The dot-com implosion has left many managers wary of the promised wonders of information technology, but those who ignore the next phase of the Internet—dubbed Internet2—do so at their peril, says HBS professor Richard Nolan.
"The idea that information technology is over with the dot-coms is fallacious," Nolan charged.
In a lively discussion with about fifty HBS alumni held during reunion weekend this summer, Nolan, who spent a year's sabbatical concentrating on Internet2, described the current state and potential of the beast. Though its business applications remain to be seen, managers need to arm themselves with information and get ready for what he called "round two" of the Internet.
"Don't ignore the dot-com lessons; they're out there," Nolan said. Ever since the dot-com bubble burst, Americans have lulled themselves into a sense of complacency about IT that is not quite justified, based on all the work that continues to be done around the world, he said. Managers need to understand the opportunities and threats of Internet2 for their companies, because savvy new firms will come in and try to chip away at the incumbents. And what's more, all that is happening fast.
Don't ignore the dot-com lessons, they're out there.
— Richard L. Nolan
"I talk to managers about Internet2," Nolan said. The usual response? "Internet what? I thought Internet 1 was dead."
Some executives, he says, are experiencing "dot vertigo," that dizziness accompanying claims about all the wonderful ways the Internet is going to transform their lives. What they don't realize is that their fears make them discount the impact of the Internet in what Nolan called a very dangerous way.
Quickly and quietly, said Nolan, Internet2 is making inroads in important ways in collaborative learning and R&D. When privatization and business applications start to enter the picture, which he predicted would happen by the year 2005, managers will have much to gain—or lose.
Research In Real-time
The power of Internet2 lies in its ability to connect networks of networks. Currently, he said, universities and labs use it to connect researchers working on collaborative projects. These projects can range from building virtual reality models of the ear—a medical application—to studying the stars—a scientific application. Laboratories that have Internet2 enjoy real-time access to remote instruments.
A lab at the University of Pittsburgh, for instance, handles three-dimensional brain mapping that is "piped in" to various medical schools so students and professors can conduct online research and diagnostics. The University of North Carolina uses Internet2 for nano-research: building material from the atomic level up.
Other forums on the horizon for Internet2 include digital libraries and digital video. A DVD version of the Hollywood movie The Matrix, for example, can be downloaded via Internet2 in about thirty seconds, Nolan said. The same DVD would take approximately twenty-five hours to download via a standard DSL/cable line (and 170 hours—or more than seven days—via a 56K modem). Genomics and pharmaceuticals are other research arenas that should benefit from the speed of Internet2.
And speed was the key Nolan kept pressing. Not only is Internet2 coming into being quickly, but also all of its capabilities, such as virtual reality, interactive collaboration, and access to remote resources such as telescopes and diagnostic equipment, rely on speed.
Revamping The Business Mentality
Over the last thirty or forty years, business has had a skewed perception of information technology, Nolan observed. Business usually looks at IT as a way of automating transactions. Computers were imagined not to change the information structure of a business per se, but to make the existing structure run more efficiently. This idea came straight out of the industrial age, he said. "We even called computers 'machines,'" observed Nolan.
The whole concept of computers was that they were stand-alone objects. Now, when people can do collaborative work spanning time zones, the concept is a good bit different.
Sixty percent of the traffic on Internet2 is predicted to be between computer and computer.
— Richard L. Nolan
Internet2 was launched when a group of academics from various university computer science departments wanted to work together on a network of networks. The National Science Foundation chipped in, and Internet2 was born. Today, sophisticated networks are being hooked up today among Europe, North and South America, and the Asia-Pacific region. Cisco and Microsoft are involved "in a big way," Nolan said.
Right now, Internet2 is probably going through the same cycle that Internet 1 went through—from government-sponsored research and only later to partnerships and business applications—but it will develop much faster that Internet 1 has, he said. "Sixty percent of the traffic on Internet2 is predicted to be between computer and computer, so there's a whole other set of applications," he said. "Think of your automobile. Thirty computers are [embedded] there. Think of the ability of computers to communicate with each other to do diagnostics."
The last-mile problem was "killer" in Internet 1, conceded Nolan. "With Internet2, they're not worried about the last-mile problem—at this point. If you discover the killer app, ultimately that will probably lead to some economics that will expedite that.
"It's a serious problem," Nolan added. "But the researchers have said, 'We can't worry about it now.'"