense.  Start-ups are often more innovative than established companies because their incentives are sharper: they need to break into the market, and owner-entrepreneurs can do much better than even the most innovative company man.”