3:00 P.M., EST
NEW YORK FOREIGN PRESS CENTER, 799 UNITED NATIONS PLAZA, 10TH FLOOR
MR. WYETT: All right. Well, welcome to the Foreign Press Center. I’m pleased now to announce a panel today on the technology trends of 2012, what to look for.
Real briefly, starting at the far end of the panel, we have Doug Heintzman, director of strategy for IBM’s collaborations solutions divisions; next to him we have Jaafer Haidar with Synacor; Kimber Myers with social networking GetGlue; and finally, our moderator, Donn Morrill, executive director of the New York Technology Council.
So Donn, go ahead and take it away.
MR. MORRILL: Great, thanks. I want to start by thanking the Foreign Press Center for inviting us here. Alyson and Jonathan did a great job of putting the panel together, and looking forward to talking to everybody.
Real quick, the New York Technology Council is a trade association based here in New York dedicated to the furtherance of the technology industry. We’ve got about 400 member companies and sponsorship from organizations such as Google, IBM, Verizon, and several others. We do about 50 or so events a year educating the community on technology issues and helping the technology industry grow here in New York.
When I was asked to put this panel together, my approach was really to divide the technology industry into several subsectors that I thought were kind of hot growth areas in the United States today. And so I selected social media, and that’s going to be represented by GetGlue; digital media, which is going to be represented by Synacor; and what I’ll call everything else, which is going to be represented by IBM.
But what I’d like to concentrate on is three areas with IBM: enterprise services, cloud computing, and then this thing called big data, which you may or may not have heard of, and hopefully, Doug will be able to spend a little bit of time talking about what big data is and some of the trends we’re seeing.
And so with that, I’m going to ask each panelist in turn to spend about five minutes introducing themselves and talking about some of the big trends that they’re seeing in their industry, and we’ll start with Kimber with GetGlue talking about social media.
MS. MYERS: Hi. I’m the director of partnerships for GetGlue. We’re a social network for entertainment with over 2 million users across the world. About 65 percent of them are Americans. We have 35 percent across the world with large concentrations in countries like the UK, Australia, and Brazil. GetGlue encourages you to check in and share what you’re watching, listening to, or reading by our apps or website. And there’s a great social component there of connecting with people who are watching the same TV show that you’re watching or reading the same book that you’re reading, as well as an element of discovery.
We offer personalized recommendations on both a weekly basis with things that are coming out in theaters, books that are being released, albums for those that still listen to albums as a whole, and then you also get them when you like individual things. So you can have all your likes aggregated over a period of time and get these great, incredibly personalized recommendations that really get to the heart of what you love in entertainment.
We’ve partnered with over 75 different networks as well as a number of different movie studios and music labels to reward people for their check-ins. So you’re not only getting that social element of talking to other people about these shows and movies, but you’re also getting rewards. And the central GetGlue reward is a sticker. It’s actually a digital sticker that lives on your profile as well as physical stickers that we send you in the mail at your request across the world. And it kind of hits at that fun element from when you were kids, that desire to collect as well as that desire to compete. It kind of hits the sweet spot there.
So we’ve seen huge growth, as with a lot of other social networks, where we’re seeing some really great activity among our users who actually use our service more the longer they’ve been on the service, which is a great indication that they’re finding value in what we do. So say on a Sunday night – Sunday nights are really big for us; TV is our biggest area. So on a Sunday night, you can see that there are tens of thousands of people checked into Game of Thrones and talking about the show. And then at 10 o’clock, there are tens of thousands of people checked into Mad Men and connecting around the great, witty dialogue that was just said by one of the characters or talking about the costumes.
So it’s really – it’s a nice way for the digital water – the water cooler to be made digital. You no longer have to wait until the next morning to discuss what’s going on on your favorite show. If you’re watching it alone on your couch, you’re not actually watching TV alone; you’re watching with tens of thousands of other people who are watching the same thing that you are. We’re really proud of the fact that there is great conversations happening around these shows, and we’re really doing interesting things to surface those conversations through our products as well.
So again, just to kind of reiterate, GetGlue does a great job of connecting people not only to their entertainment, but also, since we’re a social network, really connecting them with other people who care about the same things, whether it’s on a Sunday night, I’m talking to my sister about Game of Thrones or there’s someone in Seattle who’s made a really great comment and I’m able to respond to them. So it forges new connections with both entertainment and new people.
MR. MORRILL: Thanks, Kimber. And Jaafer, tell us a little bit about what you’re seeing – what your company is doing and what you’re seeing as trends in the digital media space.
MR. HAIDAR: Sure. So Synacor powers online experiences in over 49 of the largest medium-size and small-size telcos, cable companies, and media properties in the U.S. So these are branded. If you go to one of our client’s portals or an online experience, all that – we bring a lot of the content, the infrastructure, we partner with over 70 different content providers, large media, gaming companies, et cetera to bring a holistic, really portal and online experience where somebody goes, gets their news, gets their games, gets their email authenticated once, and they get all of their stuff in one spot.
