This is the first in a series of reports that Business & Technology will be publishing on technologies being developed in the world's IT laboratories that could appear commercially in the next two to five years.
The reason for the medium-term focus is simple. If you'd had five years' warning of the impact of e-business, wouldn't you have factored it into your five-year plans? The sudden emergence of e-business demonstrates, as never before, that 'business as usual' is as out-of-date as the dinosaur. Businesses in the future will be faced with increasing numbers of discontinuities and the source of many of them is already being determined in the world's IT laboratories.
Our Lab Reports are designed to open a window on what research labs are working on and which projects may have commercial implications in the near future. Each will discuss any remaining obstacles to be overcome in realising a particular technology and its potential market impact.
The projects discussed may not individually change the world but they will have the potential to change the way your business functions or the nature of your industry.
In The Pipeline
Microsoft operates four research laboratories, in Beijing, San Francisco, Redmond and Cambridge, England. The research work at Cambridge is broadly split into seven categories: hardware systems, information retrieval and analysis, integrated systems, machine learning and perception, networking, programming principles and tools, and security.
Current projects include:
Much of this research is necessarily long-term in approach and uncertain in its specific commercial application. However, much may be incorporated in commercially available products in the next five years. In this article, we focus on e-books, an integrated systems project currently under way in both Cambridge and the US labs.
Are you one of those people who hates reading large amounts of text onscreen? Do you routinely print documents off so you can read them at your leisure on the train, in bed or wherever you choose? If so, you could soon be in for a change of heart or habit - as could the whole book publishing and distribution industry.
What will bring about this change is the advent of e-books. In fact, electronic books are already here in their initial form and early versions have been winning plaudits. The base technology is proven and can be enhanced fairly easily. And if acceptance of the technology runs at even a fraction of the levels experienced with mobile phones, it could significantly alter how most people work and relax, and revolutionise the book industry.
And the potential consequences don't stop there. The delivery platform for e-books is a PocketPC. Smaller than the typical desktop machine, the PocketPC nevertheless holds similar if less extensive software facilities. The implications for laptops are grave. Despite their widespread acceptance in recent years, laptops can be an uncomfortable compromise between physically larger desktop systems and something that is easily portable and provides similar facilities.
For many users and applications, the PocketPC could prove a better compromise between facilities and portability than the laptop. Laptop sales would clearly suffer, and there might even be fewer desktops in those organisations with lots of staff out on the road or where hotdesking is practised.
First and foremost, nobody should underestimate the impact of e-books on publishing. Book publishing is a significant industry in itself, with people working not only on the selection and refinement of texts but their replication, distribution and sales. Perhaps more importantly, ever since Gutenberg and Caxton, media industries have had a huge effect on everybody's life. Radio and television both emphasised this effect, but also changed it. E-books could, without doubt, instigate the kind of change wrought by the invention of the gramophone and the camera - but with one big difference: they will do it in five years rather than 150.
Like their name suggests, e-books are books in electronic form. But to analyse their potential effectively, it makes sense to separate the constituent technologies from each other. First, the delivery mechanism is a PocketPC, a Microsoft trademark. The relevant software on the PocketPC, generically called e-book software, is primarily ClearType, although there's rather more to it than that. Then there's the e-book itself, produced electronically in a form appropriate to the e-book software.
Currently, PocketPCs are made by Casio, Compaq, HP and Symbol, but anyone making palmtops could make them in liaison with Microsoft. They usually weigh about the same as the average paperback book (around 9oz or less), have a screen the size of a business card (3 by 2.5 inches) with a resolution of 320 by 240 pixels, and a battery life for six to eight hours' continuous use.
The hardware itself is not wildly different from the average palmtop. It's the additional audio-visual functionality and familiarity of Microsoft software that may justify prices double those for palmtops, currently in the $400-$900 range. For more detail on the hardware, visit pocketpc.com.
The software is held in ROM and consists essentially of Windows CE, all the comms software you're likely to need, and Windows Media Player, Microsoft Reader and handwriting recognition software for use with a stylus. In addition, there are versions of Microsoft Office, including Outlook, adapted for PocketPCs but which can exchange files and messages with desktop PCs via ActiveSync software.
