Get Real [reposted from Darwin, May 2004]
[formerly published in Darwin, May 2004]
Every day, 3.2 billion instant messages flit around the globe, moving between 400 million or so folks that are tied into the global instant messaging (IM) networks of AOL, MSN, Yahoo, and others. 30% of that traffic is business, not teenagers swapping gossip or MP3 files. Hard-headed business types conducting normal business through IM. A whopping 1 billion messages. And that’s just what’s moving through the so-called “public” networks (they aren’t), and doesn’t include private networks like Bloomberg, Reuters, and others in the financial services sector, or those moving through strictly corporate, behind-the-firewall products, like IBM Sametime, Microsoft Messenger, or the hundreds of enterprise IM solutions. That’s hundreds of millions more messages.
Another startling factoid: 40% of business IM use leads to a phone call. This points out that the core value of IM isn’t messaging, but presence, that capability integral to IM systems that lets others know if you are online and available. Presence is changing how business people are communicating, at a truly fundamental level. It’s the next killer app.
The Value of Real Time Communication
I have been asked many times to try to quantify the value of presence-based communication within a business – which is what IM boils down to. Leaving aside the decrease in telephone calls, email, and travel expenses, what are the other savings?
I have tried the “return on time” argument: asking people what their time is worth, and leaving the arithmetic to them. This turns out not to be very convincing to CIOs considering the rollout of a half a million in hardware and software.
Metcalfe’s Law has become the conventional wisdom about value of network communication, and says the value of the network grows with as a function of the population. And this is true as far as it goes. It’s email era economics.
David Reed has postulated that Metcalfe’s Law doesn’t take into account groups in the network, which make the whole greater than the sum of the parts. Reed’s Law has superceded Metcalfe, and better fits this new era. The value of a network – once many people are involved – is measured by the number of social groups it supports. And as the population increases, the value of the network grows exponentially because people join many, many communities.
Real time communication (RTC), thanks to presence, allows us to participate in more groups, and with people anywhere in the world. What medium we use to communicate is less important – we could ‘text’ by cell, chat through IM, switch into voice-over-IP, make a phone call, or use web conferencing. Presence lets us have that conversation right away, as soon as possible.
So we collaborate better and more quickly because of the RTC conversational model, contrasted with the store-and-forward model of email. Email has always been a rude approximation of how people really communicate. Chat is well-suited to group interaction, and a thread of email broadcasts isn’t.
Ultimately, the value of RTC is the acceleration gained by shifting over to it. The formal proof is this: as groups are enabled to respond to real time events – opportunities, threats, market information, supply chain alerts, whatever – by replacing serialized, asynchronous communication with RTC, overall information transfer across the company accelerates. In a seeming paradox, moving to real-time group interactions instead of email, phone tag, and serialized workflow increases parallelism overall. And this speedup is measurable. One real time application company, Blueair Networks, increased productivity within an aerospace purchasing department 10%-15% through the roll out of a single RTC purchasing application. Other evidence suggests overall productivity improvements of 20% or more. These first order productivity benefits are waiting to be tapped.
However, the second order effects – when companies are able to do new things, not just the same old things faster – yield larger returns. A great example: today’s financial services sector, which has relied on RTC systems for decades. There is no way that world could operate without RTC infrastructure. It is not just slow time communication sped up: it is a qualitative and comprehensive change in the conduct of business.
From Application to Service
David Reed wrote that the shift in scale as networks get large changes their economics, and “tends to support new categories of killer apps, and thus new competitive games.”
Presence is the new killer app, and the usual suspects are getting ready for war, including an open source movement dark horse (Jabber). Most importantly, the instant messaging players have done two things:
- they are reconfiguring first generation instant messaging products into services, so that other applications can integrate with them, and
- they are decoupling presence from instant messaging, so presence can be threaded into everything. Literally everything.
Imagine monitoring presence and availability of devices – like printers, pacemakers, manufacturing equipment, or air conditioners – through RTC presence services. Or monitoring location of parts in a factory, trucks on the highway, or people on the company campus – through presence-based location management. Or monitoring the status of the budget process, a document under review, or an insurance claims application. It’s a compelling vision: a single global presence network, available for people to collaborate around and in, and for applications to use as well.
The Coming War of the Stacks
The emergence of presence-based computing will upend architecture like client/server and the Internet did. Expect the same revolutionary turmoil, confusion, and vacuous advice.
Mobile devices, phones, and PCs will support presence natively, in the OS, or through presence sensing client software. People will expect smooth transition from various real time communication media: a single click to move from text messaging, to voice, to real time video – no matter what the device.
Bots – pseudo-intelligent agents, acting like people and serving as application interfaces – will have a brief explosion in use until presence and RTC services find their rightful home deep, deep in the application layer of the new enterprise architecture stack.
The instant messaging applications of two years ago have been fractured into separate presence and message services, and these are being lowered into the application services layer of the next generation enterprise architectures from Microsoft, IBM, Oracle, Sun, BEA, and others. This is the new battle field: perhaps the critical theatre of engagement. The IM companies that are not doing this will be dead, and the ones that do it best will survive.
In the next few years, all enterprise applications – ERP, CRM, SCM, and so on – will be reengineered to take advantage of presence, and their basic functions will morph to leverage RTC. Every contact in your CRM system will be presence-enabled, and every purchase order in your ERP system will presence link to the supplier.
Lower in the stack, real time processing requirements will force wholesale architectural reevaluation. Conventional database technologies may prove too slow for high volume transaction processing needed for real time applications. Witness the rise of in-memory event processing systems (from companies like Timesten) to manage Telco’s presence information for millions of subscribers and the transactional load in financial trading systems. Even lower in the stack, companies will find that the adding voice-over-IP, real time video, application sharing, and the huge volume of presence updates may lead to increased networking bandwidth requirements. Expect presence optimization at the router level, real soon.
Get Real
Even first generation IM systems offer significant acceleration of communication. This is the driver for its enormously fast take up: IM ramped to 400 million users worldwide faster than fax, cell phones, email, and the Web. Second generation systems being deployed now – based on untangling presence and messaging services – support integration into existing applications, like portals, sales force apps, help desk, supply chain, and so on. But the next generation – based on the emergence of reformulated enterprise architecture stacks – will drive an enormous transformation at every level of the enterprise architecture.
The number one item on the IT agenda must be this: Get Real. Companies will need to invest significantly to operate in the real-time economy, and will need to work with partners to link themselves into real-time ecosystems. It won’t be easy, cheap, or quick, but the value of the real time network is compelling and the heightened competition it engenders – in every sector – is inexorable.
