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The Future Is Here. Can It Be Managed?

Key Technologies are arriving, but their deployment poses major challenges.

To take a snapshot of the future, visit the center of the universe for broadband and mobile technology. The South Korean capital of Seoul is circled by a lightning-quick fiber-optic network, pumping high-speed content into the high rise offices and residences that extend to the mountainous horizons in this city of 12 million people.

On the streets, buzzes, chirps and musical cadences of customized ring tones are sounding off everywhere. Teenage girls chatter into matchbook-size cell phones that they wear, like jewelry, around their necks. Young adults catch up with their text messages while riding crowded subways. In cafes, it’s not unusual to see business colleagues sitting around a table in suits and ties talking individually into their mobile handsets, oblivious to one another. On their walk back to the office, they can turn on a new service that delivers real-time television onto their color handset screens.

It’s all part of the country’s bid for “ubiquitous computing,” a dream shared around the world. Elsewhere it might be called “embedded” or “utility” computing. But the common aspiration is that everybody should have access to voice, music, video and data services on any device they choose€¦quot;wherever they happen to be.

Increasingly, it seems the technologies that will enable this vision already exist or are close to being perfected, panelists told the 1st annual World Information and Communication Technology Summit in Seoul (organized by Chief Executive in cooperation with the Ministry of In-formation and Communication and Saturn Communications). Third-generation mobile telephony is rolling out in key markets (see story, page 41). Companies know how to build the underlying networks that will accommodate converged offerings (page 43) and the semiconductor industry is rapidly developing new chips (page 46). Moreover, it’s becoming clear that proprietary software cannot completely dominate this emerging world order (page 48).

Ironically, then, the key challenge in building the technological future isn’t technology.

One major conundrum is policy. Will governments allow cable operators to offer Voice over Internet Protocol (VoIP), which could completely disrupt the business model of major telecom providers? And how will government agencies that regulate telecom service providers and those that regulate broadcasters cope with the fact that the two industries are blurring? Will governments create partnerships with the private sector and articulate national technology visions to force the adoption of standards so that networks can be “interoperable,” or seamlessly integrated?

For chief executives, it’s clear that the information technology and telecommunications industries, once considered separate, are in the process of being smashed together and the new rules of engagement will have to be defined. “As the two industries come together and this capability of embedding invisible computing around the world starts to change how we communicate and how we interact with our services, there will be a lot of challenges to promote an open standards-based environment,” said John Giere, chief marketing officer of Lucent Technologies.

Who’s Who

Rob Chandhok is vice president of engineering, Qualcomm, San Diego

Daeje Chin is minister, Ministry of Information and Communication, Republic of Korea, Seoul

Shin Cho is senior vice president, strategy and planning, SK Telecom, Seoul

Gerry Collins is director of product marketing, Nortel, and vice chairman of the UMTS Forum, London

John E. Davies is vice president, sales and marketing, Intel, Santa Clara, Calif.

Steven D. Fitz is president, Asia-Pacific/Japan, EMC, Hong Kong

Jürgen Geck is chief technical officer, SUSE Linux, a unit of Novell, in Nuremberg, Germany

John Giere is chief marketing officer, Lucent Technologies, Murray Hill, N.J.

William J. Holstein is editor-in-chief, Chief Executive magazine, Montvale, N.J.

Hyun Jin Ko is president and CEO, Korea IT Industry Promotion Agency, Seoul

Josef Lorenz is senior vice president, solution management, Siemens Communications Fixed Networks, Asia Pacific, Kuala Lumpur, Malaysia

Farhad Mafie is president and CEO, Savant Company, Irvine, Calif.

George Mansho is vice president, Asia Pacific, CDMA Development Group, Costa Mesa, Calif.

Philippe de Marcillac is senior vice president, IDC, Hong Kong

Russ Mitchell is West Coast editor, Chief Executive, Berkeley, Calif.

Shirish Netke is chief strategy officer, Aztec Software, Santa Clara, Calif.

Prashant Pathak is principal, McKinsey & Company, Toronto

Jeffrey Rothfeder is an author and journalist, based in Plainsboro, N.J.

Yong Shu is vice president and general manager, Asia Pacific, Riverstone Networks, Shanghai

Joo Young Song is executive vice president, KTF, Seoul

Moon S. Song is president and CEO, Pantech & Curitel, Seoul

Martin Taylor is general manager, platform strategy, Microsoft, Redmond, Wash.

