Executives see swell of Net offerings on horizon – What’s the Internet’s next act? The technology industry seems to be emerging from its downturn ready to unleash a new generation of the Internet.

Last week, USA TODAY assembled a panel of some of the industry’s most influential players to talk about what’s ahead. The discussion took place in San Francisco, in front of about 200 members of Silicon Valley’s Churchill Club. It was moderated by USA TODAY’s Kevin Maney. Following are excerpts, edited for clarity and space.

By Martin Klimek for USA TODAY

http://www.usatoday.com/tech/news/2004-06-02-tech-roundtable_x.htm

Topic: The new Internet boom

Q: Tech companies have been saying that a new layer of the Internet has been laid down, and that we’re going to see new gadgets and services. Is that something you see?

********************

Meet our panel

USA TODAY hosted six top tech executives for its panel discussion last week. The panelists:
Photos by Martin Klimek for USA TODAY
Marie Alexander,

CEO of Quova. The company, founded in January 2000, hired Alexander as CEO in October 2000. Quova holds key patents in geolocation — a technology that allows a Web site to know where, geographically, a visitor is sitting, though it doesn’t reveal a specific address. Customers include Major League Baseball, Absolut and Amazon.com.

Quote: "There are reasons to have borders on the Internet."

Marc Andreessen,

Chairman of Opsware (OPSW), which automates major data centers for companies such as EDS and MetLife. Andreessen is best known for creating the Mosaic browser, which led him to co-found Web pioneer Netscape Communications with Jim Clark in 1994.

Quote: "At some point in the next five or 10 years, the Internet is going to essentially go dark."

John Chambers,

CEO of Cisco Systems (CSCO), the powerhouse in networking equipment such as routers and switches — the plumbing of the Internet. The company will have about $21 billion in revenue this fiscal year.

Quote: "This next decade’s going to be really when the Internet comes home to the average American."

Steve Jurvetson,

Managing director of venture capital firm Draper Fisher Jurvetson. Among the firm’s best-known investments are Hotmail and Skype. Jurvetson has been a leading backer of nanotechnology start-ups.

Quote: "Our e-mail will break if we don’t solve the spam problem."

Ed Zander,

CEO of Motorola (MOT) since January. He had been president of Sun Microsystems, where he helped CEO Scott McNealy battle Microsoft. Zander left Sun in 2002 to join tech investment firm Silver Lake Partners. Zander is pushing Motorola, already a leading cellphone maker, toward a range of devices that help the Internet follow a user everywhere.

Quote: "The Internet’s arrived when you don’t talk about it anymore — when it’s like electricity, it’s just there and it’s usable."

John Thompson,

CEO of Symantec (SYMC). He had been at the top levels of IBM before being recruited by Symantec in 1999. The company is a leader in network security for corporations and home PCs, and is best known for its Norton AntiVirus software.

Quote: "We see a hundred new viruses that hit our research laboratories every day."

*****************

Chambers: You haven’t seen anything yet. This next decade’s going to be really when the Internet comes home to the average American. This is the decade you see the applications, the gaming, the video coming to the home, the health care, the education that will truly change every aspect of our lives. The way people work, live, learn and play.

Jurvetson: You’re going to see an explosion in voice and video over Internet protocol networks instead of over traditional switch-line networks. It gives you amazing flexibility, the ability to pick from 10,000 channels of television programming, every possible fetish you could imagine in sports and hobbies.

Cisco has long held that voice will be free, and you’ll see that over the next couple of years. Companies like Skype and others are making telephony free.

Q: Can you explain Skype? (Draper Fisher Jurvetson has an investment in Skype.)

Jurvetson: Skype is a sort of viral phenomenon launched by the founders of Kazaa, the music-trading network.

It’s a peer-to-peer software program that runs today primarily on PCs but allows you to make free calls internationally. They use broadband connections, so the quality is actually better than you’ve ever heard. Free is compelling. How will they ever make money? They’ll talk about voice mail and other services.

Q: What does that end up meaning to Motorola?

Zander: I spent the last 15 years back in the (Internet) world, and now I’m on the other side in the communications world. As excited as I was about the Internet, I’m even more excited about the next decade.

We like to call it at Motorola "seamless mobility."

How many of you get up in the morning at home, hear some music that you’d like to take with you, you’d like to just be able to put it in this device very seamlessly, move into your car, play it, order the album, come home, have it recorded? Or you do videoconferencing from your car, get out of your car, keep it going on here, get to work, play it.

Making these seamless transitions is the next big thing. You know, not only Internet-enabled, not only a megapixel camera with flash, but this is the first surround sound MP3 stereo phone you can buy. (He holds up Motorola’s new E398 phone.)

Within 12 months we’ll be able to do four hours of songs. I’m not saying it’s after iPods, but if you listen with stereo speakers, it will blow you away. We like to think of this as "the device formerly known as the cell phone."

Alexander: Broadband access opens up a huge opportunity for increased productivity in the home.

When you go back to home health care, think about the things that can be accomplished, the information and diagnostics that could be sent back over those wires so that people aren’t having to go into hospitals.

