Notes on computing/communications convergence by D.Messerschmitt

This lecture made the following primary points:

• The computer industry was at one time more vertically integrated, with companies like IBM and Wang offering turnkey solutions, but it has since reorganized around a horizontally integrated model. In this model, a given application is built on a set of layers, each providing a set of generic functionality common to all applications. In the case of the computer industry, these layers include the microprocessor/instruction set, operating system, and middleware.
• Communications and networking are currently making a similar transition. Previously, there were turnkey networks for telephony, data, and video distribution. Today, we are moving to a bitway layer (focused on interconnection), a services layer (focused on end-to-end services like reliable datagram, audio, and video), a middleware services layer focused on interoperability, and a diverse set of applications.
• There are very strong forces driving this industry reorganization, mainly having to do with the diversity of applications it encourages.
• Networked applications display very strong externalities. Who is the first person to buy a FAX machine, given that there is nobody to FAX to? These externalities have resulted in a long time to establish new applications like FAX and video conferencing, and have discouraged a diversity of distributed user-to-user applications. (User-to-information server applications don't suffer this problem.)
• A major new technology entering this picture is transportable computation (eg. Java). The impact of Java will exceed even the current hype, because it is a way to distribute interoperable distributed applications while bypassing these externalities.

It is instructive to reflect on the impact of ubiquitous networking and transportable computation on the application software industry. These impacts are likely to be profound. Effects we can easily identify include:

• The ability to distribute applications over the network eliminates most distribution costs and all manufacturing costs. This is surely the first product industry with zero manufacturing costs!
• Network distribution allows much faster innovation in complementary applications, since the customers can upgrade much more often. However, this also creates a burden on the customer, which can be eliminated by transportable computation (eliminating installation).
• Network distribution enables much easier piracy, and raises all sorts of issues related to intellectual property rights. This is a possible "show stopper".
• The network admits the possibility of usage-based pricing, since a license server can monitor the use of an application. This is arguably a superior business model for software products.

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