Nam-Sung Woo is executive vice president, Samsung Electronics, Seoul

Chang Bun Yoon is president and CEO, Hanaro Telecom, Seoul

The key question for business is, What will customers pay for and how can we organize ourselves to deliver that at a profit? Current distinctions, such as the one between fixed line and wireless telecom providers, may no longer make sense. “The difficulty is not in the technical space,” said Daeje Chin, minister of information and communication. “If you make the networks interoperable, that’s a done deal. That’s easy. But when you talk about service operators working together, and having them converge their services, that’s the key. It’s a licensing issue and a business model issue.”

So a period of disruptive change lies just ahead for almost all players in IT and telecom. It is in places such as Korea that many chief executives are looking for hints of how that is going to happen. The country has achieved remarkable success in broadband, handheld devices, semiconductors and display devices. “The strengths are that we have a world class IT infrastructure and a lot of subscribers,” said Chin. “Fortunately, there is a big pool of consumers who want to adopt early innovations. That’s a big benefit to us. Once we figure out the products and software, we can test them, debug them and finish them.”

Giere, whose company has maintained a Bell Labs research presence in Korea for 25 years, says his company has learned about home networking and also about software that allows a Korean subscriber to play a game on his or her home television screen, leave home and continue playing on a mobile device and even go to a friend’s home and “ignite” that same session on the friend’s devices. Lucent is exporting some of this know-how to other markets.

Siemens has been in Korea since the early 1960s and is involved in many different sectors of the Korean economy, but in the ICT industry, last year acquired 51 percent of a Korean networking company, which is a key player in building metropolitan-level Ethernet switches. Josef Lorenz, senior vice president of Siemens, said most of the switches that Siemens is building in Asia are based on Ethernet technology and are in sharp contrast with those it is building in Europe and North America, which tend to be Asynchronous Transfer Mode networks.

Siemens’ version of ubiquitous computing is called “Life Works” and it is aimed at providing a unified user experience for both consumers and companies. Lorenz believes that residential gateways in homes will be the mechanism that combines interactive entertainment, gaming, video and other services. He said businesses, too, are looking for collaboration tools. “You know who’s online and who’s offline,” Lorenz explained. “You are linked by instant messaging, video communications and document sharing whether you’re at home or on the road or in the office.”

Internet-based gaming in Korea is the big story for EMC, the data storage company, said Steve Fitz, the company’s president of Asia-Pacific. “The online gaming experience here has been tremendous for us,” said Fitz. “Most of the large online gaming providers are largely EMC customers. We’ve leveraged that experience not only in Asian markets but also globally as the online gaming community expands.”

Korea, which is EMC’s second largest market in Asia, after Japan, has been aggressive in using EMC’s Legato software for backing up and protecting data. Koreans seem to have a cultural predisposition to make the software work even while Japanese customers do not. “As we have seen historically in this market, our Korean customers leverage new technology faster than most markets,” Fitz said.

Although Korea is smaller than Japan, it does have some technological advantages, said Philippe de Marcillac, senior vice president of IDC. “The nimbleness of IT in Japan is actually not that good,” de Marcillac said. “Korea is showing clear signs of being able to overpass that and establish a form of leadership in the Asia-Pacific region.”

De Marcillac said a key challenge for Korea is to develop the content that will be distributed over its networks into all manner of devices. “Our research shows that people don’t buy €˜cool’ devices€¦quot;it’s a question of the content and what they can do with the devices,” he said. A further challenge is overcoming language and cultural barriers in foreign markets.

Chin does acknowledge that Korea’s tech sector has some weaknesses. “We are heavily dependent on materials and components from overseas and the venture capital companies are still young,” the minister said. “We have some weakness in the ecosystem, particularly in small and medium-sized enterprises.”

But Chin believes his IT 839 plan can keep Korea moving forward. That plan involves eight new services, three new infrastructures (including a broadband convergence network projected to handle a 100-megabit capacity) and nine new services such as digital television. The domestic enthusiasm for cutting-edge technologies will continue to give Korean companies an insight into emerging practices. For example, more than 10 million Koreans, out of a population of 47 million, are involved in blogging online.

Chin, who managed the construction of Samsung Electronic’s first DRAM semiconductor factory in 1988 and went on to lead the company’s consumer electronics division, has big ambitions for Korea’s technological future. “As I have done in semiconductors and digital products while I was in the private sector, I think I can make Korea a high-tech hub worldwide,” Chin said. Many global technology companies, it seems, are betting he’s right.

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