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From a deck that I presented at the SIIA “All About Mobile” conference in November 2011 in San Francisco. It starts with the usual set of slides on the recent history of mobility (and I will keep presenting them until I see no more “I had no clue” faces in an audience), and then goes deeper into Moore’s Law and how we see it continuing for cell phones. An additional journey back in history to the early days of the industrialization and electricity. Companies had to generate their own power (by using wind, water, animals, etc.) and Burden’s Wheel is a good example of one big, giant monolithic effort to do so. Along came Tesla and Westinghouse, and the first power plant “Adam’s Plant” was able to provide about 3x the power, but over a much further distance, and to multiple customers. The concept of an electric utility was born, and what we saw happening was the fall of “enterprise power generation”. Fast forward to 1969, and Douglas Parkhill and John McCarthy came up with the concept of the “Computer Utility”. Today we see multi-$B investments into public cloud infrastructures. In very simple terms, if history in the utility industry is any indicator, we will see enterprise clouds disappear. And as cloud infrastructures scale and get more efficient, and the price of computing goes down (Moore’s Law), developers will find a way to use and instrument that computing power, and make it consumable to enterprises and consumers, which gets us to Jevons’ Paradox. Jevons observed how consumption of energy in England went up as coal power plants got more efficient. All the way to today where we keep the lights on in our homes 24/7, and darkness has actually become a scarce good in some metropolitan areas. Switching to enterprise computing and looking at BEA data on IT assets for the past four decades, we see that prices for IT assets are falling, whereas other assets follow an inflationary path. And as computing gets cheaper, enterprises consume more and more of it (and you can argue so do consumers, aka “Consumerization of IT”). What is striking that with the arrival of the public Internet in ‘90-95 and web companies like Yahoo and Amazon, the mix in consumption is shifting: it’s increasingly going towards software, up from a SW:HW ratio of roughly 1:1 over three decades, to now 3:1. So today, for every $1 spent on hardware, enterprises spend $3 on software. Hence, it seems like enterprises are making use of the public cloud, which would explain the rise of SaaS companies, such Salesforce, SuccessFactors and also Amazon’s AWS. And as the rise of smartphones is only beginning, enterprise mobility will likely drive the trend of an increasing SW:HW ratio further up. I wouldn’t be surprised to see the mix go to 10:1 in the next five years as smartphones proliferate and the amount of on-deck and off-deck computing power available to a single device is growing exponentially, the concept of “accelerated acceleratio
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Accenture Mobility Services
Mobility – Trends for the Next DecadeSan Francisco, November 2011
Lars Kamp
Copyright © 2011 Accenture All rights reserved. 2
Contact
Lars Kamp
Suite 1200560 Mission StreetSan Francisco, CA 94105415.894.5423lars.kamp@accenture.com
Accenture Mobility
Copyright © 2011 Accenture All rights reserved. 3
First, some shameless self promotionAccenture’s Five Offers for Enterprise Mobility
CMT FinancialServices
Products Resources Health & Public
Service
Mobility ConsultingBusiness, Technology and Network
Mobility Managed ServicesEnable and Operate
Mobility Business Integration Services
Mobility Software ServicesApplications Devices, Platforms
1
2 3
4
5
Copyright © 2011 Accenture All rights reserved. 4
Today’s topics.
History
Silicon
Cloud
What’s Next?
Copyright © 2011 Accenture All rights reserved. 5
Before we start
J. C. R. Licklider, 1965
“People tend to overestimatewhat can be done in one year and to underestimate what can be done in five to ten years.”
Copyright © 2011 Accenture All rights reserved. 8
The start of mobile computing.General Magic Mission Statement, May 1990 – Mountain View, CA
“We have a dream of improving the lives of many millions of people by means of small, intimate life support systems that people carry with them everywhere.
These systems will help people to organize their lives, to communicate with other people, and to access information of all kinds.
They will be simple to use, and come in a wide range of models to fit every budget, need, and taste. They will change the way people live and communicate.”
Source: SEC.
Copyright © 2011 Accenture All rights reserved. 9
Cloud computing in the 90s…“Magic Cap” in 1994, designed to run on distributed server systems
Source: Wired.
