In an “Entrepreneurial Thought Leader” lecture given at Stanford University earlier this year, Tom Siebel argues that all of the great technological advances and development of great companies are behind us – and the growth rate for the tech sector is just on par with the rate of current economic growth.

The previous sentence introduces a segment of the February 2009 Stanford lecture, see here for the event’s full video.

It’s not the first time some killjoy predicts the end of tech fun: in 1899, a Charles H. Duell, none less than the Commissioner of the US Patent and Trademark Office, the USPTO reportedly said: “Everything that can be invented has been invented”.
There is a distinct possibility the infamous quote is nothing but an urban legend but, time and again, some sage comes to a forum and tells us the great times are behind us, the tech industry has now entered a grey era of incrementalism.
I’ve personally heard it a few times. In the early 1970s, at Hewlett-Packard where Bill Hewlett told such skeptics where to file their predictions away. In 1985, when I moved to Silicon Valley to take over Apple’s Product Development. I was told Silicon Valley was doomed, it was becoming a ghost town as unheard of layoffs were taking place. In the early 90’s, when the first Gulf War and a bad economy emptied shopping centers and restaurants.
Soon thereafter, the Internet came out of the research lab closet, the browser was invented and yet another wave of innovation came about.
As for Tom Siebel, his background makes the gloomy prediction more puzzling: he’s not part of the kommentariat, he is an industry mensch, the inventor of CRM, rising to the industry’s firmament and later selling Siebel Systems to Oracle for $5.8 billion. Perhaps he was merely trying to arouse his audience and start a reaction.

Still, is he right? Have we entered an era where all of the great technological advances and development of great companies are behind us – and where the growth rate for the tech sector is just on par with the rate of current economic growth?

Absolutely not.

Take bandwidth. Fiber or air, landlines or wireless. Getting 100 megabits per second with FTH (Fiber To the Home) will change the way we communicate, entertain, work, manage energy, provide healthcare, education or just physical security. If this sounds a little broad, take Skype Video today, using DSL. Now, think of the image quality and conferencing features we’ll get with our dispersed families or coworkers. Today, Cisco sells high-end telepresence systems for enterprise customers, tomorrow, just as we went from mainframes to personal computers, we’ll have personal telepresence. No real insight here, just history repeating itself. Speaking of which, the incumbents will keep being dislodged by interlopers: AT&T, when it still was Ma Bell, predicted the advent of the home videophone, but didn’t get to deliver it, leaving it to Skype, iChat and many others riding the Internet.

Moving to wireless, a widely quoted statistic says there are about 4 billion cell phone subscriptions. How many of these will benefit from the faster “4G” networks being deployed? In the near future, a small minority in the more sophisticated, richer markets. Longer term, cell phones will mutate into smartphones or, more accurately, really personal computers, or pocket computers, as Apple begins to call its smartphones. These new computers will have more “organs”, that is sensors and communication channels, than our PCs. Going back to the Skype example, we’ll have pocket videophones RSN (Real Soon Now). Next year?
These new devices will have a similarly profound impact on the activities (work, entertainment, healthcare…) mentioned above. Profound impact seen in substantial new economic activity.
Here, too, incumbents are and will be dislodged. When it comes to the new pocket computers, Microsoft no longer dominates. RIM, Google with Android, Nokia, Apple, of course, are driving progress; Microsoft follows.

Then, we have the “New Microsoft”, an admittedly lazy and unfair way of characterizing Google, save for its size, for its impact. Google, for all the fear it will put newspapers or book publishers out of business isn’t a convicted monopolist. But tower they do and their size could lead them to do very bad or very good things. Take Cloud Computing, a still evolving concept as intermediate implementations debug our thoughts. And couple it with what some call the Web of Objects. Here, the assumption is everyday objects will “steal” smartphone technology, acquire sensors and wired or wireless communication capabilities. Now, “visualize” (we’re in California) a future of everyday objects always connected together, hence the web word, and to the Internet, hence the capital W. (Even if wireless communication chips are bound to become commodities, I would not sell my Broadcom or Marvell stock, the volume and diversity will more than compensate for the downwards price pressure. This is a figure of speech: I don’t own any of these stocks, I don’t play the stock market.)
Even more seriously: the Web of Objects will be a major source of Cloud Computing applications such as managing these objects, cars, heating and security systems, mobile medical devices, power distribution networks. Or, forgive the lopsided metaphor, mining the sea of data generated by these sensing and communicated objects. This will have a major impact on the environment, and the economy, making it easier to monitor how we distribute and spend energy.

Other than seeing very positive development in harnessing together computing and genomics, I’ll stay away from biotech, regrettably not my area of experience. In another life, perhaps. Google, as I did, “the future of biotech” and you’ll see plenty of reasons to be confident biotech isn’t about to enter a “grey ear” either.

In 1986, I added one chapter to the US translation of my book, The Third Apple. In it I dreamed of sitting under a tree and, with a portable computer, enjoying access to what I called “Ten Thousand Libraries of Alexandria”. This was a wild underestimation of what technology and culture would bring about. I trust I’m still being a little timid, derivative, unable to see beyond evolutions of what we know and do today.

And, as a venture investor, I look forward to the disruptions. — jlg@mondaynote.com

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