To discuss this Cover Story, the guests were author Charles Ferguson -- chairman and co-founder of Vermeer Technologies, a pioneer of visual-standards-based Web publishing tools -- and Business Week's Amy Cortese.
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Good evening and welcome to Business Week Online. The Internet and the World Wide Web are shaking the foundations of the software business. The bottom line: for computer users a much simpler way of life, for the industry, challenges for even such powerhouses as Microsoft. The Cover Story in the current issue of Business Week (Dec. 4) tells all about this revolution.
To tell us more, here are consultant and author Charles H. Ferguson and Amy Cortese, software editor of BW. Charles Ferguson is chairman and co-founder of Vermeer Technologies, a pioneer of visual-standards-based Web publishing tools. Before starting Vermeer in early 1994, he was an independent consultant and strategist for such companies as Motorola, Apple, Synoptics, and Intel.
In 1993 Ferguson co-authored with Charles R. Morris "Computer Wars: The Fall of IBM and the Future of Global Technology" (Times Books/Random House), named one of the Top 10 business books of the year by Business Week. He holds a BA in mathematics from the University of California at Berkeley and a PhD in political science from MIT. His screen name is ChasFerg.
With Charles Ferguson on stage is Amy Cortese (ACORTESE), software editor of Business Week and principal author of the story on the software revolution. She is an alumna of Northeastern University who, before joining BW, covered Silicon Valley from a base in San Francisco.
The moderator is Jack Dierdorff (JackBW), consulting editor of Business Week Online and former managing editor of the magazine And now on to our discussion of the software revolution -- and the questions you send us here on stage via the Interact button.
JackBW: Good evening to all of you here on AOL. Welcome to BW online, Charles Ferguson. And hi, Amy Cortese.
ChasFerg: Hi, Jack. Hi, Amy. Great to be here tonight.
ACORTESE: Hi, Jack, Charles, and all.
JackBW: Amy, I want to ask you for starters: What is this software revolution you wrote about?
ACORTESE: In a nutshell, right?
JackBW: Yes, 25 words or less...
ACORTESE: The revolution is basically about breaking down the artificial barriers that exist today for computer users. What makes this possible, first and foremost, is the Internet and the TCP/IP protocol it is based on. That allows all sorts of computers to talk to one another, and share the same information. Add the notion of an "executable" language, like Sun Microsystems'
Java, and you can really start to change the way software is created and used.
JackBW: I have a follow-up for you and Charles Ferguson, if he wants to chime in.
Question: How does this affect Mr. or Ms. Average Computer User and their purchase and use of software?
ACORTESE: Probably not dramatically -- at first. The Web "pages" you view on the Internet may be more interactive and glitzy. But the promise is that, sometime soon, you'll be able to get software essentially on demand. The Internet allows software to be sent across the wires, but it's slow. Languages like Java let developers create small programs, called applets, that will be much faster to download. That way, you can get the latest features or applets immediately off the Net, without waiting two years for the next big update of Office or whatever. You won't even have to make a trip to the store. Ultimately, all of these things mean more convenience and more choices for users.«MDRV»«MDNM»
JackBW: Charles Ferguson, what's your take on this revolution?
ChasFerg: I would add that within a year or two it will be possible for people to do serious online banking, shopping, and home-to-business interactions over the Internet.
JackBW: Try this one next, Charles.
Question: What are the implications for the software industry?
ChasFerg: I think that, for the first time in 15 years, there is a huge opening for new firms, new ideas, and new products. And I doubt that Microsoft will control them all.
JackBW: Charles, this question from VALUEADDER is directed at you -- but not on software.
Question: To Fergie -- what will happen to the victims of the tech revolution, who now have the "wrong" skill sets?
JackBW: A brief diversion!
ChasFerg: Unfortunately, I do fear that this revolution will occur so fast that many «MDNM»companies and industries will not react fast enough, to the detriment of their employees. There is a real possibility that large numbers of people will lose their jobs over the next decade as a result.
JackBW: Amy is back with a question.
ACORTESE: Charles, your book "Computer Wars" discussed the downfall of IBM. Do you draw any parallels between the situation IBM faced in the '80s and the one Microsoft finds itself in today?
ChasFerg: Yes. The similarity is that something dramatically new takes the incumbent by surprise, and allows startups to exploit its slowness in responding. Conversely, Bill Gates is much smarter and tougher than the old IBM bureaucracy. He won't just sit around.
ACORTESE: In fact, Bill Gates is not just sitting around. He is probably throwing more resources at the Internet than any single company!
JackBW: Chuckoe sends us this question from the audience.
Question: Will the Internet servers ever speed up during peak hours? Sometimes the more popular sites seem like they take forever.I am worried that with the increased popularity of the Net, it will be impossible to access some sites.
ChasFerg: There is certainly a race on between Internet usage growth and growth in bandwidth and server power. One thing we need badly is real telecommunications deregulation, to incent serious competition in providing bandwidth to homes and businesses.
JackBW: Amy wants to add.
ACORTESE: I just want to second Charles's comments. None of this will happen without great increases in bandwidth.
JackBW: Back on your comments about jobs, here's Arce Rojo.
Question: Will this revolution affect today's job opportunity? Explain it, please.
ChasFerg: Yes. I think that traditional industry like retail banking will be changed forever, and that in many industries, including banks, modern systems skills will become very important. I also think that there will be many opportunities to create startups that use Internet technology in these industries to compete with established banks, retailers, and so forth.