Copyright © 2011 Accenture All rights reserved. 10
Revisited in 2008 with AndroidKey Magic Cap engineers moved on to create Android, iPhone, Flash
“Magic Cap” UI, 1994 G1 “HTC Dream” UI, 2008
Copyright © 2011 Accenture All rights reserved. 11
Android iterating 2x per year …One major dessert every six months
Oct 2008Android Market
announced.“G1”
July 2005Android acquired
by Google
2005 2007 2008 2009 20112010
Sept 2003Android incorporated.
“Astro” & “Bender”Nov 2007
OHA founded.“Android” platform
unveiled.
Apr 2009Android
SDK released
History of Android
D E FC GSept 2009Donutv1.6
Oct 2009Éclair v2.0
May 2010 FroYo v2.2
April 2009
Cupcakev1.5
Dec2010GiBrv2.3
… HMar2011HoCov3.0
…IOct
2011IC
v4.0
2012
JH1
2012JB
v5.0?
Source: Google, Accenture analysis.
Copyright © 2011 Accenture All rights reserved. 12
… with rapid ecosystem adoptionOne smartphone OEM and SemiCo at a time
D
Sept 2009Donutv1.6
E
Oct 2009Éclair v2.0
F
May 2010 FroYo v2.2
C
April 2009
Cupcakev1.5
G
Dec2010GiBrv2.3
H
Mar2011HoCov3.0
HTC
Dream
Samsung
Behold II
Motorola
Droid
HTC
Nexus One
Samsung
Nexus S
Motorola
Xoom
Android Release
“Hero” Device
Chip
Qualcomm MSM7201A 528MHz
QualcommQSD8250998MHz
IntrinsityS5PC1101,000MHz
NVIDIATegra 2 2501,000MHz
TI OMAP3430600 MHz
Qualcomm MSM7201A 528MHz
Oct2011
IceCrmv4.0
I
Samsung
Galaxy Nexus
H12012JB
v5.0?
?
?
?
TI OMAP44601,200MHz
J
Copyright © 2011 Accenture All rights reserved. 13
The app store economyCatalog Size –Apple App Store vs. Android Market
740600
Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11
Source: Apple press releases & earnings calls, Google, AndroLib, PCWorld, Distimo, Accenture analysis. Excludes books. All numbers rounded.
~560K Apps in iPhone AppStore
~370K App in Android
Market
Copyright © 2011 Accenture All rights reserved. 14
Early days with Android and iOSApp & Mobile Web Usage Growth, US -April 2008 – March 2010
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10
Ads
Req
uest
ed (
Mill
ions
)
32% Monthly Growth
(Nov’08-Mar’10)
19 % Monthly Growth
(Apr’08-Mar’10)
RIM
Others incl. Palm & Windows
Source: AdMob Mobile Metrics Report, Accenture analysis.
Copyright © 2011 Accenture All rights reserved. 16
Moore’s LawOriginal publication in the April 1965 edition of Electronics
Gordon Moore1965
Source: Intel.
Copyright © 2011 Accenture All rights reserved. 17
“Accelerated acceleration”Calculations per Second per $1,000
10-6
10-2
103
104
105
10-5
10-4
10-3
10-1
100
102
101
106
107
108
109
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Electromechanical Relay Vacuum Tube Transistor Integrated Circuit
Source: Ray Kurzweil, Accenture analysis.
1965Moore’s
original article
Copyright © 2011 Accenture All rights reserved. 18
The evolution of cell phones....Shift from basebands to application processors
Baseband Processor (aka Modem)
“Fat Modems” Baseband & Application Processor
Low power silicon for voice/SMS and long
battery life.
OS-enablement of light apps running on top
of baseband.
High performance, low power application
processors.
Copyright © 2011 Accenture All rights reserved. 19
… equally following Moore’s LawSmartphone computing power - DMPS per $
10-1
101
100
2000 2001 2002 20112003 2004 2005 2006 2007 2008 2009 2010
Source: Accenture analysis based on 27 smartphones from 13 OEMs and 4 SemiCos. Based on unsubsidized retail price at launch day.
~130 DMPS
~3500 DMPS
Copyright © 2011 Accenture All rights reserved. 20
“Accelerated acceleration”Nvdia Tegra roadmap from MWC 2011
Source: Nvidia press release.