And increasingly now, looking at that across the mobile universe, connect to TVs, online destinations as well; over 20 million users, tens of millions of homes around the U.S., also in Europe, and increasing our footprint. So on one side, we provide the infrastructure, the framework, and a lot of the portal online experience, and on the other side, we partner with a lot of the greatest media companies and gaming companies and email providers and et cetera to bring that one stop to what the user wants – popular content and tools. What we’re seeing – oh, and recently, we went public, so that’s probably in the news and you guys will see all that. (Laughter.)
So what we’re seeing is a trend of ubiquitous entertainment, ubiquitous content, being able to get the stuff that you like, whether it’s movies, TV shows, music, news anytime and anywhere you want it. And so a dual strategy within Synacor is to power the TV everywhere experience so you will help our partner providers, the – I’m going to name-drop, but the HBOs and the Hulus and those of the world serve as premium content while we handle the authentication.
And so when you go and you see this great show that you never would have saw online unless it was pirated, it’s now there legally. When you go to watch it, then we will handle the authentication to say, well, who’s your cable or satellite provider or et cetera. And so what that opens up is a whole new world of premium content online legally that’s authenticated, and we handle the middleware while also then bringing other types of great media experiences, music, gaming, et cetera, and making that ubiquitous for people to get online. And so what we see there is that people want that. People want to be able to get the content that they like online anytime, anyplace, on any device.
And so this movement towards – and cloud is such a mainstream word now, but it depends in context. So cloud from a consumer perspective is – I can go to the internet or I can go somewhere and get what I want. And I don’t want to step on your toes, but cloud for me – cloud computing is big data, doing a lot of computing in the cloud, and that kind of stuff as well. But we look at it more from a consumer and a content-driven perspective of being able to provide to the user – or us through our clients – our clients being able to provide to the user what they want, no matter what device they connect to and no matter what that content is, and being that bridge in between to make that happen.
So I think that’s a huge trend in the industry, where you don’t want to be tied to your device. You don’t want to be shackled to one thing. You want what you want, you want it anytime you want to get it, and we’re working to facilitate that.
MR. MORRILL: Exactly. Thank you. And Doug, in five words or less, please tell us what IBM does and –
MR. HAIDAR: Sorry. (Laughter.)
MR. MORRILL: -- if you would, talk specifically about cloud computing from an enterprise perspective and perhaps touch on big data a little bit if you would, also.
MR. HEINTZMAN: Sure. My name is Doug Heintzman. I work for IBM. We went public 101 years ago. (Laughter.) We do business in 176 countries in the world. We have annual revenues in a little bit of excess of a hundred billion dollars a year.
I have specific responsibility for strategy for IBM’s collaboration in social business technologies, but I am also a member of our company-wide strategy council and participate in strategy formulation across many attributes of our business. It’s – we have had the luxury in the last 101 years of seeing some very significant disruptions hit our marketplace.
We started in business making meat slicers and productivity tools around various different basic industrial processes. Of course, we witnessed the disruption of numerical counting machines, and of course, of various different kinds of technologies, and even inside the computer era, ranging back to the early 1960s, many significant disruptions in fundamental computing technology and software and networking. And we view ourselves on the precipice or a few centimeters into a very significant new platform taking hold that really has the potential of substantially impacting pretty much every aspect of our respective economies.
And it’s really founded on five major big technologies and the convergence of those technologies, one of which is – as you mentioned, is the cloud technology, and kind of the next generation of internet and web technology, where information and services really become available and re-combinable and accessible to anyone from anywhere at any time in any number of different configurations, and accessible across any number of different kinds of devices. And that pervasive connectivity and pervasive aspect – access to those services in the sky, so to speak, really have a potential to transform any number of business processes.
Second of all, mobile. Mobile is a really significant disruptor because it allows for people to interact with systems to get efficient access to very timely and accurate information to make much better quality decisions. And this goes to a very important underlying capability to incrementally and incidentally interact with business processes.
Third of all, there’s the issue of big data and big data in analytics. This is a really, really important phenomenon. We are generating vast amounts of information, and that information is being gathered because the cost of censors and the cost of accessing information from those sensors, whether they’re weather sensors or whether they’re GPS devices or whether they’re temperature sensors or whether they’re inventory control sensors, the cost of capturing that information and transmitting it and aggregating that information has fallen so dramatically that it gives us access to these vast, vast, vast pools of information, extraordinarily large amounts of information, and so much of it increasingly held in unstructured kinds of ways.
And with that vast amount of data in hand – and by the way, some of that data is captured by not only employees, but by citizens. When you walk around with your iPhone, I think, there and you take a picture of a pothole or of a piece of graffiti and you report that to the local city, that is – you are a sensor. You are capturing environmental information that can be incorporated into a business process and prioritized. And so it’s very, very highly disruptive and it promotes an engagement mechanism.
Analytics gets built on top of that, because what the analytics do is it allows us to discover important hidden patterns, and of course perhaps the most famous and tangible example of the potential of this technology to really, really transform the way that we all live is the Watson super computer that played Jeopardy about a year ago. And we’re now taking that Watson technology, the ability to do what we call deep Q&A, to intersect these huge data sources that are full of all this instruction data and discover truths and patterns that are there and deploy them.
