Trends in Emerging Information Services

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Trends in Emerging Information ServicesTrends in Emerging Information Services

September 14, 2000September 14, 2000

ToshiharuToshiharu　　 AokiAoki

President & CEOPresident & CEO

NTT DATA CORPORATIONNTT DATA CORPORATION


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OutlineOutline

1. How we should recognize the Internet era

2. How we should recognize the change in services

3. How we should recognize the change in business mechanisms and rules

4. How we should recognize the change in intellectual creation

5. Summary


1. How we should recognize 1. How we should recognize the Internet erathe Internet era


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Perception of development - in a span of 20 yearsPerception of development - in a span of 20 yearsPerception of development - in a span of 20 yearsPerception of development - in a span of 20 years

1990 20001980

1980s 1990s

The Internet eraBefore PC PC era

1981 1983

PC Gold Rush

InternetGold Rush

1994 1996

1981PC Year O

ne

1994Internet Year One

Analog circuits Digital circuits

1982Network digitizati

on start

1997Complete network d

igitization

SPC

Optical fiberloop

27%

Optical fiberloop

36%


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Progress of digitization and creation of new marketsProgress of digitization and creation of new marketsProgress of digitization and creation of new marketsProgress of digitization and creation of new markets

The Internet

Satellite TV

Optical fiber

xDSL

Network

Computer

Information appliances

(TV and PC)

Content

Encouraging rise of new markets


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B to C

Manufacturing

Non-manufacturing

Business climate in 2000 (Forecast)Business climate in 2000 (Forecast)Business climate in 2000 (Forecast)Business climate in 2000 (Forecast)

B to B

0

$ 50

$100

$150

$200

$250

$300

$350

$400

Japan Europe U.S.

130

186

360

10 10 39

(billion)

[Source: Electronic Commerce Promotion Council of Japan (Ecom)]


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The Internet Changes Society and IndustryThe Internet Changes Society and Industry

The Internet frees us from unconscious limitations, and “Consumer-oriented” concept appears

Perfect market

Perfect community

Perfect value

Free fromtime and space limitations

Free fromunified common value

Free frominformation imbalance


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Perfect MarketPerfect Market

With the information imbalance between suppliers and consumers rectified, we move closer to optimal markets– Consumers can get the information they need to make their own comparisons and selections– Suppliers get information about consumers, enabling them to offer better goods and services– Greater freedom is available in the setting of prices (ex. Internet auctions)

Internet

Consumers Suppliers


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Perfect CommunityPerfect Community

Communities are formed that transcend time and space limitations– People can join global communities anytime– People can carry individual private space around with them wherever they go– Transformation takes place from closed communities to active communities that influence society

(ex. development of Linux) Individual activities influence communities and society in real time


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Perfect ValuePerfect Value

Diversity is recognized with regard to people's

sense of value– Mega-trends and niche coexist

• Mega-trends arise easily• Business opportunities arise out of the niche

– Individual differences in people's lifestyles are acknowledged.– Saving time for / Taking time for ・Internet shopping vs. Going to the mall

・Personalized newspapers vs. Traditional newspapers

Mega-Trends

Niche


2.How we should recognize the change2.How we should recognize the change in services in services


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Change in service creation processChange in service creation processChange in service creation processChange in service creation process

Difference in perception of service between consumers and suppliers

Service

New Service

Internet

－－－－－ Browser－－－－－

◆Chart ～…………………………………………………………………

◆Graph ～ ……… ……… ……… ………

News deliverySales of goods on homepages

Building e-mail environmentDeveloping and providing Web browser

Consumer Supplier

Gap

Environment


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Impacts on the marketImpacts on the market

The Internet has caused a significant change in the market

Change in quantity

Change in quality

Change in environment

The 1st phase

The 2nd phase

The 3rd phase

Efficiency

Exploration

Creation

ChangePhase Key Word


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Change in quantity

Change in quality


The 1st phase

The 2nd phase

The 3rd phase

Efficiency

Exploration

Creation



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Change in quantityChange in quantity

New markets generated by the improved efficiency made possible by the network

– Change in communications• E-mail

– Networking of B to B transactions • EDI

– B to B marketplace• From intermediary to info-mediary

(The use of the Internet increases efficiency of intermediary service and distribution)


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Change in quantity

Change in quality


The 1st phase

The 2nd phase

The 3rd phase

Efficiency

Exploration

Creation



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Change in qualityChange in qualityChange in qualityChange in quality

The business emphasis shifts from quantity to quality.

The three perfect states made the formerly untouched area a new market.

Manufacturing cost

Market needs

Fewer consumers General public

New market

Mass production

Order production

Existing market


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Change in quantity

Change in quality


The 1st phase

The 2nd phase

The 3rd phase

Efficiency

Exploration

Creation



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Change in environmentChange in environment

The Internet establishes itself and changes business.