Copyright © 2011 Accenture All rights reserved. 21
Delayering of the silicon industrySystem porting emerging as the new layer – “connected devices”.
Fully Vertically Integrated: Design & Foundry
1970sVertical
Suppliers
ASIC Vendor
System Manufacturer
(Foundry)
1980sASIC
Vendors
Design & Distribution (“Fabless”)
Electronic Design
Automation
Foundry
1990sFablessSemis
IP
Design & Distribution
EDA
Foundry
2000sIP-drivenDesign
IP
Design & Distribution
EDA
Foundry
2010sSW-driven
Design
System Porting
“Texas Instruments” “VLSI Technology” “Qualcomm” “ARM” Various
1 : 0 1 : 0.5 1 : 1 1 : 2 1 : 2+RatioHW : SWEngineers
Source: ARM, Cadence, Accenture analysis..
Copyright © 2011 Accenture All rights reserved. 22
Value in silicon moving up the stackDaily stock prices ARM vs. QCOM, indexed, 01/01/2006 – 11/11/2011
0
100
200
300
400
500
600
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
QCOM129 Index
ARM486 Index
July 2008ARM announcement that
“major OEM” acquired architecture license
Source: Stock data taken from Google Finance. Index excludes any dividend payments.
Copyright © 2011 Accenture All rights reserved. 24
Burden’s Wheel in Troy (NY), 185162 x 22 ft., 500 hp / 373 KW to Burden Iron Works plant 60 ft. away.
Source: National Museum of American History, Behring Center; Nicholas Carr, “The Big Switch”.
Copyright © 2011 Accenture All rights reserved. 25
Adam’s Plant, Niagara Falls (NY), 18956,700 x 21 x 18 ft., 1,250 hp / 932 kW, to Buffalo (NY), 22 miles away.
Source: Tesla Memorial Society; Nicholas Carr, “The Big Switch”.
Copyright © 2011 Accenture All rights reserved. 26
Cloud computing – a 1969 conceptDouglas Parkhill (DFAIT) and John McCarthy (Stanford)
”In addition to making raw
computer power available in a
convenient economical form, a
computer utility would be
concerned with almost any service
or function which could in some
way be related to the processing,
storage, collection and distribution
of information.”
The Challenge of the Computer Utility, 1966
Source: “The Challenge of the Computer Utility”, 1966
Copyright © 2011 Accenture All rights reserved. 27
$B investments into data centersMassive, “off-deck” geo-distributed computing power
Prineville, OR USA The Dalles, OR USA
Maiden, NC USA Dublin, Ireland
Lockport , NY USA
Morrow, OR USA
Copyright © 2011 Accenture All rights reserved. 28
Contrasting cloud economicsWhat $1 can buy
$5 per annum
Price for 20GB Storage Cloud Music Storage
$20 per annum
$40 per annum
Up to 20,000 Tracks Free
Up to 10,000 Tracks Free
Up to 25,000 with $25 Plan
Source: Google, Apple, Amazon, Accenture analysis.
Copyright © 2011 Accenture All rights reserved. 29
Largest Commercial Cloud PlatformGoogle with (planned) 107 machines, all subject to Moore’s Law
Source: Jeff Dean, Google.
Copyright © 2011 Accenture All rights reserved. 31
Apple’s device businessApple Product Group Revenue ($B)
0
5
10
15
20
25
30
35
40
45
50
2004 2005 2006 2007 2008 2009 2010 2011E
iPad
Apple TV
iPod
Mac
iPhone
Source: Apple, Accenture analysis..
Copyright © 2011 Accenture All rights reserved. 32
The Apple Store – direct to consumer26,500 FTEs, 250M+ annual visitors in ~350 stores in 11 countries.
New York Paris Tokyo
Sydney Munich Shanghai
Source: Apple, Accenture analysis..
Copyright © 2011 Accenture All rights reserved. 33
Apple Store performance compared$13B in sales, with more $/SqFt/Year than Tiffany & Co.
