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Exponential IT Trends Driving Cloud Communications

May 01, 2014 by

I recently saw Ray Kurzweil give a speech titled “The Acceleration of Technology in the 21st Century: The Impact on Business, the Economy, and Society.” For those of you who, like me, spend your time thinking mostly in the short-term about this quarter, next quarter, and maybe—on the outside—what is going to happen at the end of next year, it’s refreshing to find someone stepping back and asking questions about what things will be like 25 years from now.

Kurzweil’s central thesis is that certain underlying trends in information technology have remained constant over long periods of time, and that they are likely to continue at the same pace into the future. He describes an analysis he carried out where he looked at the amount of compute power that can be purchased for $1 from 1890 to the present. It turns out that the data follows a very predictable pattern: $1 worth of compute has roughly doubled every year since 1890, creating a reliable and predictable exponential trend across wars, famines, generations of technology, and everything in between. The challenging part for most people is that it is difficult to intuitively understand exponential trends. Humans are wired to have linear, short-term intuition. So when we extrapolate these historical trends and say that in 25 years the compute power found in a typical smartphone today will be the size of a blood cell (100,000X smaller), and that you will be able to purchase a billion times the compute power per dollar as you can today, these predictions almost don’t make sense.

The exponential trend Kurzweil is talking about applies to IT as a whole, but I started thinking about how it specifically applies to enterprise communications, the area of IT that I spend most of my time thinking about. Traditional PBX technology was created during an era when compute resources were a lot more expensive, data network bandwidth was very constrained, and communications services were delivered via a voice centric telco network. In this environment, the economically and functionally viable approach was to put the features close to the end users, deployed on optimized hardware, designed for and connected to the existing telco network.

Today, exponential improvements in data network bandwidth and the emergence of standardized compute platforms have given rise to the cloud-based model for providing PBX and UC services. I believe the exponential IT trends that Kurzweil describes favor shifts from premise-based deployment models to cloud-based ones. The first driver is cost. By centralizing the compute, all the redundancy embodied by disparate and discrete premise-based deployments is eliminated. Ever cheaper compute means that the incremental infrastructure cost of servicing any particular customer in this model continues to go down vs. the fixed costs and overhead that one has when deploying and managing hardware on the customer premises.

The second driver is features. The cloud model allows for a very rapid development and deployment of features that go beyond traditional voice to include video, messaging, and collaboration. The cloud model makes a lot of sense when you want to support the secular shift from fixed location wireline handsets to the roaming mobile device becoming the primary communications endpoint.

Looking to the future is always difficult, but it seems clear to me that the exponential IT trends will drive a proliferation of network-enabled mobile devices of different shapes, sizes, and purposes. Communications will be embedded everywhere—into these devices, into applications, and into services that don’t even exist yet.  This proliferation of embedded communications offers the opportunity to interact very naturally and contextually with other users and customers instead of forcing people to dedicated communications endpoints. In addition to streamlining interactions and business processes, I believe the value of this proliferated, contextual communication will be in collecting and analyzing the large amounts of data that will be produced. Companies will use an analytics-driven approach to this data to gain insight into their customers, employees, processes, and—in general—how they can improve their businesses.

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