– Business mechanisms were replaced

– Changes in market principle create new businesses

– New businesses taking advantage of the potential of the new environment are expected to emerge


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i-Mode Servicei-Mode Servicei-Mode Servicei-Mode Service

Game

Shopping

Ticketing

Entertainment

News, information

Ticketing, billing

Financial services

Maps

Dictionary

Travel information

Dining, cooking

Distribution of accesses by content category

i-Mode Mobile Phone


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Appearance of new servicesAppearance of new servicesAppearance of new servicesAppearance of new services

The i-mode, which integrates the Internet with a cellular phone, is bringing a great change to our life style.

Internet??

!!

Mobile and portable.Get necessary information on the street(train time table, guide on restaurants, etc.)

i-Mode

Cellular phone functions

123

456

789

*0#

℡ ℡

Rapid and accurate decision making


3. How we should recognize the change in 3. How we should recognize the change in business mechanisms and rulesbusiness mechanisms and rules


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Hype CycleHype CycleHype CycleHype Cycle

Cycle of e-business (business service)

Degree of exp

ectation

InternetWeb

Start of “.com”

The U.S. 1997-1998Initial Public Offering（ IPO）

The U.S. 1998“e-Christmas”

Europe 1999 IPO

Plummeting of .com company stocks

Dwindling interest by inventors

Failure of conventional “stores”

Collapse of .com company stocks

Disclosure of e-business failure

Dwindling interest by companies

Rise of real e-business

Optimization of e-business

Post-Internet business

Disillusionment Awareness activity Stable productionOver-expectation at its peak

Dawn of the technology

[ Source: Gartner]

1990-96 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010


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Business, technology and rulesBusiness, technology and rulesBusiness, technology and rulesBusiness, technology and rules

Waves of e-business rules

1990-96 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Dawn of the technology

Degree of exp

ectation

Disillusionment Awarenessactivity

Stable productionOver-expectation at its peak

Creation of a new framework as a base for real e-business

Technology pull

Provision of a stable baseTechnology revolution on usage

Base=Technology, rules

･ ASP･WebSI・ Security・ RASIS•・ etc….

Establishment of life style in which technology and business, as well as technology and service, converge and are in harmony

“Real” e-business

Rules

Technology

Business

Base=Technology

Market demand push

･ Business model･ International agreement (GBDe 、 WTO)


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Approach to new service creationApproach to new service creationApproach to new service creationApproach to new service creation

Technology alone cannot solve service creation problems.It becomes important to devise business mechanisms and rules if new businesses are to be created.

- From technology-based service proposal to creation of real services

Technology

Business model Rules (legal system, regulations)

• Protocol/procedure• Encryption and authentication• Standard codes and format, etc.• Billing and transaction

• Change in procedure• Change in business practice

･ Information disclosure･ Intellectual property･ Prevention of unauthorized

access･ Protection of privacy


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What rules areWhat rules areWhat rules areWhat rules are

Rules as viewed from market push.

Crime preventionEncouraging people

to do new biz.

Promote and help advancement of the Internet society Market mechanism

Rules


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Market consensus in the consumer-driven eraMarket consensus in the consumer-driven eraMarket consensus in the consumer-driven eraMarket consensus in the consumer-driven era

Generation of new consensus suitable for the network society – Basic consensus– Consensus on value

The network society moves forward as mechanisms are put in place

Internet(bazaar)

Perfect value

Perfect community

Perfect market

$

Consensus


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To build a consensus To build a consensus To build a consensus To build a consensus

System for building a consensus in the network community

RASIS*

Common functions

Business/service

Physical assurance for services on the networke.g.) No system failure

Essential functions in transaction processe.g.) authentication, settlement of payment

Creation of new services

RASIS: Reliability, Availability, Serviceability, Integrity and Security

Standards and

specifications

Unification of data format, transaction rules, etc.e.g.) EDI, XML legal system, rules (GBDe, WTO)

Technology

Rules

Business modelMechanism

MethodologyConsensus on value (Price vs. value of services)

Basic consensus(Mechanism for smooth information sharing and distribution)


4. How we should recognize the change 4. How we should recognize the change in intellectual creationin intellectual creation


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Basic technology and theory

Changes in intellect creationChanges in intellect creationChanges in intellect creationChanges in intellect creation

R&D responding to needs of the new era is required

Exp

ansi

on o

f R

&D

are

a

Era

Hardware technology(Optical, digital and LSI)

Software technology(Applications, architecture)

Business model(E-commerce mechanism)

Base = Technology and rulesBase = Technology


5. Summary5. Summary


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SummarySummarySummarySummary

The development of the Internet has greatly changed the business environment

From supplier-driven to consumer-driven environment

Convergence of technology, service and rules builds new business infrastructure

Consensus suitable for the network era (creation of new values) is essential

Trends in Emerging Information Services

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