The Mobile Wave

How Mobile Intelligence Will Change Everything

By Michael Saylor

In his controversial novel Brave New World, Aldous Huxley wrote: “When the individual
feels, the community reels.”

He was imagining a world order set 500 years in the future. Little did he know that it
would take only 80 years for that particular vision to be realized on the streets of the
Arab world as images of brutality captured on smartphone cameras fomented violence
and revolution.

And, although he sees mobile technology largely as a force for good, Michael Saylor
echoes, at least in part, Huxley’s vision of a world in which collective intelligence acts
as a powerful instrument for social change.

Saylor’s predicts a liberating effect because the instant information that mobile
technology delivers is omnipresent - it’s everywhere and available to everyone. Its
potential travels way beyond the uprisings of the Arab Spring.

Saylor, co-founder, chairman and CEO of enterprise software company MicroStrategy,

Inc., describes the Mobile Wave as the fifth installment of the Information Revolution -
preceded by mainframes, minicomputers, the personal computer and the Internet PC.

The Information Revolution is the third socio-economic upheaval, following the

Agricultural Revolution and the Industrial Revolution and its implications are just as
earth-shattering in terms of wealth generation and employment.

The Mobile Wave, he tells us, is “a surging tidal force bearing down on corporations,
government, universities, non-profits and nearly every facet of society,” which can be
“harnessed to help you grow your brand and build your business.”

Meet the Wave

Mobile computing includes devices that are fundamentally full-fledged computers

that we can easily carry around with us. They are tablets, like the iPad, and the new
generation of cell phones he refers to as app phones which have their own operating
systems; making phone calls with them is merely a secondary function. In the not-too-
distant future, he predicts, they will become the world’s de facto computing platform.

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 The Mobile Wave

In 2009, mobile devices began outselling PCs. The following year saw the launch of the
iPad, which became the fastest-selling consumer product of all time.

The defining feature of all of these devices is their ease of use, relatively low cost, durable
battery technology and their instant-on capability.

And they are intelligent. Thanks to GPS, they know where they are and where they are
heading. They can understand voice commands, they can see via their cameras and they
can interpret what they see, from written language to bar codes.

Then, there are the ubiquitous apps.

Apps are cheaper, and therefore more accessible, than desktop programs. They don’t
have so many bells and whistles but this works in their favor - their functionality is usually
precisely targeted to meet a specific need.

“I think every company that serves consumers will need a great app that offers their core
services on their customers’ mobile phones. If they don’t, their competitors will,” Saylor
declares.

This rapid advance of mobile technology is driving two key changes in the way businesses
use digital products and software as part of their business.

First, many companies will create digital versions of physical products. These digital
versions will also add new features not possible with their physical counterparts – this has
happened in publishing with built-in dictionary look-ups.

Second, companies will extend their business processes onto software that resides on
customers’ mobile devices. Via apps, they will seek to influence and advise customers
more directly and interrupt customer relationships with their competitors. So, for example,
using a mobile device, a customer shopping in one store could scan in a product barcode
and find another retailer offering a better price.

Impact of the Wave

The author identifies seven broad areas of activity that are being or will be transformed by
the Mobile Wave, with far-reaching consequences for society.

First: The written word. Over the course of six millennia, writing has traveled from the era
of clay tablets to the age of silicon tablets.

Until recently, paper has been the dominant storage and information transmission medium.

Paper has a number of drawbacks though. It’s easily lost or destroyed. It’s a fixed format
- think of a printed map, for example - and it was, or is costly, both in financial terms and
in damage to the environment. Not only do pulp mills consume 5,000 square miles of US
forest every year but the paper-making process is also a heavy polluter - the fourth largest

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 The Mobile Wave

producer of greenhouse gases in the US.

The computer era has partly taken care of these negatives and made information much
more robust. Maps, for instance, have become instantly zoomable (and no more folding
challenges!), while the Internet offers easier access to information. Content can be organized
in any way the author or user requires, links can be inserted to reference points and word
definitions can be obtained with a single click.