ACORTESE: The Internet is like a big melting pot. As more and more companies -- banks, insurance companies, whatever -- start offering products, services, and information over the Internet, the whole notion of "software" begins to blur. Your bank may be your software provider as much as Intuit is.
JackBW: Charles, here's a question from Amy.
ACORTESE: Charles, what is your opinion of Java, the programming language from Sun?
ChasFerg: The basic idea is absolutely correct. There are two issues: One, Java is a very complex language, and something simpler would be nice. Two, Microsoft will try to make Visual Basic the standard instead of Java, so there'll be a war between them.
JackBW: KMc124 wants to know more.
Question: Can you explain the difference between Java and Hot Java?
ACORTESE: Java is a language that programmers can use to create "executable" content. It melds the content -- say, an animated clip -- with the program needed to view it, so that you don't need any other software loaded on your disk. You do, however, need something called the Java "virtual computer," which is really software but can execute the Java miniprogram, or applet. Hot Java is Sun's own Web browser, which includes the Java virtual machine. Does that do it?
JackBW: Next, from SpW.
Question: About bandwidth, when does wireless come in?
ChasFerg: Wireless bandwidth is running about a factor of 10 behind wired bandwidth. For current modem speeds, wireless capabilities are just arriving. Eventually, it will be easy for local connections to be wireless, but long-haul, high-bandwidth systems will still be fiber.
ACORTESE: Some software executives see the day where you can hook into the Net from your smart phone, check flight availability, and book a flight, all without a physical connection.
JackBW: Back to basics on bandwidth, from our friend KMc124.
Question: Can you explain in elementary terms why "more bandwidth" is necessary for a successful revolution?
ChasFerg: Two reasons: To handle the fact that within five years, over 100 million people will be using the Internet. And to handle video and multimedia data, which require much higher bandwidth than text or graphics.
ACORTESE: Also, the revolution is about breaking down old barriers --such as the distribution system we have today. Many small companies cannot afford to compete with Microsoft, Lotus, or others for shelf space. But on the Internet, anyone can play. But it won't be practical to download software program until the bandwidth is there to support it.
JackBW: BobAB in Teaneck, N.J., propounds this question.
Question: So, five years from now, where will my operating system be? And if it's on the Internet, how much confidence will I have in my ability to get to this super OS when I need it?
ACORTESE: That's a concern many people have, and one reason why this will not happen overnight. I'm not sure today I would trust my operating system, or personal information that is today stored on my hard drive, to the network. It's up to software companies to work out the details to let this happen.
ChasFerg: There's no doubt that the Internet will soon assume many of the characteristics of public infrastructure systems -- electricity, water, highways, etc. It will become necessary for the system to have far higher stability and reliability than it presently does. Right now, we are about where the telephone system was in 1910. It's obviously right, but it's still a mess.
JackBW: Another on the software industry.
Question: What does the revolution you predict portend for the economics of the software biz (i.e., will software be a lot cheaper, will there be de facto standards, etc.) and for software innovation (will it be freer-flowing, or hamstrung for lack of R&D funds)?
ACORTESE: I think the Web, Java, et al. will really spur innovation. As I said before, now thousands of developers can all compete on the merits of their software, not their clout with retailers. And, if we can buy software in smaller chunks, it should be cheaper.
JackBW: Chuckoe has a related question.
Question: So will software retail stores become extinct?
ChasFerg: I certainly think they will become endangered species. Perhaps not extinct, but there will clearly be intense pressure for them to justify their existence.
ACORTESE: Or maybe they adapt, too. There are already software "stores" on the Net.
JackBW: Here's a marketing point.
Question: When will we have that "under $200" Internet cruiser that Nicholas Negroponte has talked about?
ChasFerg: I'm skeptical about that one. I think most of the time, people will want and need a real computer to surf the Net.
ACORTESE: I think under $200 is a little far-fetched. But that's not to say that there won't be a role for certain scaled-down PCs or Internet appliances. For corporations, the costs of supporting the PC community are sky-rocketing. There may be a class of workers that don't need the full power of a Pentium on their desktop.
ChasFerg: I agree with that, Amy.
JackBW: Back to giant Microsoft.
Question: How will Microsoft have to change if it's to compete effectively in the new world you see ahead?
ACORTESE: I think that perhaps they have to be willing to live in a world that they don't control. Hopefully, no one will.
ChasFerg: I think they have no choice. I don't think they'll be able to control this one, particularly if they also want to adhere to their other proprietary standards.
JackBW: I'm afraid that's it for tonight. Thanks. We're delighted you were with us, Charles, and thanks for your help, Amy.
ChasFerg: Thanks for having me. Goodnight, Amy and Jack.
ACORTESE: Thanks, everyone, and goodnight!
OnlineHost: Thanks to Charles Ferguson, Amy Cortese of Business Week, and all the BW Online team for this conference on the software revolution. And thanks to all of you on AOL, with apologies to any of you whose questions we didn't have time for.
If you'd like to continue the discussion, we invite you to move to the BW Online Chat Room. Or you can post comments and questions on the BW Online Message Boards. Transcripts of this and all other BW Online conferences are available soon after the event (under Talk, Special Events, or Search BW, and for this event also in BW Online's Computer Room, under What's New).
For yearend tax tips, come to the Odeon for another BW Online conference Tuesday, Nov. 28, at 8 pm ET. And remember to join us in the Globe every Sunday at 9 pm ET for our weekly conference, usually featuring the Cover Story in the current issue of BW. Thanks again and goodnight!
Copyright 1995 by The McGraw-Hill Companies, Inc. All rights reserved.
