Business & Economy
Why the internet matters more than ever
May 12, 2023
With more than five billion people accessing the internet every day, the online world represents fertile ground for business growth. Here, Mark Harrison, RTC North scaleup director, uses his vast telecoms and software sector experience to highlight the importance of cyberspace to SMEs.
My 40-year career has moved somewhat fluidly between software, telecoms and satellites.
From the European and German space agencies to roles in global telecoms providers, infrastructure builders, software and content delivery, major consultancies, start-ups and bootstrapped enterprises, my vocation has been as enjoyable as it has been broad.
Now, you might think a career spanning both telecoms and developing applications is a common path.
It isn’t. Most people stay in one or the other.
Boxes, though, were never my thing – I see an opportunity and I take it.
Traditionally, developers had to work within the constraints of networks and the computing power and storage available to them.
Adoption was limited to those with networked devices, predominately Windows PCs with Intel Processors, known as the ‘Wintel’ platform.
Historically, the legacy telcos were either national or regional monopolies, who acted as gatekeepers and charged tolls to reach end users.
Moving data around was subsequently very expensive and dominated by point-to-point technologies.
Each packet was transmitted with an address and a confirmation was sent upon its arrival.
This, and the high price of leased lines, meant software – if it was distributed at all – was stored in an on-premise server and shared on the LAN inside that building.
Only big corporations could afford to connect their global locations and create the first wide area networks.
Mobile networks at this time were built for voice. Any data was an afterthought.
Indeed, mobile data was slow and expensive, with SMS originally used by engineers to message each other.
Yet this world of such unthinkably bad service and dial-up modems was only 20 years ago.
The internet has transformed the telecoms and software industries immeasurably.
The average price per bit, which is how telecoms companies measure their revenues, has fallen at a compounded rate of 23 per cent, per year, for 25 years.
That will continue to do so, as long as the internet continues to dominate the telecoms industry.
The internet itself isn’t a single network, it is an amalgamation of networks that have peering connections, and sits on top of other networks to form its global footprint.
It has four primary delivery mechanisms: wireless (4G/5G), twisted pair, coax and fibre optics.
Figures show 5.3 billion people have regular access to the internet, and this ability is driving great empowerment of business models.
Over the last 25 years, one per cent of GDP growth per year in the developed world has come from innovations brought about by the internet.
Being connected now means everyone can have multiple locations in multiple jurisdictions, not just major corporates.
We are seeing faster growth in markets that have historically suffered from low tele density but are now, with wireless data networks, offering application providers to a huge new customer base.
Internet traffic growth is largely driven by three things: the number of people connected, the minutes they spend using it every day and the bit intensity of the application they are using.
The pandemic brought a huge challenge to global networks, and only the internet of today, and the applications it enables, allowed the world to keep working.
If the pandemic had happened ten years ago, the effect on global productivity would have probably been catastrophic.
We are much further away from hitting the limits of what is possible in network access and speed than we are at hitting the limits of processor power and storage.
Moore’s Law isn’t so much a law than an observation by Intel founder and chief executive Gordon Moore, which says the number of transistors on an integrated circuit doubles every two years.
This truism has resulted in 53 years of compounded 55 per cent price performance improvement in MIPS (millions of instructions per second).
That improvement, however, is starting to hit up against the limits of technology.
The other way to speed up computing is to increase clock speeds, but as that happens, we generate ever more heat, and we’re already seeing limitations in the ability to cool chips.
The other factor is where data resides; 25 years ago, 90 per cent of MIPS in the world were produced on a ‘Wintel’ platform.
Today, 90 per cent are produced on a mobile device.
The ability to move computing to the edge has reduced cost.
Growth and innovation will come from the mobile phone and the vast array of distributed devices on the edge of networks.
Ultimately, the internet allows small business to think global.
And if you haven’t started thinking about how you can leverage the internet and technology to increase the reach of your business, get on it.
Because there are 5.3 billion potential entrepreneurs out there – and one of them might just eat your lunch.