Security is another area: While I’m at work or I’m away, looking to see what’s happening in my home, to be able to turn the television on, turn lights off, see whether my child care is taking care of my children in the way that I would want.

Topic: Overrun by spam

Q: Are we going to be completely overrun by spam?

Thompson: There are a number of technologies on the horizon that can deal with the problem. You also need to think about the economics.

In the physical world, someone pays a fee for the mail product that they distribute to your home. Today, that mail product electronically is free.

So if (Internet) service providers were in some way involved in changing the economics (by charging tiny amounts for e-mail), that would in fact drive down the volume of spam activity.

Jurvetson: Our e-mail will break if we don’t solve the spam problem.

There isn’t a simple one-time fix. It’s not as if a single Band-Aid from Microsoft will ever fix this problem.

From a biological analogy point of view, it’s like an evolutionary immunology problem.

You have these viruses that are evolving like crazy, a population of con artists who have come to the Web because that’s where there’s easy pickings, and they’re knocking off opportunities left and right. It requires a federated response, a systemic response — almost like the human immune system.

Q: We’re not used to getting spammed on our cell phones. Is that coming?

Zander: It’s a challenge, and it depends on what we introduce.

Thompson: So far, we have seen only a few attacks on small devices. But it is clear that as those devices grow in robustness, both in terms of computing power and storage, that they will become a target for hackers and crackers.

At this moment, because of the proliferation of Windows on almost every desktop around the world, that is a far more target-rich environment for people who want to inflict this insidious harm.

But as the number of mobile devices grows from a few million to hundreds of millions or hundreds of billions, the size of the environment will drive that community to shift their attention.

Protection needs to be on the device, and it needs to be in the network. It’s only through that combination of smart users, smart devices and a smart network that you’re really going to get the true benefit.

Jurvetson: Microsoft is like a global monoculture and therefore subject to catastrophic collapse. The pace at which viruses and worms spread is outstanding.

I haven’t had a virus in my Mac for 10 years. No one writes applications for the Mac, not even viruses, and it’s a safer world.

So there’s an argument for biodiversity in this economy.

Topic: Exciting developments

Q: What is the most exciting thing going on in your world right now?

Alexander: The whole idea of localizing the Internet opens up a lot of new things. From a personal level, it’s education in the United States, and taking what we see in technology and beginning to apply that to this huge problem.

Andreessen: In the middle of what was a pretty horrific recession we now have 10 times more people on the Internet now than we did five years ago. We’ve got 10 times or a hundred times more broadband. We’ve got Internet advertising, which is a real phenomenon. We have a whole generation of citizens now used to doing business online, used to buying things online, and used to communicating online.

On the technology side, we’ve had over that period about a 10 times reduction in price in a lot of components that go into building the Internet and building services on the Internet, like servers and software and networking equipment.

All that’s really adding up. The economics of the Internet have undergone something like a thousand-times swing. If you’re going to launch an Internet site or an Internet business today, it’s probably going to cost about a tenth of what it would have cost five years ago, but you’re going to have 10 times more consumers you can address and probably 10 times the advertising revenue. There’s a seriousness and commitment and dedication and effort and investment going into it now that is a lot more interesting and a lot more real than what was happening in the ’90s.

Chambers: The proliferation of broadband and the faster speeds at the core of the network open a whole new set of applications, where the devices that Ed showed, and that John protects from the security side, and that Steve invents, would just really roam through your own network, through the Internet itself. It’s the intelligence moving into the network so it’s completely transparent to us in terms of where something is stored, where the applications are, where the processing power occurs. It is going to turn everything on its head. It will make the last decade look actually in slow motion.

Jurvetson: About a third of what we’re doing is actually nanotech. What we’ll see in the next 20 years is a conversion of information technology with nanotechnology and biotechnology.

Nature just continues poking us in the eye — continues to embarrass our best engineers on how to do things. Whether you’re designing chips or software, nature gives these wonderful existence proofs, like the human genome. Smaller than Microsoft Office, right? Pretty amazing. Says a lot about both.

The human brain is 100 million times more efficient in calculations when it comes to power-per-calculation. Look at many chips that have been canceled recently because of power problems, as they try to miniaturize. We assemble things from proteins and small molecular compounds in our bodies every day. It’s a remarkable factory. We’re starting to understand it. We’re starting to decode and decipher the information systems of biology. This not only helps in medicine, but it’s giving inspiration to the computer programmers. All the interesting and hairy problems of computer science will probably be solved by something that has a biological metaphor at its root.

Thompson: We see on average seven new software or hardware product vulnerabilities every day. We see a hundred new viruses that hit our research laboratories every day. The state of the art and the technology … has been reacting to those problems once they have … manifested themselves. The key is shifting from a reactive paradigm to a proactive paradigm.

Blaster (a virus), which many of you probably got hit by, attacked a vulnerability (in Windows) that was identified six months earlier. Slammer attacked a vulnerability identified just 26 days earlier. Most recently, there was an attack on a vulnerability that had been discovered three days earlier.