What we're concerned with here is Microsoft Reader, the core of which is the ClearType software. ClearType uses colour monitors' association of three colours for each pixel to refine the crispness of the image of black type on a white background. The success of this, which seems now to be established, is the first CSF [WHAT?] for e-books. Another CSF has been to accept that the printed book has stood the test of time and to copy it meticulously. You turn pages rather than scroll, and footnotes and illustrations are catered for. In essence, what is being created is a book with all the attributes of the average paperback except that the pages are smaller. But what you also have at the same time on the same device is a subset of what you have on your desktop PC, including the ability to play music and watch video clips.
The book market, like the video market, is software-driven. So another CSF will be the rate at which books can be e-book-enabled. Key to this are the standards currently being formulated and the pace at which publishers take up the technology.
Currently, PocketPCs come with some 30 classics (Alice in Wonderland, Great Expectation, Tom Sawyer, etc) pre-loaded, with a further 15 Star Trek titles freely downloadable via a deal with Simon & Schuster and Barnes Noble. So some parts of the book publishing industry are alive to the challenge. The principal means available and foreseen for adding books to a library are Internet downloads or CompactFlash cards.
Drama looks guaranteed given that the industry most affected, book publishing, is one of the most hide-bound and traditional of all. Accordingly it is the least well equipped to respond effectively, and could easily end up with its head in a basket under a revolutionary guillotine that is already falling.
Consider Amazon.com, a company that has already shaken up book-selling. Suppose it can dispense with all physical aspects of its logistics system and become an all-electronic enterprise, as can all other booksellers. Imagine the impact on such high-street stalwarts as WH Smiths if book distribution becomes electronic. What will be the impact on the printing industry if physical books largely disappear? What if your local library can supply unlimited copies of most of the books in the world? And anyone who ever wanted to write a novel can publish it more easily and cheaply, although the problems of making a living from writing may not change greatly.
The ramifications are clearly enormous. Equally clearly, the changes won't all happen overnight. The effects are likely to be felt within the next five years and even more dramatically in the succeeding five, following the usual S-shaped learning curve. So it's worth thinking a bit more precisely about what may change and when. The most obvious early casualties could be business books. Business people are the ones most likely to have a PocketPC and find using the technology natural. You get any pending business out of the way by looking at a spreadsheet and writing some memos, and then you read that book you've been intending to - all on the same device.
Students could be similarly seduced by the ability to append notes to texts as they read them and recall them as needed, by subject across their reading list, for revision. So bye-bye traditional student book market. The mass, pulp paperback market is equally susceptible. You just load your book along with the train/plane timetables and diary on the same device. When travelling, many people may prefer having their essential work documents, favourite music and a small library of paperbacks in their pocket rather than their case.
What will stay, for the foreseeable future, is the market for printed books as valued objects in themselves: the coffee-table book. You can add collectors who line the walls of their homes with first editions. In the future, though, first electronic editions may be all there is and they won't have the same cachet.
Some of these changes and the rate of change can be gauged through the consequences of MP3 technology for the music industry. And one corollary is that e-books, together with advances in PC printing technology, mean that the often separate book, music and picture publishing industries are set on a collision course. If the book publishing industry tries to defend itself, as it traditionally has, by pleas for the protection of established practices, it will fail and be supplanted.
It's taken centuries to get from Gutenberg to where we are now. It could take 15 years for the changes induced by e-books to bite globally but, locally and in specific market sectors, significant change is likely within five years.
Microsoft's own forecasts suggest that by 2003 we'll see e-book devices for under $100 and with a battery life of 24 hours. By then, any parts of the traditional book market that haven't reacted to the challenge will be obsolescent, and within a further five years dead. Drag in embracing this technology will come from technophobes and the older population, but this drag is already being undermined on other fronts: home PCs and Internet use, digital television, mobile phones and WAP devices.
E-books are based largely on proven technology that is easily capable of enhancement. There are therefore no technological hurdles to be overcome. Acceptance of the technology seems similarly inevitable, with only the pace of acceptance debatable. *B&T*'s verdict must be that e-books will succeed.
The rate of acceptance of e-books in the market is likely to follow the same S-curve as for all new technologies. Book publishers who fail to plan for the upward 'knee' in that curve or fail to plot it accurately before its arrival will cease to exist. And this technology will, at some point in the next 10 years and possibly sooner, revolutionise the traditional book publishing and distribution market.
This was first published in July 2000