But even laptops are too bulky and offer too little battery life to deliver true portability,
especially for book reading. It was the development of e-ink and truly mobile devices like the
Kindle that heralded the demise of paper books.

Purchasing digital books is now fast and easy, production costs are negligible and, in the final
analysis, people are no longer required to physically sell them.

“In the end,” Saylor predicts, “nothing will remain but writing, editing, perhaps some design,
and marketing. Pure information.”

Alongside this improvement in accessibility, we are witnessing an explosion of information,

characterized by the creation of online libraries, from the encyclopedic Wikipedia to book
digitizing programs like the Project Gutenberg’s 34,000 free public domain books, and
Google’s partnerships with universities and libraries, which has seen more than 15 million
books scanned.

What’s next? Newspapers face extinction because they can’t match mobile’s instant
delivery of their core product - news. On the other hand, magazines have an opportunity to
exploit mobile computing because of the low cost of market entry, elimination of expensive
production processes and potential for interaction with the reader, from reading articles aloud
to running animations and videos.

This could be, the author suggests, the beginning of a golden age for niche publications.

And one final nail in the paper coffin. Because we can now carry our digital documents
around with us in our mobile devices, we no longer need to print them out.

Entertainment is next to fall under the author’s spotlight. Transformation in this area starts
with the gradual disappearance of the traditional camera, its absorption into mobile devices
and a revolution in the gathering, storage and distribution of photos.

A mind-boggling 2.5 billion photographs are uploaded to Facebook every month and 76 per
cent of mobile owners say they use their devices to take pictures.

We can use them to play anything from traditional board games to complex virtual
adventures, we can gamble in online casinos, and we can watch TV and other video
wherever and whenever we want.

The losers in entertainment are console game makers, DVD producers and mainstream TV
networks. Already 56% of the population of South Korea watches TV regularly on mobile
devices, and YouTube took just six months to build a content library equivalent to the entire
output of the three main US TV networks from 1948 to 2008!

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 The Mobile Wave

Furthermore, the Mobile Wave enables the TV viewing experience to be shared - via Twitter
“tweets” and online critiques both during and after a show. For instance, after show were
posted within 12 hours.

Advertisers have struggled to keep pace with this rapid move away from traditional viewing.
Online banner ads and pop-ups have had limited success but some big brand names have
found a solution by developing their own apps. Nike, for instance, developed a performance
rating app for joggers, while Procter & Gamble’s Charmin bath tissue produced an app for
people to find clean public restrooms.

Next up: Money and Security. Saylor tells us that money, as a physical commodity, is on the
way out. It’s unwieldy, and costly to produce and safeguard. The same goes for ID tokens like
drivers’ licenses.

Soon, he suggests, they will all be incorporated into our cell phones, thanks to the
development of three key technologies: barcodes (and presumably QR - quick response -
codes); radio frequency identification (RFID) - a sort of electronic tagging that transmits its
identity and location; and near field communication (NFC), which enables digital signals from
devices to be read just by waving a device in front of the reader.

Of course, although it will be incredibly convenient to host credit, debit, loyalty and ID cards
on a single device, the process will only work if systems are significantly more secure than
they are today.

No problem, says Saylor. Passwords are passé. Instead, mobile devices will use their sensing
abilities to verify their owner. After all, a touch device should be able to read fingerprints and
for good measure, the built-in camera could check your unique retina and iris forms, while
voice recognition tunes into your vocal patterns.

Most likely, all of these identification technologies would be overlaid on each other, with a
unique PIN number sitting on top.

With security like this in place a whole range of applications, in addition to monetary
transactions, become possible. So, for instance, you could use your mobile for unlocking your
home, a hotel room, or your car. Codes could even be built in to time-limit accessibility - as
with a hotel room for example.

Apart from sheer convenience, what are the implications of the digital wallet? First, says
Saylor, a massive reduction in America’s annual $16 billion credit card fraud bill. In fact,
he suggests, “the potential impact is so great that if card companies gave everyone in the
United States a free mobile device, they would earn back the money through the drop in fraud
alone.”

