Ron Powell with Michael Saylor: The Impact of the Mobile Wave

The Impact of the Mobile Wave: A Spotlight Q&A with Michael Saylor of MicroStrategy

This BeyeNETWORK Spotlight features Ron Powell's interview with Michael Saylor, Chairman of the Board, President and CEO of MicroStrategy, and author of the recently released book, The Mobile Wave. Ron and Michael discuss the changes we will experience – and benefit from – as the mobile wave advances throughout the world.

Michael, congratulations on your new book The Mobile Wave. Why did you feel it was time to write this book?

Michael Saylor: Ron, I think every ten years or so there's something really exciting in the information technology business. We’ve had the mainframe wave, the mini-computer wave, the personal computer (PC) wave, and then the Internet wave. I thought about writing a book around the Internet wave, but I was busy taking my company public and I didn't really have the time.

Now, along comes the mobile wave. It’s the fifth wave, I think, of computing. I feel this is my chance to actually put down in book form my thoughts about the history of science and how things all relate to this current mobile wave, and I may not get another chance in my lifetime. It's my first book, and I'm excited about it.

For readers of The Mobile Wave, what is the most surprising thing they will learn?

Michael Saylor: Well, I think the most surprising thing is that half of the products and services that we've taken for granted – the electromechanical devices we hold in our hand, the things that we read, the way that we learn, the way we buy things, and solve things, and pay for things – half of them are dematerializing into software that's going to run either on a smartphone in your pocket or on a tablet computer that you hold in your hand. This is the greatest wave of automation in the history of the world, and it's the greatest wave of automation in the history of information technology. It's going to be ten times bigger than the Internet wave that came before it. By the time the mobile wave sweeps through all of our lives, half the things that we take for granted in our life are simply going to disappear. I think that is going to be the epiphany.

Wow, that is quite a bold prediction. In your book, you talk about the fact that this really isn’t confined to a specific age group.

Michael Saylor: I don’t think it is. One of the interesting anecdotes I mention early in the book is that I was walking down the beach in San Tropez, and I saw a three-year-old in a stroller in the middle of the noonday sun. One of the girls walking with me leaned over and asked the child what he was doing. The three-year-old said, “I'm working on my music.” He was holding an iPad in his hand and was actually composing a song. That was an epiphany for me. It was a shocker because in the last computing revolution, the Internet wave, we worked primarily on laptops and desktops using symbolic processing. You had to be able to read and understand higher-level math. It's very sophisticated. To see that three-year-old using a computing device was, I think, an extraordinary shift. I think it has very portentous implications for what is to come in the way software interacts with civilization.

You also talk about the older generation and the value the mobile wave has for them. Could you provide some insight into that?

Michael Saylor: With the tablet computer, we've reached an inversion point where now it's easier to read with the computer than without the computer. For thousands of years, everything we read was on paper. But if you're 80 years old and your eyesight's not quite as good as it used to be, that very, very small type in the Wall Street Journal becomes daunting for you. In The Mobile Wave, I point out something that has completely changed the life of a 93-year-old woman. Now she can read the paper again because she can make the font 36 point or 48 point.

Today, we have a fascinating situation where not only can you read on a computer, but also you can read better on a computer. Ten years ago, people ages 20 to 45 might have read text on a computer, but they had to have decent eyesight and they had to be white-collar workers. Today, even if you're too young to know how to read, you can pick up a tablet. It will talk to you, and an article will read itself. And if you're age 85 and you can't read the print, you can either listen to it or you can expand the print size.

This is a wonderful circumstance because computing devices are actually bringing literature to people who otherwise wouldn't be able to access it.

Also in the book, you talk a lot about how we handle money today. How do you see that changing as a result of the mobile wave?

Michael Saylor: One thing I talk about in The Mobile Wave is what happens when money becomes software. In a world where five billion people have mobile phones in their pockets that can hold software that actually has monetary value, then money is software. If money is software, then it's no longer subject to the constraints of electromechanical devices. It's not a piece of paper. I can take my phone, flick it and give 20 lunch vouchers to a Boy Scout troop that's having a field trip. I can set the lunch vouchers so that they're good for two hours. I can set it up so they can’t buy alcohol with the vouchers, and I can set it up so that if they spend less than $20/per person that I sent, the excess money comes back to me. As you can see, digital money has characteristics that are almost magical. If I take that same idea to a software credit card, it's something that would allow me to give credit lines to my children, and I could give my daughter a credit line that only works on a college campus and one to my son that lets him spend up to $500 a month. I could have a credit line I share with my wife where she can approve my purchases or I can approve hers, or where we’re both jointly aware whenever one of us spends more than $100.