Right now, we’re going through a process of commercializing this technology, and the first industry that we’re spending a lot of energy on is the healthcare industry to do evidence-based medicine, to do – to be a diagnostic aide to physicians to figure out what the issues are and what the prescriptive treatments are. Can you imagine a computer that’s read every single medical journal in the entire world, has read every single report about every single case and can incorporate all that information and synthesize it and provide those kinds of insights and recommendations to physicians? It has the potential of dramatically altering the cost profile of that industry.
And the other pillar is social business. Social business – and we talked a little bit about the social attributes – is a very interesting new disruptive capability, because we’ve spent most of the last 30 years optimizing business processes through the implementation of information technology and kind of systematically encoding the nature of efficient processes into software systems. But we’ve always missed out on the human element. And there’s really an amazing amount of ad hoc communication that happens between people inside of a process and between processes.
And there’s fundamentally two different kinds of innovation. There’s breakout innovation, which is a brilliant scientist sitting inside of a research facility that comes up with some great insight and invents something and really changes the world because of that invention, and – but there’s also continuous innovation, the incremental innovation that we all participate in, that we all have an idea or an insight, or that some other idea has provoked our thinking about something and we’re able to capture that and share that and all of the social interaction that happens around it allows us to tune and tweak various different processes in business, in government all around the world in these incremental ways.
And the aggregate of that innovative potential that can now be engaged because of social technologies, because of mobile devices that allow us to capture that information situationally, and because it feeds up into these big data systems with these analytic engines that allow us to get deep, deep insight and make much better quality decisions and then coordinate those activities across the cloud with lots and lots of participants at a very, very low cost basis – these things collectively have the potential of creating a new platform for a completely new kind of economy with radically different productivity rates.
MR. MORRILL: Thanks. So what I’d like to do now is ask one follow-up question to each of the panelists, and then we’re going to open it up to the floor for some additional questions.
Kimber, some of the trends that you’ve talked about and that we’re seeing in the social media space are specialized versus generalized social networks. So we have general social networks like Facebook and Twitter. We have more specialized social networks, such as LinkedIn, which is more of a business-oriented social network, and then yourselves, which seems to be more of a media-focused social network. But why don’t you talk a little bit about what you’re seeing in terms of specialization when it comes to social networks?
MS. MYERS: I think there’s great value in both kinds. Twitter and Facebook are wonderful. They can allow you to connect with a variety of people on a variety of topics. My – but my LinkedIn profile is very different. I mean, as much as I want my personal Facebook profile to be totally personal and mine, it’s – I mean, obviously, it’s public to a certain degree, but LinkedIn is this great way that I can put my most professional face forward, and someone who might be looking to connect in a professional way won’t necessarily see that I am posting obsessively about college football in the fall. It allows you to really specialize, either consciously with something like LinkedIn, or with Facebook, where you don’t have to be as specific.
With GetGlue in particular, we found that it’s a great way to really draw people in around media. Force – or excuse me – Twitter has 140 million users. We have about 2 million, but we see a significant amount of activity for shows. Sometimes it’s greater than Twitter’s activity, because people know that they can come to GetGlue for this specific thing.
MR. MORRILL: Great. Jaafer, one of the things that digital media has been portending for several years now is what I call the death of linear programming. So in the old days, you had program directors on the major networks and they said this show is going to run at 8:00, this show is going to run at 8:30, this show is going to run at 9:00, and these are the shows you’re going to watch; if you have a VCR, maybe you can tape it.
MR. HAIDAR: Right.
MR. MORRILL: Are we at the point now where we’re going to see perhaps two, three, five years from now, the death of linear programming, and video and entertainment is going to be delivered purely on demand?
MR. HAIDAR: Short answer, I don’t think so. I mean, that’s been spoken about at length for a number of years now. Actually, it’s like we – GetGlue is – if you look at a show like Jersey Shore that’s a popular show on MTV and – (laughter) –
MR. MORRILL: Hypothetically. (Laughter.)
MR. HAIDAR: Yeah – no, no. Actually, specifically I’m referencing Jersey Shore because when you think about that show, people of that age group of the teenage, young adult age group now refer to Thursday night as, instead of Thursday, Jersday, because they actually get together to watch that show at the time that it’s being broadcast, the linear broadcast. And so there is this element of social engagement and the social aspect of coming together with your friends to watch this show and then talk about it and et cetera.
Now at the same time, definitely DVR, on demand is massive and growing. And we’re going to see new business models and new content, premium content pervasive across all devices, and – which is why we’re pushing the TV everywhere strategy. But I think it’s complementary. I think you’ll have – it really depends on the segment of content, so movies – for example, you might see movies more on demand and that uptake going on, but new, fresh content – people want to be engaged in that atmosphere, in that story, in the water cooler moment the next day or at the time of the show and et cetera. So I think it’s complementary.
