Trends in emerging information services
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Trends in Emerging Information Services. September 14, 2000 Toshiharu Aoki President & CEO NTT DATA CORPORATION. Outline. 1. How we should recognize the Internet era 2. How we should recognize the change in services 3. How we should recognize the change in business mechanisms and rules

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Trends in emerging information services

Trends in Emerging Information Services

September 14, 2000

ToshiharuAoki

President & CEO

NTT DATA CORPORATION


Outline

Outline

  • 1. How we should recognize the Internet era

  • 2. How we should recognize the change in services

  • 3. How we should recognize the change in business mechanisms and rules

  • 4. How we should recognize the change in intellectual creation

  • 5. Summary


1 how we should recognize the internet era

1. How we should recognize the Internet era


Perception of development in a span of 20 years

1981

1983

1994

1996

Perception of development - in a span of 20 years

1980

1990

2000

1980s

1990s

Before PC

PC era

The Internet era

1981

PC Year One

1994Internet Year One

PC

Gold Rush

InternetGold Rush

Optical fiberloop

27%

Optical fiberloop

36%

Analog circuits

Digital circuits

SPC

1982

Network digitization start

1997Complete network digitization


Progress of digitization and creation of new markets

Progress of digitization and creation of new markets

  • Information appliances

  • (TV and PC)

  • Content

  • Computer

  • Satellite TV

  • Optical fiber

  • xDSL

  • The Internet

  • Network

Encouraging rise of new markets


Business climate in 2000 forecast

(billion)

$400

$350

$300

360

$250

$200

186

$150

130

$100

$ 50

39

10

10

0

Japan

Europe

U.S.

Business climate in 2000 (Forecast)

Manufacturing

Non-manufacturing

B to B

B to C

[Source: Electronic Commerce Promotion Council of Japan (Ecom)]


The internet changes society and industry

The Internet Changes Society and Industry

  • The Internet frees us from unconscious limitations, and “Consumer-oriented” concept appears

Perfect market

Free from

information imbalance

Perfect community

Free from

time and space limitations

Perfect value

Free from

unified common value


Perfect market

Internet

Perfect Market

  • With the information imbalance between suppliers and consumers rectified, we move closer to optimal markets

    • Consumers can get the information they need to make their own comparisons and selections

    • Suppliers get information about consumers, enabling them to offer better goods and services

    • Greater freedom is available in the setting of prices (ex. Internet auctions)

Suppliers

Consumers


Perfect community

Perfect Community

  • Communities are formed that transcend time and space limitations

    • People can join global communities anytime

    • People can carry individual private space around with them wherever they go

    • Transformation takes place from closed communities to active communities that influence society

      (ex. development of Linux)

  • Individual activities influence communities and society in real time


Perfect value

CD

CD

CD

Niche

Perfect Value

  • Diversity is recognized with regard to people's

  • sense of value

    • Mega-trends and niche coexist

      • Mega-trends arise easily

      • Business opportunities arise

        out of the niche

    • Individual differences in people's lifestyles are acknowledged.

    • Saving time for / Taking time for

      ・Internet shopping vs. Going to the mall

      ・Personalized newspapers vs. Traditional newspapers

Mega-Trends


2 how we should recognize the change in services

2.How we should recognize the change in services


Change in service creation process

Internet

-----Browser-----

◆Graph~

………

………

………

………

◆Chart~

……………

……………

……………

……………

……………

Change in service creation process

  • Difference in perception of service between consumers and suppliers

Gap

News delivery

Sales of goods on homepages

Building e-mail environment

Developing and providing Web browser

New Service

Environment

Service

Supplier

Consumer


Impacts on the market

Impacts on the market

  • The Internet has caused a significant change in the market

Phase

Change

Key Word

The 1st

phase

Change in quantity

Efficiency

The 2nd

phase

Change in quality

Exploration

The 3rd

phase

Change in

environment

Creation


Impacts on the market1

Impacts on the market

  • The Internet has caused a significant change in the market

Phase

Change

Key Word

The 1st

phase

Change in quantity

Efficiency

The 2nd

phase

Change in quality

Exploration

The 3rd

phase

Change in

environment

Creation


Change in quantity

Change in quantity

  • New markets generated by the improved efficiency made possible by the network

    • Change in communications

      • E-mail

    • Networking of B to B transactions

      • EDI

    • B to B marketplace

      • From intermediary to info-mediary

        (The use of the Internet increases efficiency of intermediary service and distribution)


Impacts on the market2

Impacts on the market

  • The Internet has caused a significant change in the market

Phase

Change

Key Word

The 1st

phase

Change in quantity

Efficiency

The 2nd

phase

Change in quality

Exploration

The 3rd

phase

Change in

environment

Creation


Change in quality

Change in quality

  • The business emphasis shifts from quantity to quality.

  • The three perfect states made the formerly untouched area a new market.

