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ERIC SCHMIDT GOES GOOGLY E ric Schmidt~Dr. Eric Schmidt, Ph.D. Computer Science, U.C. Berkeley--is both a lord of the geeks and one of our favorite all-around observers of the...
...Television is toast...
...Within two to three years, it will be common...
...The local phone system, cable providers, wirelesswin the Bay Area, where I live, we have all those choices.And guess what...
...In the new economy, overshoot wasn't supposed to happen...
...High tech has been a real train wreck over the past year--what were people smoking...
...And if you put enough of them together, and you design it right, your reliability is just as good as the traditional and more expensive solutions...
...Convergence is coming...
...In telecom, it does seem like the tortoise is beating the hare...
...Napster--music file-sharing over the Net-looked like the next one...
...The people who own the content and drive it on the networks will be very powerful...
...For the first time now, we can really see all the pieces of what's coming for consumers...
...But my point here is that we had one...
...The problem is forecasting the future---computers don't do it very well...
...What they let you do is expand quickly or contract quickly...
...And some kind of a HDTV or cable box, with a hard drive for caching.You can sit there and you saTg"I want to see this movie...
...People were getting ready to provision bigger networks and faster computers because of it...
...My bet is on the people with cash flow, which today means the telcos...
...I'm very confident that new Napster-like services will emerge--they already have...
...Remember how we thought, "Oh, these big, boring telecom companies--they're not going to do anything...
...Movies require hundreds of times more bandwidth, so it will be a few years before this really hits...
...We'll know we're really there when the average person says, "I'm indifferent as to whether I get radio ~ Till:' hMi~'RIChN gPF.CTATNR 9 .~FPTFMRER/OCTORER 2001...
...What about all the amazing supply-chain technologies and inventory control...
...And meanwhile the folks in the unregulated side are looking at wave after wave after wave of pricing collapse...
...And he still finds time to think high thoughts, about everything from the architecture of the Net to the lobbying game in Washington...
...Unfortunately it also turned out to be illegal...
...It will be possible soon to do this...
...I think at the end of the day, there'll be both--the small, fast innovative companies with their little niches, and huge aggregators...
...But the fact is that the regulated part of their business has a structure, which economically is predictable...
...Berkeley--is both a lord of the geeks and one of our favorite all-around observers of the high-tech scene...
...And the underlying physics that drove it are going to continue, whether we like it or not...
...Radio is audio content, which happens to be delivered over radio waves.Television is not the box.Television is video, which happens now to be delivered over this regulated distribution network...
...So the fact that decisions can be made instantaneously and globally, plus the underlying physics, plus the shift from mass hysteria to mass gloom~all of it added up to an incredibly rapid correction...
...How do you turn that around...
...But done right, demand--and revenue---will explode...
...And we need technologies that simultaneously protect intellectual property rights and give people the kind of access it takes to propel a Napster...
...What happens out on the edge...
...The Internet's architecture encourages models that go to absolute scale very quickly-they're the ones that are likely to survive the tremendous price collapses and the tremendous increases in users that we're beginning to see.You can debate which companies that will be, and what percentage will end up being big, as opposed to the thousand flowers blooming in garages...
...The physicswcomputer processing power, fiber optics, disk storage---have been following the same explosive growth curve as always, more or less doubling in capacity every twelve to eighteen months...
...ERIC SCHMIDT GOES GOOGLY E ric Schmidt~Dr...
...This summer he pried on two more titles: chairman and CEO of Google, the upstart (and current runaway leader) Internet search engine...
...There's an error made over and over--confusing the data and the transport of the data...
...PCs are now as fast as any of the computers in companies that I used to work for.They're beginning to be a defining platform on the Internet as a whole...
...Napster consumed enormous amounts of bandwidth and processing power...
...And we'll say, "Oh, yeah, yeah...
...We caught up with him in August...
...Again, look at Napster: the next killer app is content.The next big uses of the Internet will be video, voice and what people are calling "rich content...
...So the Internet meteor doesn't wipe out the dinosaurs...
...it went from zero to thirty million users in six months...
...But the demand curve leveled off...
...But in the larger picture, don't underestimate the hare...
...I've heard all that...
...Prices are falling dramatically...
...The American Spectator...
...In computers and networking, new applications are what drive demand...
...So competition lives...
...That's a pretty serious flaw...
...Somebody will figure out a way to aggregate all of that...
...Not necessarily for the right technical reasons---simply because they have an existing business model.The telcos go on and on about how unfair the world is to them...
...Eric Schmidt: It's not a great mystery...
...The problem is in fact that prices are falling so fast people are going out of business.We don't have a lack of competition...
...Netscape, in 1995, which launched the WorldWide Web...
...They're cheap...
...And that movie will show up, over the satellite or the Internet, and it will come over at the same quality and at the same price...
...The wonderful world of AOL Time Warner and Walt Disney...
...Tivo to connect to that...
...Silicon Valley pedigrees don't get any bluer-chip: Bell Labs, Xerox's legendary PARC research center, Sun Microsystems, then chairman and (until earlier this year) CEO of networking software stalwart Novell...
...The Internet's vibrancy is the clearest possible evidence of how important competition is...
...So where do you look for the new new thing...
...When was the last "killer app...
...tkadio is not radio...
...Eric Schmidt, Ph.D...
...Napster shows the way...
...The Net's economics favor both...
...Satellite download, DirecTV or one of their competitors, DSS...
...This happens in other industries, but usually they have lower, slower growth curves.At the kind of pace we've been moving, even a small drop-off in demand causes everybody to overshoot, because the margin of error is so small...
...But the distribution mechanisms are multiplying...
...We have too much competition, because nobody can make any money...
...Well, that doesn't sound very promising...
Vol. 34 • September 2001 • No. 7