I don’t – yes, in movies and Netflix is showing a great growth and – even across our platform and the search and discovery that we power and we authenticate against, yeah, you see that uptake of people wanting to watch content at the time they want to watch it and not being told. But linear programming, I don’t think, is going anywhere. I think it’s going to be more of a complementary approach, and overall just being able to get your content either at the time it’s broadcast, later on, wherever you want to get it, being able to get that from a specific source. And our job is to be able to enable people to do it seamlessly and not having to figure out who has which content. Synacor basically says you want to watch this show, come here, click on the show, and then we’ll tell you where you can get it and make that easy.
MR. MORRILL: Great. Thanks. And Doug, you did such a great job. As I was formulating questions in my mind, you were answering them on the fly. (Laughter.) But let’s explore a little bit the convergence of the five points that you mentioned: cloud, mobile, big data, social business, and pervasiveness. Let’s look a couple years into the future right now when that convergence really starts to happen and you’ve got access to anywhere, computing power on the order of a Watson and the availability of data sets, Human Genome Project, census data, whatever it happens to be – what is that going to look like two or three years from now? What are some of the applications that we’re going to see?
MR. HEINTZMAN: Well, of course, the answer to that question is going to be quite different depending on what industry we’re talking about. And interestingly enough, I think that a bunch of industries are going to change their definition.
I’ve recently been spending a lot of time working on engineering life cycle and how do we conceive of an idea, design a product, manufacture it, test it, do acceptance testing, and then hand it off to the marketing and sales department to distribute around the world. And there’s been formal processes that, frankly, have been in place for most of the last 40 or 50 years, but the cost and barriers of getting access, deep insight into what’s going on in the supply chain, what are the costs of the underlying natural resources and where are they projected to go, and what impact it will have on your manufacturing capacity. So integrating of the backend, in the actual design phase, working with different design partners around the world in different countries to incorporate different ideas and work on different subsystems and bring them all together – the barriers to that kind of cooperation have fallen so dramatically that it allows for very cost-effective combination of highly optimized skills in that design process.
Same is true of the test – the manufacturing and testing and implementation and integration processes, but think of it extended right down through the marketing, sales, and the actual implementation and support issues, so that when I’ve got a technician that is on the runway and notices some discoloration on a wind – on a turbine inside of a jet engine and has an insight about why that might be happening, that they can capture that.
The fact that they capture that finds its way through all of those points of interconnection back into the people that are doing the design and acceptance testing and they make some observations and validate something and it turns out to be an alloy issue and the guy’s guess was right and then that moves right back into the supply chain – well, suddenly we’re not talking about the traditional process where I was working on this part of the equation. It that’s we, collectively, as this big, long, extended, interconnected network, including my customers who become my partners because they want my products to succeed and they want to give me input in terms of how I make a better product that’s more cost effective and more valuable for them – incorporating all of those things into that process fundamentally changes the nature of those processes.
So we’re going to see some really big changes. And I think that that same kind of model will find its way into telecommunications, into chemicals and petroleum, into healthcare, right across the board. We could discuss each one of them in turn – (laughter) – but profound changes.
MR. MORRILL: Excellent. Thank you. Let’s open it up to some questions, please. Anyone?
QUESTION: Can you tell us about (inaudible) – you need that? Okay. Just – I’d like to know a little more about the cloud and how people use it and what’s being offered with it.
MR. MORRILL: Sure. Doug, you want to take that one?
MR. HEINTZMAN: Sure. So the cloud has a number of different dimensions. It has dimensions that my colleagues here have talked about in terms of the social attributes of allowing individuals to get together and create communities of interest and interact with each other very efficiently with very, very low cost. But the cloud is also being used to – inside of companies, so this thing we called cloud technologies is really a description of some provisioning technologies, some systems management technologies, some shared resource technologies. It’s a combination of underlying technologies that are collectively known as the cloud.
And there is the public cloud that most of us are familiar with, and public cloud services like eBay and Amazon and Facebook. These are all public cloud services. And then there’s a bunch of business public cloud services as well, and my company has a number of those in retail and in healthcare and in lots of different places, where groups of companies get together and coordinate their activities by using these shared resources. But then an awful lot of the cloud utilization is actually somewhat invisible to most people and happens inside of companies and inside of governments. So, I mean, in the U.S. Government, there’s a big initiative to deploy all the services that support all the various different attributes of the government using common cloud resources. And there’s some economic efficiency reasons to do that.
So it’s really used pervasively across pretty much every single industry, and there’s this big consumerization attribute of the cloud that we’re all familiar with, and downloading music and uploading our comments about it and all that kind of stuff. But an awful lot of the real value that’s being created, the monetizable economic value, is actually happening in a way that isn’t terribly visible to most people. It’s not the stuff that’s in the headlines; it’s what’s going on behind the scenes. It’s allowing governments to be more efficient in and of themselves, to engage their citizenry with all this new input as kind of remote sensors to interact with other governments and other departments and other businesses to coordinate those activities with degrees of efficiency and transparency that were never possible before.
So the cloud is kind of one of those things that is kind of underlying all of our lives in a way that most of us don’t really appreciate.
