“Disruption” of existing revenue streams is a direct consequence of changing customer preferences and supplier capabilities in all markets where the global Internet meets local markets. At the same time, ubiquitous mobile broadband service and “social” applications now create huge new opportunities as well.
A developing “shorthand” way of describing all these trends is to say that something new will emerge, in the next era of computing, software and applications, from “mobile, social, local” underpinnings.
Some might wonder “what’s new here?” Don’t we already know mobility, global networks, new applications and devices are important? Don’t we already know lots of industries are being disrupted? Yes, we do.
But we easily can miss the implications because the words–separately–have an existing meaning. “Mobile” isn’t seen as terribly “new” simply because most people use mobile phones.
But that is not what is meant in the new context. Instead, what “mobility” means is that people can augment real-world experiences with digital experiences anyplace they happen to be. The implication is that such a blurring of offline with online, in a broadband, rich media context, for example, sets the stage for a different set of experiences, innovation and business opportunity than “people can talk on phones where they are.”
Likewise, “social networks” are viewed as something that is a “now” trend, not a “tomorrow” trend. And that’s partly true, if what people are thinking about is social “networks.”
Actually, social networking is part of something more fundamental, a recognition of the role played by social “software.” Nor is the concept foreign to communications professionals. Think of any “collaboration” application, from instant messaging to videoconferencing to document sharing. All those are examples of social software, where the value is created by people interacting with each other.
Play that theme out into every other area of human activity and you will find many arenas in which social processes already are in place to learn, conduct research, design products, uncover new needs, market products or provide customer support. Social “networking” is the wrong way to describe what is coming. Social software will apply collaboration deeply and in new ways in many areas of real-world life.
Likewise, the new shorthand for another important developing theme is “local.” But that term will always face the danger of misunderstanding in the telecommunications business, since “local access” is so fundamentally a part of the industry legacy.
But “local” in the new context does not mean “access.” It means that most things people do are based on where they are. And as digital experiences increasingly are melded with offline experiences, a whole new realm of possibility is created, with direct implications for many industries. The early buzz around “group shopping” firms such as Groupon or Living Social (we haven’t yet agree on what to call it) seems simple enough. It is a new way to get people to buy things.
But that is deceptive. The big conceptual question is what emerges, in terms of applications and new industries or industry segments, when the ability to augment real life with digital is assumed, when collaboration is assumed, when location, past preferences and context are assumed. Some would argue you have the glimmerings of a new wave of Internet growth and economic activity, bringing with it the very practical possibility of new services and applications that some within the ecosystem will be able to generate.
“Local,” in other words, now describes the ability to create brand new value, applications, revenue streams and industries based on the application of multiple technologies (broadband, cloud computing, social software, mobility, sensors, geo-location) to things real people do everyday, such as shop.
Here’s the analogy. As big as Google is, it built its whole business on shifting advertising from elsewhere, to itself. Ebay and Amazon built their whole business by shifting shopping from local to “the cloud.” So ask yourself, how many new industries can be created if one percent of $381 billion worth of U.S. monthly retail spending is shifted? That’s nearly $4 billion a month worth of revenue. Assume a company gets one percent of that as its own revenue. That’s $48 million a month.
That, by the way, refers only to the volume of stuff purchased through retail channels every month. Google has made itself into a giant simply by shfiting revenue related to convincing people they should spend some of that $381 billion one place instead of another.
The key thing is that something much bigger than we have seen will build as mobile broadband, social software and geo-location get applied in new ways to huge amounts of pre-existing human commerce. But remember that “mobile” doesn’t mean “voice.” “Social” isn’t restricted to “networking.” “Local” means “stuff people do where they are,” especially where commerce, or potential commerce, is involved. And it is the use of all the underlying technologies that matters, not just each in isolation.
If you want a glimpse of what is possible, follow mobile operators as they get deeper into mobile payments, mobile banking and mobile remittances. All those are examples of how “mobile, social, local” technologies get combined to create new real-world businesses. It is the flip side of “disruption.” Now telcos are aiming to disrupt other industries.
