Law Office Computing
January 2005
Winton Woods
Plus ca change, plus c'est la meme chose
Pardon my French, but sometimes they are right. Last Century, in a 1999 year end review the Gartner group, the leading IT consultancy in the world, observed: “ . . . . Sondergaard (an expert of the times) went on to kill some myths. Dot-com companies will not dominate in the future, as some may think, he said. In fact, 95 percent of strictly online companies will fail in the next 24 months, leaving room for more successful clicks-and-mortar, or hybrid, companies. That is, a company cannot survive on the Web only; the more traditional high-street office and shop are vital to success.”
Of course, Gartner was right about the pending collapse, as were many others, but they were profoundly wrong about the future of the pure web based business model. I remember those heady days. I was involved at the time with an attempt on the part of a client to find venture capital for his business. I had lined up a venture capital firm that was very interested in his little company. They wanted details concerning the business and I asked my client for “some numbers”. In a voice dripping with disdain, he said “on the Internet we don’t need numbers.” Of course, he had no numbers because his business model was literally and figuratively based on thin air. That attitude, of course, led to the Dot-com collapse from which we are just beginning to the recover. It is important to remember, however, that some of those virtual companies such as Yahoo, Google, Amazon and eBay have survived and indeed generated shocking profits by paying close attention to the “numbers” so derided by my former client.
It’s been a pretty tough five years, but 2005 may well mark the beginning of a dramatic recovery for virtual firms. We should remember, however, that the days of the companies that existed only in thin air ended not because their technical ideas and prowess were bad, but because their business model was profoundly flawed. Indeed many of the ideas were brilliant and years ahead of their time. Some of those ideas are driving the new recovery. The Internet has become again a hot commodity.
One of the oldest ideas that is resurfacing is the notion of “thin client” computing. A “thin client” is a computer terminal that depends for its functioning upon a server computer that contains the bulk of the applications and information needed to make the thin client a functional computing device function in a normal business environment. The server/client model has dominated large enterprises since the beginning of business computing 50 years ago. In the early days of personal computing there was some effort to extend the server/client model to small businesses. That effort has been largely unsuccessful with although there are exceptions such as the Citrix (CTXS) remote computing technology and a few other technologies all of which have suffered because of their high operating costs. The idea of having all applications and information on a single server may be having a new beginning, however. According to the Wall Street Journal the use of “thin client” computing of is undergoing a renaissance in both businesses and personal computing. The fact is, as the Journal notes, that millions of us already use web based e-mail, business and personal shopping and online photo services as well as many other web based processes. Long distance telephone service is increasingly done over broadband high speed Internet instead of copper wire and major financial institutions operate largely over the Internet. Thin client computing at the small business level cannot be far behind. Big change is also in store for businesses that exist only on the Internet.
Many people believe that change will be driven by the various efforts on the part of the guys from Google seeking to justify its astronomical stock price. You can go to the Google web site today and implement a dizzying array of programs including a truly remarkable one called Keyhole that displays aerial photographs, taken by satellite, of your house or office building. Just go to http://www.google.com/options/index.html and you’ll see what I mean. Most of the current Google services are free but they're just the tip of the iceberg. With close attention to “the numbers” there are profits to be made and the emergence of Internet based enterprise is the result. There is much more on the way including entertainment such as a full length films and music as well as innumerable business applications such as the secure storage of files and information off site and immediately accessible over the Internet. Google has realized the vision of a business based solely on the Internet and other businesses such as Amazon.com and eBay have made it clear that businesses that exist such “virtual” firms can prosper. And, unlike my friend from the Nineties who deprecated “numbers”, it is the numbers, the profit numbers, that drive this development.
What has made this possible is the unbridled optimism of the nineties. During that decade companies such as Level One Communications and Qwest laid millions of miles of fiber optic cable all over the world. That cable is able to handle much larger amounts of digital information than copper wire and satellite distribution. Most of that of cable capacity has been dormant since the Dot-com bust but in recent months major communications companies such as Cox Communications, Time Warner and Comcast have created networks that can deliver such wonders as on demand movies and other consumer oriented products. Voice over the Internet (VOIP) telephone service is exploding. And, commerce over the Internet is growing at rapid pace. Even so, 80 to 90% of the fiber installed during the nineties is still unused and many entrepreneurs are casting a sharp eye toward that underused resource. Now that high speed broadband access is readily available and relatively inexpensive it can be expected that the revolution anticipated ten years ago has started up again. We can expect to see many business uses for high speed Internet connections. We will not see the end of offline home based entertainment though the videotape is likely to go the way of the Yugo. We will not see the end of the use of powerful personal computers in the business environment. What we will see is increasing integration of business and personal resources over the Internet that will in turn create a greater need for all of us to find ways to survive in “24/7” environments.
Google has just told us that it is scanning millions of books in the New York public library as well as libraries at four universities — Harvard, Stanford, Michigan and Oxford. Any digital information is now fair game for Google search technology, including offline databases, music, photos, and even upcoming video searches. This is Westlaw and Lexis on steroids. It “is the day the world changes,” says John Wilkin, a University of Michigan librarian working with Google. “It will be disruptive because some people will worry that this is the beginning of the end of libraries. But this is something we have to do to revitalize the profession and make it more meaningful.” Ah so……….., Plus ca change, plus c'est la meme chose.