MR. MORRILL: Do you want to –
MR. HAIDAR: Yeah. The enterprise cloud and all the value that that brings is something most of us don’t see. What we’re in the business of right now is more what you do see – the consumer cloud, right? And when we talk about the cloud, the way we look at it is, right now, you’re used to downloading an app and putting it on your phone, right, and that’s where you use it. If you don’t have your phone, you don’t use the app. We’re seeing a movement and a shift towards native, downloadable applications to a phone or to a tablet, and those companies that build those applications actually building them so you can just go and use them through a browser, right? Angry Birds is one of them. Angry Birds is a game that started downloading on your phone. Now you can go and play Angry Birds online.
And we’re seeing – you started with email, you can go to a friend’s house, log in, and check your email. Then storage – with a lot of the storage companies, you can upload a file and be able to get that file everywhere. What we’re seeing now is a shift towards not only email and storage and information bits, but really, the entire application, so games, music, movies, productivity applications, apps in general moving all to the cloud so that I can just go and grab any device, log in through a browser, and have my world there.
And so in the enterprise cloud – tremendous amount of value, tremendous amount of traction, I think, way more than the consumer cloud to date. And whereas most of us have been looking at the cloud in terms of data movement, so even iCloud and those kind of things, really install an application and it gets installed on your other device, that’s really just data moving. But the entire shift of everything moving to the cloud, so you’re not actually tied to a device, is really, really exciting.
And you’re going to see more – HTML5 is the buzzword – HTML5 applications. People are building their apps in HTML5, increasingly so. So one day we see a world where you go online and everything that you have lives there. So I can go to your house and I can log in on your computer and get all of my stuff. I can log out, you can log in, get all of your stuff, and it’s seamless.
MR. MORRILL: I think this Siri product from Apple is probably one of the best manifestations of that that you’re talking about. Obviously, your iPhone doesn’t have all the knowledge behind it. When you ask Siri a question, it’s really just a lightweight front-end to the cloud, if you will. And so you ask Siri any type of question, it does some language processing on it, but then it’s smart enough to go out to the cloud, ask the question of the entire internet, if you will, and then kind of bring the answer back to you. So that’s just kind of one manifestation of it.
MR. HAIDAR: I think that – yeah, and that brings up a good point because that is a combination of a native application using the cloud for data processing and data. And actually, almost every application that you have on your device – YouTube, for example, I can watch the videos I watched before when I was connected. But if I try to get a new one, I have to be connected. So most, all applications are going to the cloud for data. But then the next level is the application itself being in the cloud.
MR. MORRILL: Right. Exactly. Other questions? Yes, sir.
QUESTION: Yes. My name is Neeme Raud, Estonian Television. Looks like the technology market is constantly expanding. It looks like the market is full and then there is a new idea coming up. What are the new ideas the market is waiting? And for the start-ups, like in our country had a lot of – and in Silicon Valley, what are the ideas the market is waiting kind of?
MR. MORRILL: That’s a good question.
MR. HAIDAR: I’m going to start on that.
MR. MORRILL: You’re going to wait – yeah, I mean – (laughter) – what’s next for GetGlue? What are some of the innovations that you guys are working on that you can speak about? We talked about localization services, for example.
MS. MYERS: Yes, so localization right now is huge. We have some elements of that in ours, whether it’s – you can not only check in to a movie while you’re at the theater, but you can also do a Foursquare check-in, so you’re doing that, that double one. So you can add some context there. But a lot of apps are really doing amazing things, since everybody has their smart phones. My technophobe mother has a smart phone, and that’s – the great expansion there is that it’s allowing a huge level of personalization that wasn’t there before. I think we’re going to see expanded personalization in the future.
Specifically for social TV, this year I think it’s going to be amazing. We’ve been growing over the last two years. Additional groups keep joining the space, which is exciting. It says that we’re doing something right and that there’s a lot of room for people to figure out what viewers want.
MR. MORRILL: But Doug, can you speak to the internet of things at all?
MR. HEINTZMAN: Yeah. Well --
MR. MORRILL: I think that’s an interesting trend. You said anything, so --
MR. HEINTZMAN: Well, but let me do a couple trends. I think that’s part of it, and part of that platform that I was talking about, based on those kind of five attributes, is very much about the internet of things. But I think maybe one of the best ways of kind of capturing the essence of the question really has to do with innovation. And I talked about breakout innovation and continuous, incremental innovation. The breakout innovation is being significantly impacted by computing as well.
We have got an awful lot of efforts going on in what we call deep computing, massive supercomputers that are allowing us to model things in the way that we – you think about taking – you’ve probably seen pictures of how computing affected the automotive industry, so that instead of kind of carving a model in clay and then building a prototype and crashing it into a wall, you could actually build the whole thing in software, model it, and then do wind tunnel testing and thermodynamic testing and shift over the foil this way and move the wheels that way and figure out how stuff – and you could suddenly turn a multiyear development project into a couple of months and end up with a much, much better quality car.