ATMs will disappear too, and the role of banks will change radically. Yes, they would still
be guardians of our money but traditional tellers and branch banking would no longer be
required.

Furthermore, we are likely to see technology companies like Amazon and Apple moving
into the financial services arena, exploiting their pre-existing direct-billing relationships with

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customers.

Ah, you might be thinking, but what if my mobile device is lost or stolen? Well first, it’s quick
and easy to track, recover, replace or even remotely wipe the missing device. Secondly, the
author contends, “as mobile phones become increasingly inexpensive, people have less
reason to even steal them for their resale value”.

Social networks are the fourth category riding the Mobile Wave. Saylor suggests the near-
elimination of time lags between interactions brought about by networks like Twitter and
Facebook could mark the beginning of a new, worldwide social consciousness.

He compares it to the function of the human brain: “There is a vast network of nerve sensors
that record and report everything that transpires in town squares, city centers, courtrooms,
campuses, and byways across the world. It includes a complex array of synapses that
processes those sensory inputs through postings, comments, ‘likes,’ and ‘shares.’ It involves
a synapse network that is constantly evolving, creating new network connections and new
pathways.”

Thus, social networking has become a sort of global organism, a collective intelligence
fulfilling multiple roles such as connecting businesses directly with individual customers,
coordinating societal activities, and informally polling and aggregating the opinions of masses
of people about everything from political issues to the performance of medical professionals.

Apps are available to gather and distribute a wide variety of information. For example, an app
called Trapster enables drivers with mobile phones to input details of speed traps, traffic light
cameras, hidden police cars and other hazards. These are coordinated and made available to
all users.

Social networks could even play a role in authenticating an individual’s identity. It is extremely
hard to create a fake persona on Facebook, complete with photos, biography and timelines
that would stand up to scrutiny, Saylor suggests. So, in effect, a Facebook identity could be
used to prove you are who you say you are.

Medicine and Healthcare comprise the fifth Mobile Wave category. Right now, it is one of the
last strongholds of paper record-keeping and is ripe to reap the benefits of instant access and
the rapid exchange of information.

Mobile devices can be used by doctors to record interviews and photograph injuries or
conditions. Patients can use their mobiles to check their own records, fill prescriptions,
generate medication reminders and, in Saylor’s future world, consult doctors around the
globe and even get them bidding on the cost of performing surgery.

Mobile technology will reduce stays in hospital because patients can be effectively monitored
at home.

It will also become an invaluable aid to the visually and hearing impaired. For example
mobile-based video could allow deaf people to communicate with sign language. GPS
navigation systems and built-in digital compasses could enable a mobile device to issue
spoken or Braille locational information such as “Robinson’s hardware is twenty feet in front

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of you” or “The picnic table is on your left.”

In the field of Education the author sees great potential for mobile technology to revolutionize
service delivery - for example allowing teaching to penetrate even the remotest corners of
the developing world cheaply and easily (more on this later) or bringing Nobel laureates into
American classrooms by video.

“The tablet computer embodies education and all its involvements,” he says. “It’s the best
didactic technology ever invented. It can give you every textbook… It can send you a test,
let you take it, grade it and return it at once, then certify the results. It can provide video
resources, including lectures, and help you do group projects across the globe.”

Textbooks will eventually become free, he believes. Indeed there is already a pilot project
in which a nonprofit organization provides “flexbooks,” which are free, customizable and
updateable texts.

Tablets have the potential to make education fun and more effective. They promote interactive
learning, provide access to virtual worlds and might even one day be used for “augmented
reality” enabling students to gain more information, about a particular building for example,
simply by waving the device in front of it.

And just imagine, says the author, a former president or business leader video-recording
hours of answers to scores of questions, answers that can then be plucked individually to
create the effect of a virtual one-to-one conversation with a student.

Finally, the area that stands to gain the most from the Mobile Wave is the developing world.

It’s remarkable to think that 90% of the world’s population now has potential access to mobile
networks. As Saylor points out, that’s more than the proportion that has access to good
drinking water. Two thirds of the world’s 4.6 billion mobile phone owners live in emerging
nations.