You can see that a software credit card has very magical and powerful capabilities. You’d never want to go back to a plastic card where you don't know what's happening with it, that someone could steal it, and that only sends a statement to you once a month. Why not have a software credit card that can’t be stolen, that allows you to know the status at any time and with which you can, for example, administer 100 credit lines simultaneously from the palm of your hand, 24 hours a day.

That is truly extraordinary. Can you give us some examples of how mobile computing will impact industries such as medicine or education?

Michael Saylor: Well, what's fascinating is that education and medicine are both services that are very human intensive. They require lots of labor. Sometimes they require labor that has to be co-located on the site. For example in medicine in the old economy, x-rays were on film and had to be stored. We all remember doctor and dentist offices with walls of filing cabinets filled with x-rays. And if an x-ray is a physical film that has to be stored locally, it has to be read locally. Radiologists that have to be physically present in a hospital so that they can read x-rays immediately because there’s a life-threatening situation for the patient. That could mean, for example, that a radiologist could work less than an hour a day reading x-rays because there were no other x-rays in that 8 hours to be read. The x-ray couldn’t be shipped a thousand miles away because there may be only five minutes to make a decision about how to save someone's life when there's internal bleeding. Hence, you have tens of thousands of doctors who are tied down to some hospital to perform this life critical task, but they're underutilized. With the mobile wave in a world where you have tablet computers and fast networks, you can actually take an x-ray, convert it to a digital file and zap it to someone a thousand miles away who may be a much better reader of x-rays and who may provide a better diagnosis. In fact, you could even zap it a thousand miles to three different doctors, get three opinions and have them back within 90 seconds. The result is a better service with more redundancy in a comprehensive way, and it doesn’t require a doctor to be on site. If you happen to be a thousand miles from the nearest doctor, this might save your life. There's a quality implication too. If you're the world's best x-ray reader or the world's best cardiologist, you might very well be able to give an opinion 10 times as often or maybe even 100 times as often as you can now. In medicine, the most important thing is get the right diagnosis, the right prognosis, and the right treatment as opposed to the convenient one. The mobile wave is going to provide better service for everybody involved and result in more efficient and better healthcare.

In the world of education, there are many fascinating dynamics. Education probably will be improved even faster and better than medicine. If you think about it, if I give a tablet computer to a six-year-old, I also give him a ten million volume library for free. That's what I call the Napster effect. Napster caused mp3 players to proliferate because people realized that with mp3 players they could have infinite music supply for free. Napster was kind of illegal, but there's nothing illegal about grabbing ten million old books for free. They're public domain because copyright expires after 70 years. Additionally, no one can really put a copyright on geometry, calculus, or American history so the things that educate people from kindergarten up to undergraduate education are generally in the public domain. They could be available for free to anybody to read on a digital reader. The iPad puts that at our fingertips.

There is another very fascinating thing about education. I come from a middle class family, and I had an American education, which I thought was pretty good. I would think it's in the top 10% of people on the planet, but I had no opportunity to learn a foreign language until I was 14 years old. Then I could take up to six semesters of either Latin, Spanish, or French. That was the only foreign language opportunity available to me. I could get one of those languages at the same rate as the other 30 people in my class. I couldn't start sooner, and I couldn’t go faster than the rest of the class. In today's dollars, that would cost two or three thousand dollars per year, which means my three years of Latin education cost society about $10,000 – and it was just a mediocre Latin education. With an iPad in your hand at age six, there's no reason you wouldn't be able to get a decent education in any of 100 languages at whatever speed you want. The ability to deliver sophisticated education to people when they want it, at a variable cost near zero, and at the speed they want is an extraordinary opportunity for the education establishment. I think unleashing that kind of courseware to five billion people is going to have an extraordinary impact on the educational level of our civilization and also decrease the cost to create sophisticated professionals, and we all know there's an insatiable demand for educated, sophisticated professionals that can actually make our lives better.