The same kind of process, just using a lot more computing power, is being applied to pharmaceuticals and drug testing and trying to find cures for cancer, understanding viral interactions, and one – for example, another good example is the Battery 500 project that IBM is leading where we are trying to build – it’s strange for kind of a – you’d say why in the world is an IT technology company trying to build the world’s most sophisticated battery, a battery that will move a car – power a car for 500 miles on a single charge, and do so at a price point that is accessible and affordable? And how completely disruptive would that be?
Well, it turns out that to build what’s called a lithium air cell, you need manufacturing technology that understands how to do carbon nanotubes, which is some very sophisticated, high-tech stuff. And you need a lot of deep computing resource to understand what kind of catalysts will allow certain kinds of chemical reactions and ion movements to happen at certain rates and be moderated. And it’s extraordinarily difficult and complex and time-consuming to do that experimentally, when we can model all of those interactions and try different things using this deep supercomputing power that allows us to come up with these really big breakthrough innovations that have the potential of having enormous impact across all of our economies and societies.
The other side of that, going to the internet of things, is the other part of that, the incremental, continuous innovation that all the objects around us increasingly have intelligence and connectivity. Because the cost of both the intelligence and the connectivity have fallen so dramatically, it starts to make sense. Not only that; we ourselves as human beings are amazingly sophisticated sensor arrays. We have eyes and ears and we’ve got tactile senses, and we’ve got pretty good preprocessing units that allow us to integrate a lot of the things that we observe.
And now, with the help of these mobile devices and those cloud services that can process that information and then – and catalog them and align them with other pieces of related information, we now have the ability to capture all of that sensory input in a very incremental way, all of those observations that collectively represent an enormous amount of kind of iterative, continuous innovative capacity. And so this really has the underlying potential, the internet of things, including us as the agents or the adjuncts of those things, to actually participate in a completely new kind of economy with dramatically different rates of innovation.
MR. MORRILL: Great. Other questions?
QUESTION: Hi, guys. I was reading online – oh sorry. Matt Murphy from The Age in Australia. I was reading online recently about the SixthSense, which I’m sure you know about, but won the TED prize for innovation. So basically, it’s a computer which is strapped to your belt and a camera and you can do everything from kind of putting a book in front of it and it will tell you whether you can buy it online or things like this.
In terms of big data and what you were talking about before, I mean, is that something that I’m realistically – we could all be walking around with in five years’ time, I mean, the ability to project onto a blank piece of paper and have our own kind of iPad?
MR. MORRILL: We definitely can be. If we want to is another question. There’s a whole topic of research now around what’s called augmented reality, which is exactly what you’re talking about. It kind of helps you – helps guide you through your everyday life. And whether that’s in the form of an eyepiece or perhaps it’s in your phone somewhere, there’s applications out there right now where you can hold up your phone and start the video and it will overlay directions – where’s the closest washroom, where’s the closest elevator – and it’ll do that for you.
So that’s a great example of a combined, probably, local app and a cloud app. And I don’t know if you guys are doing anything in the AR space --
MR. HEINTZMAN: Well, actually, (inaudible) another attribute, because you’re quite right. The whole area of augmented reality is really interesting, and it’s not just the holding things up in front of the museum and seeing what the exhibits are, which is a wonderful facility, but those experiences need to be very situational, very context-oriented, very specific to you and your situation, because there is so much data that it’s completely overwhelming.
So what’s amazing is not just that piece of paper, or the display technology, or the mobile device that allows you to hold something up with a camera and overlay it with information. It’s actually – so much of the magic is actually invisible to all of us. It’s those backend systems that are sitting there saying, oh, you were this person, at this location, looking in this direction. You are likely to want these kinds of information, right? Because of the knowledge that we’ve extracted from this social network and these data sources, we’re recommending – this bunch of information is probably the thing that you’re looking for. That makes that experience really exciting, really engaging. Just presenting people with vast amounts of data is completely overwhelming and not terribly useful. So much of the magic of making these next generation systems work is going to be the heavy lifting of those big data and analytic systems that are going to figure out what exactly you’re trying to accomplish and help you do it.
QUESTION: So it’s a tool.
MR. HAIDAR: But what’s really interesting, what’s really exciting in the – on the gentleman’s question before is how much innovation happens because of these kind of things. Like, because you can plug into a cloud database and a cloud service and a cloud system that another company provides, two guys in a garage in Silicon Valley can start working on this idea that they have. And a lot of these ideas don’t make it through, they get lost, or they get picked up and pivoted and do something else, and we realize them without realizing them as consumer products.
But I spend a fair amount of time in Silicon Valley here down the street in Union Square where a lot of these young – myself included – I mean, I was, not so long ago, a start-up myself – so the amazing amount of stuff that is happening on the grassroots of innovation in these incubators that are popping up all over the U.S. and into Europe and into Asia, I mean, it’s a phenomenon that we’ve seen now in the last, I’d say, four to five years where you have all of these incubators like TechStars and Y Combinator and the rest of them that are giving life to 15, 20 companies that are being built on $20,000 with – across three technical founders and a lot of mentorship. And so you’re – we start to see things that all of a sudden one takes off, but it was being developed over the last three years with a lot of this economy and this support system that I think is really, really unique in some respects in Silicon Valley, but now have permeated across the U.S. and driving innovation.