The reasons are easy to spot: The infrastructure set-up cost is tiny compared with the bill for
laying physical cables and pipes. Mobile devices also draw only a fraction of the power that
desktop computers consume, and batteries sustain them during all-too-frequent power cuts in
the developing world.

And the technology is already there. Developing nations achieve what is called “latecomers’
advantage” - they don’t have to invent or refine the technology. It’s there on the shelf for them,
complete with a low price tag.

The benefits are enormous. Mobile communications increase market efficiency through
the transmission of data that previously might have required a day’s travel to collect – for
example, the going rate for vegetables and fish at different markets. Money transfer for
previously unbanked populations becomes feasible. Remote medical diagnosis and treatment
can transform the health of communities, while remotely-transmitted education raises their
knowledge and skills.

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Crucially, the Mobile Wave is washing away layers of corruption by eliminating middle-men
who previously controlled access to information or resources.

In Kenya for example, mobile banking enables firms to deposit salaries directly into
employee bank accounts, excluding supervisors and bosses who previously withheld pay
packets until bribes were paid.

In India, online access to Government services and forms short-circuits the obstruction of
gatekeeper officials who, in the past, demanded payment for access.

The Wave Revolution

The three economic revolutions - Agriculture, Industrial and Information - each created huge
economies of scale but also displaced vast numbers of people - or, as Saylor sees it, freed
them to do other things.

With agriculture it was the division of labor, domestication of plants and animals and
introduction of simple farming technology that freed up human time and effort to devote to
other activities and, ultimately, the development of cities.

With the Industrial Revolution, it was first steam and then electricity and their application to
machinery that led to an exponential increase in output. The Information Revolution, he tells
us, is founded on an exponential surge of Information Energy - “the fuel that drives people -
and machines - to make a decision and take a course of action.”

This energy, measured by volume of collected information, has been growing at an annual
compound rate of 40% in recent years and mobile computing puts it in the hands of almost
everyone.

At the same time though, the technology will eliminate thousands, possibly millions, of jobs
in the service sector - librarians, clerks, bankers, teachers, professionals and bureaucrats:
all those whose primary job function is to serve up information and take action on it. They
will be replaced by software applications, social media, and our direct ability to take action
ourselves.

Where does that lead us?

“The answer is the same as it has been through all previous economic revolutions,” the
author tells us. “This surplus human energy will ultimately be reapplied to higher-level
economic activities, many of which haven’t yet been discovered.”

And if you doubt him, he points to research by management consultants McKinsey which
suggests the Internet has created 2.6 jobs for every one that it eliminated, and that the data
explosion has created a need for 1.5 million new information managers.

But these, and other roles yet to be identified, will demand a much higher order of skill,
requiring a greater level of education.

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And what of privacy and confidentiality issues? Saylor acknowledges that we need to re-
examine the principles of privacy against the background of the Information Revolution.
Perhaps we should be able to trademark or copyright ourselves; maybe we need to treat
software networks in the same regulated way we deal with utility companies, and we need to
keep a wary eye on companies that have monopolistic power over life’s essentials.

But in the Information Revolution, what are those essentials?

“If Facebook cut you off, your life would be thrown into turmoil,” he declares.

Maybe not for everybody, but you most likely you know someone who this applies to.

Conclusion

Michael Saylor’s perspective on the fifth wave (mobile technology) of the third economic
revolution (the Information Revolution) is almost euphorically optimistic and, no doubt, there
will be detractors who view it differently.

But, like its tidal equivalent, the Mobile Wave is an unstoppable force. And it’s moving
at blinding speed. It’s already revolutionizing the way we distribute written information,
entertain ourselves, transact business and protect our identity. It has transformed the way we
communicate and interact with each other in ways we couldn’t have imagined 10 years ago
and it promises to significantly improve healthcare and education.

In the developing world, its pervasive presence promises to facilitate a great leap forward in
education, health and prosperity.

He is convinced that the best is yet to come - for those who see the opportunities and seize
them.

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