The X Internet: Leveling the playing field for businesses in developing nations

2. The X Internet: Leveling the playing field for businesses in developing nations Navi Radjou Senior Analyst Eroica Howard Research Assistant to the CEO

3. ????? Web Email Telnet Gopher WAIS FTP 1970 1975 1980 1985 1990 1995 2000 2005 2010 Waves of Internet innovation Internet users

4. Theme The X Internet will let businesses in developing nations do more with what they have

5. Agenda • What’s behind the X Internet? • What is the X Internet? • Early adopters of the X Internet in developing nations • When will these changes take hold?

6. What’s behind the X Internet?

7. 1981 1991 2001 4 MHz 8088 25 MHz 80486 2,000 MHz Pentium 4 0.1 MB floppies 30 MB hard drive 100,000 MB hard drive 0.3 Kbps modem 9.6 Kbps modem 300 Kbps share of T1 line* Bandwidth lags other technology improvements CAGR 50% 62% 27% Computing Storage Bandwidth * Though most PCs and servers ship with 100 Mbps networking interfaces, actual Internet throughput remains limited by corporate Internet connections

8. Moore’s Law Bandwidth continues to lag processing and storage technologies

9. Today’s “last-mile” bottlenecks

10. X Internet Moore’s Law Client/server The Web Mainframes and Green screens X Internet moves beyond bandwidth’s limits

11. What is the X Internet?

12. The X Internet refers to two “Xs” An executable Internet that supplants today’s Web An extended Internet that connects to the real world

13. Endpoints Executable Internet builds conversations Server

14. Account summary The Web only provides answers How much is in my account? The Web

15. What should I do with my account? Financial services tools (executables) The executable Net creates a conversation The executable Internet Two-way conversation about my account

18. Isn’t this just Java? • Java is a piece of some solutions • But there are other alternatives

19. Extended endpoints Endpoints Server Extended Internet -- an Internet of things

20. Internet computers Digital Internet users Vehicles Physical Telephones Buildings The X Internet connects digital to physical

21. WhereNet devices simplify supply logistics Temp: 52° F Fuel: 1/2 tank Door: Closed • Tag is integrated with door, fuel, and temperature sensors • Sensor data is transmitted every few minutes

22. WhereNet devices simplify supply logistics Yard inventory is conveyed to users through maps and reports Colors indicate trailer status and alert conditions

23. Early adopters of X Internet in developing nations

24. X Internet pioneers in developing nations • Hanssem Kitchen Ware (China) • EAN International (www.autoidcenter.org) • CK Tang Department Store (Malaysia) • UNCTAD/Savi Technology partnership

25. Case study: CEMEX (Mexico) • GPS-enabled truck fleet • 20-minute delivery window • Savings: $100 million

26. When will these changes take hold?

27. High 5 4 3 2 Low 1 The three waves of X Internet adoption • Product fit • Bits-to-atoms ratio in end products • Intangibility of supply chain assets 1 2 3 4 5 Low High • Industry readiness • Value chain simplicity • Propensity to adopt cross-firm apps

28. Devices (billions) Spend (US$ trillions) $3 15 $2 10 $1 5 Spend Devices 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 X Internet devices and spending

29. Summary • The executable Net will supplant the Web • The extended Net will connect digital to physical • The X Internet will let businesses in developing nations do more with what they have

30. Thank you Navi Radjou Eroica Howard nradjou@forrester.comehoward@forrester.com +1 617/613-6119 +1 617/613-6295 www.forrester.com