And if you look at the first e-commerce wave in the ‘90s and what that meant to the economy in the U.S. first and then it permeated throughout the world – well, some of it in the U.S. first, not all of it, obviously, a lot going on around the world – but – and now you’re only seeing – you’re almost seeing a second wave of disruption within that same digital world. So Amazon is – was the king of e-commerce, probably still is the king of e-commerce, but now you’re seeing other applications like Pinterest, a lot of people buying off of Pinterest, so what is the disruptive wave of e-com, and what was the disruption of the traditional business models. It’s phenomenal. I mean, getting into the grassroots and seeing what people are working on and the ideas that they have, and some of them, like augmented reality or being able to identify an item and seeing where you can buy it, et cetera, some people are working on things people don’t even want. But it’s just that brilliance of innovation that’s happening.
MR. HEINTZMAN: I think you’ve touched on a very interesting point, both in the question and in the answer you just gave. It used to be that there were reasons that companies got together and put a whole bunch of people together underneath umbrellas – real estate umbrellas, intellectual property umbrellas, legal umbrellas – getting the critical mass of innovators and developers and marketers and sales people and getting them all focused and aligned, allowed for degrees of efficiency of executing economic activity. Something amazing is happening now because we’re getting access to infrastructure that typically only big companies had access to. It’s allowing much smaller economic actors to combine their respective skills and do things in a highly specialized way but combine their skills and coordinate their activities in pursuit of meta – bigger goals and behave – with the efficiencies, behave like bigger companies and yet still preserve some of the nimbleness and ability to specialize that is an attribute of smaller companies.
And a lot of this cloud infrastructure and the coordination of some of the social technologies in support of that are allowing that companies and innovators and startups to start leveraging those communities of coordinated interest. And because of that, our potential to create value, to create employment and economic activity will accelerate, and a lot of the barriers to entry, not just in – because there was some technological barrier to entry, but the structural barrier to entry, because of the critical mass issues, will start to fall away. And I think there’s going to be some really, really interesting potential as economic actors from around the globe start to increasingly assemble their specialization to create increasingly valuable (inaudible) goods and services.
MR. HAIDAR: Good point.
MR. MORRILL: Other questions? Yeah, sure.
QUESTION: This is for Jaafer. Why do you think there was such a painful reaction, recently in U.S. and also in Europe, for those legislation about legalized content? The demonstrations here in Europe, several countries refused to sign this thing. Your company is dealing with that kind of thing. Why that was?
MR. HAIDAR: Right. Yeah. I think it’s an interesting time where you have this fight between pirated content and legal content and trying to control what users can do and what company ownership of content really means. It’s really, really interesting. I mean, what was really interesting is seeing kind of almost the internet community revolt against these bills that – I think what ended up happening was the powers that be realized that these were far-reaching. They weren’t specific enough to take action against pirated content. It left the door open to basically say that you can shut down a small persons website if they have a certain item of content on it.
So I think we’re still in that wave. There’ll be legislation that revisits this and I think it was the first passed to say let’s see if we can get this legislation through. There’s a realization that it has to be a lot more focused, has to be a lot more controlled, because it opens the door to, basically, fundamentally changing the internet and what you can post online and what you can really share. And it disrupts the fabric of what the internet really is, and what that is is a place where you go to get great content, and whether it’s authenticated, which is a lot of the work that we do, or it’s free or social sharing or what-have-you, a lot of that kind of comes to a halt if that legislation is taken and misused.
So I think the digital rights space is something that’s continuously being figured out as new services, as new offerings be brought online and really driven by consumer behavior. So I start wanting to do something, I’m going to find a way to do it because now technology is allowing me to do that. And then the legislation and privacy and ownership is kind of reacting to that. So sometime, somewhere we’ll land on what everybody agrees on, I think. But it’s extremely difficult to control user behavior when you have technology and the freedom to do what you want. So I think it’s more about people realizing it first than the governments and legislation realizing that, listen, we need to be sensitive to what this can mean and not just try to throw legislation out there.
MR. MORRILL: Thanks. Other questions? Yes.
QUESTION: Hi. I’m Shinyoung from Chosun Daily Newspaper with South Korea. Everything sounds so exciting, and – but I think we are becoming kind of too dependent on the internet. So do you – and then do you think the security issue is kind of following up on this? Because, I mean, if it all stops, we won’t be able to doing anything, so – (laughter) --
MR. MORRILL: You want to talk about privacy and sharing a little bit?
MS. MYERS: Yeah. I mean, I think, from our perspective as well as a number of other companies, the ability to opt in is huge and share what you want with who you want. Whether I am on Facebook and I don’t want to share something with a coworker or I don’t want to share something with my mother or things like that, I think that’s a key element. I think increasing knowledge and awareness, especially among the younger people, is huge, because they’ve grown up with this and this is what they know, but they’re not yet accustomed to the fact that what they say on Facebook can have an impact beyond Facebook. So it’s been interesting watching younger family members go crazy in my mind.