Manufacturing cost

Order production

New market

Existing market

Mass production

Market needs

Fewer consumers

General public


Impacts on the market3

Impacts on the market

  • The Internet has caused a significant change in the market

Phase

Change

Key Word

The 1st

phase

Change in quantity

Efficiency

The 2nd

phase

Change in quality

Exploration

The 3rd

phase

Change in

environment

Creation


Change in environment

Change in environment

  • The Internet establishes itself and changes business.

    • Business mechanisms were replaced

    • Changes in market principle create new businesses

    • New businesses taking advantage of the potential of the new environment are expected to emerge


I mode service

Entertainment

News, information

Ticketing, billing

Financial services

Maps

Dictionary

Travel information

Dining, cooking

i-Mode Service

i-Mode Mobile Phone

Game

Distribution of accesses by content category

Shopping

Ticketing


Appearance of new services

1

2

3

4

5

6

7

8

9

*

0

#

Appearance of new services

  • The i-mode, which integrates the Internet with a cellular phone, is bringing a great change to our life style.

Rapid and accurate decision making

i-Mode

Cellular phone functions

!!

Mobile and portable.

Get necessary information on the street

(train time table, guide on restaurants, etc.)

Internet

??


3 how we should recognize the change in business mechanisms and rules

3. How we should recognize the change in business mechanisms and rules


Hype cycle

Hype Cycle

  • Cycle of e-business (business service)

Europe 1999 IPO

Post-Internet

business

Degree of expectation

The U.S. 1998

“e-Christmas”

Plummeting of .com company stocks

Dwindling interest by inventors

The U.S. 1997-1998

Initial Public Offering

(IPO)

Failure of conventional “stores”

Optimization

of e-business

Collapse of .com company stocks

Disclosure of e-business failure

Start of “.com”

Dwindling interest by companies

Internet

Web

Rise of real e-business

Over-expectation at its peak

Dawn of the technology

Disillusionment

Stable production

Awareness activity

1990-96 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

[ Source: Gartner]


Business technology and rules

Technology

Business

Rules

Business, technology and rules

  • Waves of e-business rules

Market demand push

Technology pull

Degree of expectation

“Real” e-business

・Business model

・International agreement (GBDe、WTO)

  • ・ASP

  • ・WebSI

  • ・Security

  • ・RASIS

  • ・etc….

Establishment of life style in which technology and business, as well as technology and service, converge and are in harmony

Technology

revolution

on usage

Creation of a new framework

as a base for real e-business

Provision of a stable base

Base=Technology, rules

Base=Technology

Awarenessactivity

Dawn of the technology

Over-expectation

at its peak

Disillusionment

Stable production

1990-96 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Approach to new service creation

Approach to new service creation

  • Technology alone cannot solve service creation problems.

  • It becomes important to devise business mechanisms and rules if new businesses are to be created.

  • - From technology-based service proposal to creation of real services

Technology

  • Protocol/procedure

  • Encryption and authentication

  • Standard codes and format, etc.

  • Billing and transaction

・Information disclosure

・Intellectual property

・Prevention of unauthorized access

・Protection of privacy

  • Change in procedure

  • Change in business practice

Business model

Rules (legal system, regulations)


What rules are

What rules are

  • Rules as viewed from market push.

Promote and help advancement of the Internet society

Market mechanism

Rules

Crime prevention

Encouraging people

to do new biz.


Market consensus in the consumer driven era

Market consensus in the consumer-driven era

  • Generation of new consensus suitable for the network society

    • Basic consensus

    • Consensus on value

  • The network society moves forward as mechanisms are put in place

Consensus

Internet

(bazaar)

$

Perfect market

Perfect community

Perfect value


To build a consensus

To build a consensus

  • System for building a consensus in the network community

Business/service

Business model

Mechanism

Methodology

Consensus on value(Price vs. value of services)

Creation of new services

Rules

Standards and specifications

Unification of data format, transaction rules, etc.

e.g.) EDI, XML

legal system, rules (GBDe, WTO)

Technology

Common functions

Essential functions in transaction process

e.g.) authentication, settlement of payment

Basic consensus

(Mechanism for smooth information sharing and distribution)

RASIS*

Physical assurance for services on the network

e.g.) No system failure

RASIS: Reliability, Availability, Serviceability, Integrity and Security


4 how we should recognize the change in intellectual creation

4. How we should recognize the change in intellectual creation


Changes in intellect creation

Business model

(E-commerce mechanism)

Changes in intellect creation

Software technology

(Applications, architecture)

Basic technology and theory

Hardware technology

(Optical, digital and LSI)

  • R&D responding to needs of the new era is required

Expansion of R&D area

Base = Technology

Base = Technology and rules

Era


5 summary

5. Summary


Summary

Summary

  • The development of the Internethasgreatly changed the business environment

  • From supplier-driven to consumer-driven environment

  • Convergence of technology, service and rules builds new business infrastructure

  • Consensus suitable for the network era (creation of new values) is essential


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