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Innovation, the Internet and Future Growth Describing Enterprise-based Innovations Driving Change Robert B. Cohen, PhD [email protected] , @bcohen777 Senior Fellow, Economic Strategy Institute Columbia University CITI Conference on Internet and Employment June 5, 2015

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Innovation, the Internet and Future Growth

Describing Enterprise-based Innovations Driving Change

Robert B. Cohen, PhD [email protected], @bcohen777

Senior Fellow, Economic Strategy InstituteColumbia University CITI Conference on Internet and Employment June

5, 2015

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Key Internet-Related Innovations

• Changes to Service and Software Development– “Continuous Service Delivery” speeding the creation of new applications/services

changing the way software is developed and by using modular software or “microservices.”• Microservices -- using modularity to more rapidly develop new services in the cloud.

– “Federating and Commercializing Data” raising the value of business services based upon data analytics.

• Changes to how Computing is Organized– Block Chains: Shifting from a single, “central cloud” to a decentralized, highly-

secure cloud.– Containerization: Creating new ways to “ship” resources – material and virtual --

from one place to another. (2014)– “Fog Computing” – “is about computing on the edge. In Fog computing devices

communicate peer-to-peer to efficiently share/store data and take local decisions.”*

Source: Angelo Corsaro, “Fog Computing with VORTEX,” http://www.slideshare.net/Angelo.Corsaro/20141210-fog

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Continuous Service Delivery 1: Speeding up Software Creation

Design teams replace isolated “skill areas,” like quality assurance; drastically reduce the number of steps to create software

Impact: Better knowledge of customers, new sales opportunities.

Adrian Cockcroft, “Creating Business Value with Cloud Infrastructure,” Open Networking User Group, May 13-14, 2015.

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Continuous Service Delivery 2: Using Microservices to Modularize Software

• Software development is more unstructured.• Working in the cloud means new services can be deployed quickly.• Far more room for innovation and agility.• Winning firms capture “speed advantages” and shape the market. • A knowledge of the new marketplace is a key competitive advantage.

Source: Martin Fowler, “Microservices http://martinfowler.com/articles/microservices.html

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Continuous Service Delivery

• Who’s Doing it?– Amazon, Nordstrom, US Department of Homeland Security,

Netflix, Conde Nast, Facebook, Gap, Walmart, and many banks.• Main Benefit

– Speeds software creation for the cloud• Related benefits:

– Firms know more about their customers, can identify which customers want specific services/goods; can test ways to retain customers;

– Sales increase, loyalty increases– Cost to serve customers declines

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Federating and Commercializing Data for the Internet of Things

• Internet of Things provides an opportunity to link Big Data, such as genomic information to healthcare treatment.

• This linkage reduces treatment costs• The cost savings usually go into developing greater skills in using data for

treatment.

• This shifts the focus of healthcare providers from facilities and service providers to data analytics.

• Data becomes a critical/defining resource for healthcare providers. In a similar fashion, physicists working with CERN made data the primary focus of their Internet services during the hunt for the “Higgs Boson.”

• “Federating Data” may provide significant advantages for activities like electronic design that rely on collaboration.

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Block Chaining: Re-architecting the Cloud to Create a Highly Secure Management System for Hundreds of

Billions of Devices for the Internet of Things

• Block chaining creates the ability to manage a highly distributed cloud• Once a product is identified in a block chain, it is there throughout its life. Thus, in a block chain

based IoT, the product’s information, its history, product revisions, warranty details and end of life in the block chain means the block chain itself can become the trusted product database.

• This creates a highly secure means to track value/information transfers• As a result, it provides a way to transform not only banking, but also new highly complex systems

– networks for driverless cars, data analytic systems for healthcare – into very manageable distributed clouds

See: Paul Brody and Veena Pureswaran, “Device democracy: Saving the future of the Internet of Things,” IBM Institute for Business Value, Sept. 2014, p. 7. http://www-935.ibm.com/services/us/gbs/thoughtleadership/internetofthings/ IBM Institute for Business Value,” ADEPT: An IoT Practitioner Perspective,” ibm.biz/devicedemocracy

Impact: Greatly reduces the costs of transactions and complex system exchanges. Facilitates scalability, security, interoperability and new value creation/exchange.

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Source: “Introduction to Docker,” November 2013. http://www.slideshare.net/dotCloud/docker-intro-november

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Containerization and Shipping Virtual Resources: Docker

• Who’s Using it?– ING, NY Times, GE Appliances, Capital One, Orbitz Worldwide,

Activision (gaming), Grub Hub (food delivery)• Main Benefit

– Speed software implementation at different locations– Create a pipeline for new services

• Related benefits:– Build once…run anywhere– Run each app/service in its own isolated container– Eliminate concerns about compatibility on different platforms

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Fog Computing

• Fog takes the load off centralized clouds and puts computing at the edge.• This “turns the Internet inside out” (Paul Brody of IBM quoted in WSJ)• Creates an infrastructure similar to that in “block chaining.”• Used in Nice, France’s “Connected Boulevard” and in the coming year, in

air traffic control systems in Italy and France. Source: Angelo Corsaro, “Fog Computing with VORTEX,” http://www.slideshare.net/Angelo.Corsaro/20141210-fog and Christopher Mims , Forget 'the Cloud'; 'the Fog' Is Tech's Future,” Wall Street Journal, May 18, 2014, http://www.wsj.com/articles/SB10001424052702304908304579566662320279406

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Summary: Key Innovations in the Internet

Computing Data Centers Software Internet of Things Networking

Initial Changes VirtualizationVirtualization via

Hosting and Software-as-a-Service

Machine-to-Machine Communications, Subnets of Things, Centralized Cloud with Virtualization

Software Defined Technology

Open Stack/Open Flow Software Defined

Networking (SDN) and Network Function

Virtualization (NFV)

Software Defined Data Center. Then Open Stack/Open Flow Software Defined

Networking (SDN) and Network Function

Virtualization (NFV)

Software Defined Programmable

Networks

Automated ProgrammingProgramming

Protocol-Independent Packet Processors (P4)

(2015)

Programming Protocol-Independent Packet Processors (P4)

(2015)Microservices

Shared Resources and Services "Federated Data" Containers (2014)

"Fog Computing," Distributed Cloud and

Block Chaining. Programming

Protocol-Independent Packet

Processors (P4) (2015)

Programmable Networks with SDN, NFV and Open Stack

frameworks

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What Kind of Jobs will these Innovations Create?

Older, Large Firms Social Media and On-Demand Firms

Peer-to-Peer eCommerce Firms

AngelList Job Postings

Amazon, Google, Apple, and Salesforce.com

Facebook, Twitter, and Uber

Airbnb, Taskrabbit, Etsy Silicon Valley Startup Firms seeking employees

Sales and Marketing34% 35% 20% 23%

Finance, Administration, Human Resources and Support*

26% 23% 20% 4%

Engineering and Research, Operations, IT and IS

40% 43% 59% 73%

Number of jobs 13, 245 839 202 14,636

Source: Jigsaw.com profiles accessed June 2, 2015 and Codingvc.com, "Analyzing AngelList Job Postings, Part 1: Basic Stats," 08 Sep 2014, http://codingvc.com/analyzing-angellist-job-postings-part-1-basic-stats. Note: The latter source includes jobs posted on August 31, 2014.* The AngelList jobs in this category includes lawyers.