MR. MORRILL: Or older family members sometimes.
MS. MYERS: Yes. (Laughter.)
MR. MORRILL: Anything else to add?
MR. HAIDAR: I think you have – the other side of that is – has anybody walked into an Apple Store and bought something recently? I did. I walked in. I bought my phone, actually. And I walked out and a felt like I stole something, because you walk to – you walk up to a retail person, and they say, “What do you want?” And you tell them what you want. And then they say, “Okay. Here it is. Give me your credit card.” And as you’re standing in front of them, they swipe your credit card on their phone and then you walk out without – he says, “Do you want your receipt or do you want it emailed to you?” I want it emailed. So I walk out with my phone in my hand without a bag, without a receipt, without any form of confirmation that I paid for this thing, and I felt like I stole it. But then while I was walking to my car, I thought, “That’s really cool, right?” I mean, I – it just worked. It was so seamless.
And I think what’s happening is that people want seamless interaction. They want stuff that just works, right? Apple championed that, and Amazon as well, as you just log in with your ID and it works. But what that opens us up for is relying on big data, relying on enterprise computing, relying on enterprise security in the background that is really going to manage that and guard against the flood of ID theft and those kind of things as transactional data, and really – within Synacor, we have a big push on IDM, identity management systems, because what we do is we power authentication across all of these applications, all of these services, and that’s part and parcel of what we do, is basically making things simple and easy for people to consume and enjoy.
And so yeah, there’s a risk of security. And so a lot of – and I think you could speak to this, more about this is the enterprise-level security of data flying around and transactional and really pointing it to a specific person is something that’s going to be increasingly a problem, increasingly a huge footprint in the industry across everybody.
MR. MORRILL: Doug, anything to add?
MR. HEINTZMAN: Yeah. I think there’s a number – it’s a fascinating question, and I think that we as societies and as economic actors, as companies, and as individuals, for that matter, are going to always be grappling with the balances. And it changes from company to company; it changes from society to society. Different societies have different norms with respect to what degrees of openness they’re comfortable with, different demographic. I mean, I am amazed at how completely open and transparent so many of the interactions of the teenagers are these days compared to the culture that myself and my parents grew up in. So there’s those kinds of shifts, and we will go back and forth.
And I think you’re quite right that there’s going to be some tension between the kind of free and open and the need for real security, and I think there’s probably going to be a number of test cases where something’s going to happen and it’s going to end up in a court or it’s going to be of the public and we’re going to have to get serious about security and making sure that there’s – things aren’t leaking when they shouldn’t be and that intellectual property is handled appropriately. There’s going to be that kind of natural tension, and there’s a bit of an arms race going on, and we’ll figure out some better ways of doing it.
But what of the attributes that I think gets a little lost or underrepresented in that whole dialogue – privacy, security, and trustworthiness. I mean, so many of us are getting so much of our information from little bits and pieces. I read something on a blog, right, and suddenly it’s news. Well, just because it was on the internet doesn’t mean it’s true. I know that’s a radical thought – (laughter) – for this audience, but understanding the currency, is it a recent piece of information, understanding the quality of the authorship and is it a trustworthy source, is it multiply attested, is it – where is it inherited from, has it been – has something changed since you sourced that piece of information that affects the veracity, the trustworthiness of that.
And that was one of the big dilemmas that the Watson super computer had, is it kind of read vast amounts of information – huge, every single article in Wikipedia and every single journal from every single major outlet. I mean, vast amounts of information, but just because it was written somewhere doesn’t mean it was true. Being able to sort through this vast amount of data and then find other attesting pieces of information that contribute to the timeliness and trustworthiness of that kernelled information is essential.
So along with privacy and security, I really think we need to introduce the concept of trustworthiness as one of the other major pillars about the nature of content and how we view – whether it needs to be secured, whether it is dangerous, and if it’s trustworthy, current, from a good source, all those kinds of things. And fortunately, we’ve got a whole bunch of really smart people that are sitting around worrying about these things, and with the technologies like Watson and with a lot of the vaulting technologies and content management technologies that are being developed, we’re – we’ve gone a long way to solving a lot of these issues.
Once again, for most people, a lot of this stuff will be invisible. You’ll simply go to Siri and say who won the World Cup in 1964 and get the right answer, because somewhere in the background someone has done so. That’s a trivial example, but there’s much more sophisticated. If you’re a doctor and you’re trying to diagnose this person and figure out what kind of cancer they have, well, there’s some pretty big stakes. So when it comes back and says they have this kind of cancer and here’s what you do about it, you got to know that that’s a really good, trustworthy source and, by the way, in the background, that it’s sourcing from information in a responsibly anonymized way that isn’t infringing on the privacy rights of any of the sources of that data. So there’s tons of stuff in the background that will do the heavy lifting so that that interface, what’s wrong with this person, works. And that’s where an awful lot of the magic is.
MR. MORRILL: Good point. Other questions? No? Okay. Well, thank you, everybody for coming. I appreciate you coming out, and hopefully the panelists will stick around a little bit longer if anybody asks additional questions.
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