$4,793
$3,010
$866
$425
$391
Retail Revenue
($B)
Retail Stores
(#)
Retail Space
(M SqFt)
FTEs / part-time
employees(K)
13 323 2.5 30
3.1 233 1 9
50.3 4,172 58 180
419 8,970 985 2,100
9.3 204 23.8 52
$397
$337
$279
$200
$179
$102
$36
$33
$128
$125
$ / SqFt / Year ($)
$ / employee / Year ($K)
$ / Day / Store($K)
$ / Store / Year($M)
Scale of Retail Operations Retail Revenue Metrics
Q3 FY2010 –Q2 FY2011
$37
$13
$12
$47
$46
Source: Apple, Tiffany, BestBuy, Walmart, Nordstrom Accenture analysis..
Copyright © 2011 Accenture All rights reserved. 34
Explosive growth for mobility1B smartphone shipments by 2015
Global Mobile Shipments2005-2015E, Millions
Total Devices
Mill
ions
777920
1,064 1,039 9541,085 1,105 1,135 1,147 1,151 1,150
57
82
124 151173
303453
582707 820 926
833
1,0021,188 1,190 1,128
1,389
1,5571,718
1,8541,971
2,076
0
500
1,000
1,500
2,000
2,500
2005 2006 2007 2008 2009 2010 2011 E 2012 E 2013 E 2014 E 2015 E
SP Share of Total
7% 8% 10% 13% 15% 22% 29% 34% 38% 42% 45%
‘10 –’15 CAGR
8.4%
SmartPhones 25.0%
NonSPs
1.2%
Source: IDC.
Copyright © 2011 Accenture All rights reserved. 35
Ephemeralization“Progressively doing more with less”
Buckminster Fuller, 1938
“To do more and more with less
and less until eventually you can
do everything with nothing”
Copyright © 2011 Accenture All rights reserved. 36
Early “ephemeralization” aka “appification”Devices are being replaced by apps.
2006 2011 and Beyond
Camera “Camera”
Credit Card Payments
MP3 Player Music
TV Video
Phone Voice
Copyright © 2011 Accenture All rights reserved. 37
Software replacing people and things.Start to wonder who / what is next
People Things
Taxi Dispatcher ATMs Keys
Copyright © 2011 Accenture All rights reserved. 38
Cloud-to-device frameworksConnecting “on-deck” with “off-deck” computing power: mobile cloud
Today-ish
Tomorrow
HTTP(custom libraries)
SDKs
Cloud Device
Copyright © 2011 Accenture All rights reserved. 39
Industrialization of the back-endCloud-to-device tools and frameworks.
Copyright © 2011 Accenture All rights reserved. 40
Jevons’ Paradox Increased efficiency can lead to increased consumption
”It is a confusion of ideas to
suppose that the economical
use of fuel is equivalent to
diminished consumption. The
very contrary is the truth."
William S. Jevons1865
Copyright © 2011 Accenture All rights reserved. 41
As computing gets cheaper…Four Decades of Data from the US Bureau of Economic Analysis (1/3)
101
102
103
104
105
Source: BEA, Accenture analysis.
1970 2010200019901980
US Asset Price Index, 1969 – 2010Normalized, 2005 = 100
Industrial Equipment
Other Equipment
Transportation Equipment
Computers and Peripheral Equipment
Copyright © 2011 Accenture All rights reserved. 42
… companies consume more of itFour Decades of Data from the US Bureau of Economic Analysis (2/3)
$0
$50
$100
$150
$200
$250
$300
$350
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
US IT Investment, 1969 – 2010Annual Investment per Employee ($) & Nominal Annual Investment ($B)
Annual Investment per Employee ($)
Nominal Annual Investment ($B)
Source: BEA, Accenture analysis.
1970 2010200019901980
Copyright © 2011 Accenture All rights reserved. 43
Software-driven consumption of ITFour Decades of Data from the US Bureau of Economic Analysis (3/3)
0.5
1
1.5
2
2.5
3
3.5
US IT Investment, 1969 – 2010SW : HW Ratio
1970 2010200019901980
1995YHOO, AMZN, NSCP:
Commercial Web
1990Tim Berners-LeeWorldWideWeb 2007
1st iPhone
Source: BEA, Accenture analysis.
1990ARPANET
decommissioned
Academic Investment
Private Investment
2009SW:HW invest
ratio passes 3:1
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