‘Trying to Create a New Family of Businesses’
Robert Carberry, IBM
Robert Carberry is president of Fireworks Partners, a multimedia business and investment unit of IBM Corp. He presented one of the conference’s more humorous moments when he rolled a two-minute videotape showing on-the-spot interviews with individuals at a trade show who were asked the question: What is multimedia?
Things that make you go “ummm.” Nobody had a really good answer to the question. While it was a hoot to hear the hemming and hawing, their responses were — and are — an important reminder that in order to create critical mass for these emerging technologies, someone has to be able to tell us not just exactly what these devices and applications can do, but why we should care about them. People who don’t work for Apple or IBM or Microsoft or Sony might actually want to buy a “PDA” or a “smart television” or an “interactive entertainment CD-ROM disc,” if only they knew what they were good for.
TO LEARN THE MARKET, IBM CREATES SCENARIOS
In order for IBM to reach these potential consumers, the company has attempted to define this emerging marketplace through “the paradigm of vignettes,” according to Carberry. In other words, IBM has created specific scenarios in the home and office that show how these technologies might work.
Carberry presented four computer-simulated vignettes of the future — and, we have to say, badly simulated, especially considering that the company sells an enormously expensive Power Visualization System for just such high-end imaging applications. Between each scenario, Carberry outlined which of the technologies shown in the animation are either in prototype at IBM or are real products today.
Desktop video conferencing.>> In the first, which technically is not far from reality, the personal computer has evolved into a voice-activated, flat-panel display with touch-screen capabilities, a video telephone and connections to online information services built in.
To date, IBM can deliver, at least in part, on the promise of personal video conferencing and the customized news service. The IBM VCS-1 technology enables person-to-person communication over local area networks through standard phone lines. According to Carberry, the company is working on improving the quality and speed of the video.
Gigabit over fiber.>> IBM is also working on “collaborative video conferencing” that can link up to 2,000 parties simultaneously. Carberry briefly demonstrated three people using the system that operates over a one-gigabit wide-area network (WAN) running over fiber. (IBM has deployed one of these WANs in a test with Rogers Cable.)
IBM has also begun to deploy — on a smaller scale — its personalized online news service called NBC Desktop News, which was created in collaboration with NBC (see Vol. 2, No. 7, p. 25). Four pharmaceutical companies in New Jersey are to date the only test sites for the service.
The economics are here.>> The benefit of such services, said Carberry, is that once a site is operational, other services can be installed and operated at a much lower cost to the user. And, Carberry said, IBM will soon be able to deliver both the speech-recognition technology and the type of flat-panel displays shown in the simulation.
FORGET DICK TRACY; IT’S MAX SMART’S SHOE PHONE
The second vignette had all the qualities of an episode from the old TV series Get Smart. The main character of the animation is in the airport waiting for his flight. He opens his “wallet” — really a pen-based personal digital assistant — and begins jotting down notes about his business trip. Then he pops a credit card-size disc into its side, and a voice-activated language lesson begins. Then the wallet starts to ring. The character flips it over and it becomes a phone. Somehow, while he is talking, he is also taking copious notes on the other side of the device.
Right.
Carberry said this simulation isn’t as fantastical as we might think. IBM has prototyped a personal digital assistant that is the first in a series of devices that will fall under a new umbrella group within IBM called InTouch. The first device, which will go into a market field trial later this year, is slightly larger than a cellular flip-phone and is based on touch-screen technology. The initial prototype will be able to maintain a calendar and receive weather information, sports reports and real-time stock quotes.
LIFE IN THE AIRPLANE WILL NEVER BE THE SAME
People who fly are a captive audience, so to speak, and IBM has decided to use them as a focus group. In the third IBM vignette, our simulated man, who is now in an airplane, slides a credit card along the side of a screen installed in the seat back in front of him and a menu appears with the names of major newspapers, movies, games, drinks and fee schedules. The character, with a touch of a finger, can select from the menu.
Reality is not far afield. Both USAir and American Airlines, in conjunction with IBM, have installed computers into the seat backs of a limited number of their airplanes. According to Carberry, these test planes are no more than local area networks with 270 nodes, allowing individuals to share information, access multiple video titles, shop, play bridge together, and, if they’d like, maintain phone contact to the ground throughout the entire flight. He said that it would soon be feasible for people to have “electronic mail access straight to the seat back.”
To date, IBM’s airborne research has been limited, but Carberry says a large number of people are selecting the merchandising applications to shop electronically. (Yes, but do they buy?)
THE MAN FROM COUCH POTATOE
Similar to Apple, IBM has its own version of the virtual mall. And, similar to Apple, the company went for cute when naming this particular emerging technology group (at least for the sake of Carberry’s presentation): Consumer-Oriented User-Connected House Division (that would be COUCH). And of course, in conjunction with COUCH’s launch, Carberry announced the development of a handheld device to help consumers navigate the electronic mall. It is the POTATOE, for “Personal Online Terminal and Transaction Operating Environment.”
While Carberry did not detail IBM’s plans in this area, he said IBM believes it is important to understand the difference between an individual who is ready to buy and one who is ready to shop.
“When you are ready to buy, you know what you want and don’t want to go through exotic navigation,” Carberry explained. “But if you are shopping, you might like a reference person or collaborator to help you make decisions.” To that effect, IBM is working on ways to enable friends based in different locations to go on a virtual shopping spree together. It is good to note that IBM is also developing a debit card that has a limited cash value, so that parents can set limits for their children, for instance, when they are not home to watch them.
INTERACTIVE MUSIC KIOSKS SLOW TO CATCH ON
In closing, Carberry turned to the on-demand entertainment system IBM is developing with Blockbuster, Soundsational and New Leaf. The concept is to install interactive entertainment kiosks in music and video stores so consumers can press music or video CDs while they wait (see Vol. 2, No. 9, p. 8). The companies involved believe these new systems will dramatically reduce manufacturing and distribution costs.
Perhaps more importantly, though, these kiosks are an excellent vehicle for selling related products such as concert tickets or T-shirts, both of which can be purchased while the discs are being pressed.
Wooing the content owners.>> “The approach we are taking is to go to the content owners and say, ‘We know you own the content; we know you have the rights; we know you have the relationships with the retail outlet and artist, and we don’t want to get in the middle of that’,” Carberry said. IBM and Blockbuster were publicly humiliated after the announcement of the Soundsational system, when record companies pointed out that neither had asked their permission to use the new distribution system. “The technology is such today that we can take a substantial amount of your distribution cost out. Come try it.”
So far there has been only one taker — a Russian rock band called Snow Hat.
Laying the foundation.>> Carberry is not discouraged. He sees this as a time of infrastructure and alliance building. “We are putting collections of businesses in place,” he said. “Once these infrastructure businesses are established, one can simply take and change the content and the retail outlet and create a whole new other family of businesses. That’s what we are trying to do.”
Janice Maloney