Beware of obsolescence publisher warns telcos

No area of technological change is as dramatic as what's happening in bandwidth, says IDG chairman Pat McGovern, head of the worldwide publishing empire that produces Computerworld and PC World among its multitude of titles.

No area of technological change is as dramatic as what’s happening in bandwidth, says IDG chairman Pat McGovern, head of the worldwide publishing empire that produces Computerworld and PC World among its multitude of titles.

“Data communication is growing at 300% a year while voice grows at only 5%,” says McGovern, in New Zealand last week for a whirlwind visit.

Within three years McGovern expects the transmission of data to overtake voice traffic and by 2005 voice should make up only 15% of total traffic. The ramifications for the telecommunication industry are immense.

“With wave-division multi-plexing techniques, all the voice now being transmitted in the United States could be carried on one cable.” This could lead to a major obsolescence problem for companies that own existing voice network infrastructures.

“New companies can come in primarily to do digital networks and put in enough capacity to offer voice as a minor application as well as data.” McGovern expects to see many telecomms companies around the world become obsolete as a result.

“This $US700 billion voice telephony market is going to be quickly displaced. Some of the biggest successes will be these companies laying all this fibre and the biggest losses will be among telcos whose cultural background doesn’t allow them to adjust quickly enough.”

The publishing industry’s survival in the electronic age is, obviously, something McGovern has thought a lot about.

“We used to think the Web would replace books but we found that not to be the case.” McGovern says. Research by IDG suggests that time spent reading publications does not decrease as time spent using the Web increases. The Web seems to compliment magazines or newspapers rather than replace them. McGovern says it’s a lesson he, and IDG, had to learn the hard way.

“Several years ago IDG invested $US60 million in Web sites and advertising because we knew it would be a big thing.” At the same time, IDG also spent $US2 million starting the Dummies book line.

“Now the Dummies books are worth more than $US150 million each year and we’re still trying to recoup our investment from the Web,” says McGovern with a laugh. Books are simply too easy to use ever to be fully replaced by the PC, he says.

And users will always need information about technology, he says. He cites an Apple Computer anecdote as evidence. “We’d written about the Apple IIe, and Steve Jobs called me up to come see his latest offering, which turned out to be the Macintosh. Steve told me he wouldn’t show me how to use it, he just let me loose.” McGovern says after using the mouse for a couple of minutes he became quite worried. “I said, ‘Steve, this is terrible. It’s so easy no one will need my magazines to use it properly.’ Fortunately, support issues, vendors and the channel were complex enough that we carried on.”

These days, McGovern believes Apple may have taken a wrong turn.

“Steve is very much interested in bringing IT to the masses. The iMac is designed to do just that, but at the Macworld expo (in New York recently) we had 50,000 visitors come through and not one wore a suit. They were all artists or designers and that could be where Apple should be aimed.”

If McGovern were running Apple he would have licensed the OS to clone makers and let them loose on the education and consumer sectors while focusing Apple itself on the high-end graphics market.

“That way Apple would still have the numbers to ensure developers produced applications for Apple without having the drain of the low-return markets.”

McGovern also talked about the shortage of IT labour worldwide, and came up with a few suggestions on how New Zealand can benefit from it.

“In the info-economy the fundamental asset is the human being. Companies used to get into mergers and acquisitions for the technology another company owned, but these days it’s for the people.” He believes New Zealand is currently in a difficult position.

“New Zealand has its young IT specialists leaving the country. A strong education base is needed to provide more trained people.” McGovern believes that by combining education with government incentives to bring IT houses to New Zealand, the problem could be turned around. Developers would come to New Zealand for the talent rather than luring IT specialists away with offers of higher-paying jobs. Once the cycle was reversed, he believes New Zealand as a whole would benefit greatly.

McGovern was visiting New Zealand on his way to IDG Australia’s 20th anniversary celebrations.

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