The human intervention that stops that from occurring is not going to be able to keep up. We need to automate the process. The time and energy that we are spending today is on how quickly we can identify a new problem and automate the process of protection.

Zander: It’s good after the last few years to see innovation back — really back. I’m not saying we’re back to the crazy days. It’s about looking at what we do every day and bringing together the home, the auto, the enterprise, and the person seamlessly.

We talk mostly about the Internet with people-to-people. Even (cell phones) are people-to-people. But if you look at people communicating with things, like: Oh, my car is unlocked — lock it. I can think of more extravagant examples in health care. People-to-things and things-to-people. My car talking to the service rep when I’m on the road if there’s a problem.

Even bigger is things-to-things — every light, every thermostat, every piece of clothing gets tagged with RFID (radio-frequency identification tag), and it’s going to open up an enormous amount of opportunity for corporations to get more productive and for people to experience new things.

Topic: Encrypting the Internet

Q: What are the coming big challenges for the Internet?

Andreessen: Today, you send e-mail. You do instant messaging, you do phone calls on Skype, and the bits are flying over the network, and they’re not encrypted. Governments can monitor them, your boss can eavesdrop on them, tax laws can be enforced, all kinds of things can happen.

Also, if you’re a citizen in a country where there is censorship, the government can censor what you can do.

The technology exists and actually has existed for quite some time to be able to take all of those applications, all the things we do on the network — browsing, buying, shopping, learning, communicating, e-mailing, phone calls, everything — and encrypt it all and make it all private, anonymous, unreadable, unbreakable.

At some point in the next five or 10 years, the Internet is going to essentially go dark. Somebody is going to throw a switch and — boom — things are going to go encrypted. When that happens, everything is up for grabs, because then if I want to buy prescription drugs online from Mexico, nobody is going to know.

Thompson: Clearly encryption technology will be an important part of how you protect the information. Today’s encryption technology, however, is very, very cumbersome.

When you try to scale that up now to the entire Internet infrastructure, while it’s possible, it’s a longer-term probability than something that is likely to happen near-term.

Zander: We still talk about the word "Internet." The Internet’s arrived when you don’t talk about it anymore — when it’s like electricity, it’s just there and it’s usable.

Today, we’re just way too "tech." The big change is going to be when the Internet follows you, not you trying to follow the Internet. And your preferences are taken with you and your life is affected the way it’s affected today by lights in this room.

Topic: The Internet becomes more local

Q: The Internet has always been seen as global, but there is a possibility of the Internet becoming more local. What’s going on?

Alexander: There are reasons to have borders on the Internet. There are many things that can be enabled by understanding where the user is.

You have situations where there are laws and requirements in one country but not in another. In Mexico, it’s OK to buy an antibiotic over the counter. In the United States, it is not.

There are very good reasons for being able to understand geography and understand those borders on the Internet. And it can be done in a way that doesn’t take away anybody’s anonymity.

An example of that is Major League Baseball, which last year introduced the ability to watch a baseball game on the Internet.

But MLB had sold (video) rights to those games to (TV stations) in certain geographic areas.

To be able to take that business to the Internet, MLB had to be able to determine if you were in an area where they had already sold rights to someone else.

And in that case they would block you off from being able to see that game (though you could see all games to which local rights hadn’t been sold to someone else).

Jurvetson: There’s been a globalization trend for a few years, whereas this new trend that hasn’t yet fully played out is taking advantage of local services.

It’s understanding where someone is based, either for personalization, for searches, for products and services, location-based services over wireless networks, you name it.

Topic: Searching, and the next big thing

Q: Search is a huge part of what we do on the Net. It seems like search is going to get more personal by adding localization and combining with social networking. What’s coming?

Jurvetson: We’ve invested in a lot of search companies over the years, and a whole suite of new ones like Technorati (which searches blogs) and Grokster (a file-sharing service). It is not as if Google is the last stand in search.

There are a lot of broken things with search. Getting too many results is one of them. We have too much information. We don’t have control or coherency.

Some people are tackling that information glut with visualization tools. (Software that arranges information in graphical form.) The optic nerve is like the broadband pipe to the brain.

Sometimes when you’re looking for information, it’s not "the answer" you need, but it’s "who in my large corporation has the answer to the question I need to ask?" Maybe the answer isn’t on the Web yet. Maybe it’s only in your e-mail system. So companies like Tacit (which can find key words in e-mail and try to match people with similar interests) and others are helping mine that.

Andreessen: If you look at the last 10 years, basically about once a year in the last 10 years there’s been some big new thing, whether it’s instant messaging one year or eBay the next year or Skype the next year or Kazaa or Napster the next year. One thing after another after another. And every time one of these new big things comes out, it changes the nature of how we think about the Internet.

All of a sudden the Internet is different. All of a sudden the Internet is used for voice phone calls in addition to e-mail, in addition to instant messaging. Over the next 10 or 15 or 20 years, what we’re all going to be surprised by is the rate at which those things continue to pop out in a very unpredictable way.