Michael, your book also talks about how the mobile wave affects social networks. We've heard a lot about Facebook, and one of the problems with Facebook is their mobile vision right now. Do you think social networks can provide information that will be useful through enterprises throughout the world?

Michael Saylor: Yes, I really do. Social networks are still in their early stages. I think three years ago almost no one recognized them as having any commercial impact. I think we're in year one of modern enterprises really thinking about social networks in a serious way, but over the next ten years I think we're going to see a renaissance in consumer marketing and consumer services that will result in new types of services that will be highly beneficial and they'll be fueled, in part, by social networks. Facebook is now credited with a unique index of one billion people. Presumably, that will become a two to five billion person index over the next decade. It is the only white pages, if you will, in cyberspace of these knowledge workers anywhere on earth. No government and no company can give you a billion person index.

Here’s an example of how this will work. If I create a software check for $50, type it into my phone, indicate I want to send it to my sister, and link the social network to my payment network to my mobile network, in five seconds I could be guaranteed that $50 finds my sister and will not get lost. It will not go awry. Even if she changes her email, her phone, her physical location, or even her name, the money will still find her. If I can address money, I can also address a postal package. I could send you tickets to Broadway shows. I could flick you my car keys, or my house keys, or I could flick you a voucher that would get you $50 off a restaurant meal.

In short, these social networks will be the rails that provide some sort of structure to objects of value that move through cyberspace. Before the social network, the best way to do it was with an email address. But if you mistype the email address, it'll go off into cyberspace. It could end up in the pockets of any of six billion people, and you can't get it back. I think Facebook creates a crucible or a very safe sandbox environment for us to share things and communicate with our friends and our family, and that's a valuable thing.

The second valuable thing that social networks bring is the largest database of individual affinity, inclination, and aspiration in the history of the world. For example, as soon as a woman gets engaged, one of the first things she does is use her favorite social network to tell her friends. So if I’m Tiffany & Co. and I can tap into the ten million consumers who are active in social networks  – with permission, of course – then I will know the 37,000 people who just got engaged, and I'll know it in an effortless, friction-free way. I can tailor my offerings to them in a way they like. I'll know that they want to go on vacation. I'll know the music they like, the places they like to visit and the things they don't like. I can offer them only the things they're going to like, again, with their permission. In essence, the social network is a single consumer database for permission-based marketing and services that make consumers’ lives better. Companies can create software that provides services that consumers desire, and the consumers are actually going to reward them with a linkage to their social network. The result will be products and services that are just plain better, more efficient and what everybody wants.

We've been talking a lot about the mobile wave and all the great things that are going to happen. What do you see as some of the drawbacks of the mobile wave?

Michael Saylor: The great power of the mobile wave is that software is with us all the time. I think there's a certain anxiety that can be introduced. For example, at two in the morning, I could be watching news in Tokyo, see my stocks had traded down, and then be unable to sleep. People now have the power to cause themselves anxiety because they can track these things 24 hours a day. We are moving to a more up-tempo world where more information flows more rapidly, and people are probably going to be seduced by that. At the same time, that seduction may result in them not having the same quiet pockets of serenity that they had before.

There are a lot of other insights in the book, and I found it absolutely fascinating. Michael, one last question. How soon do you see all of these predictions that you've made within The Mobile Wave coming to fruition?

Michael Saylor: We use the phrase five plus five and ten. I believe we'll see five billion smartphones within five years. That's not the most stretch prediction because people – we're saying 500 million plus smartphones manufactured every year right now so even with zero growth in that business, you'll be up to three and a half billion or so. But I expect with moderate growth, it's reasonable to expect that five billion people will be walking around with smartphones in their pockets. And then, I suspect, and this is the more aggressive forecast, you'll see five billion tablet computers in the hands of people within ten years. Right now there are only 60 or 70 million iPads out there. But the iPad is expanding at the rate that we can manufacture it. There is no inventory – it’s capacity and component bound. I think we have reached an inflection point where it's now cheaper to read – and learn to read – and take in information on a tablet computer than on paper. And because we have flipped, it means that this is just a downhill roll at this point. Societies, governments, corporations, individuals are all going to realize that it's in their best interest to buy these things, or push them, or mandate the adoption of them because there are so many economic efficiencies and other types of societal benefits from the spread of this technology. So to answer your question, we look out ten years to more than five billion smartphones and five billion people with tablet computers. At that point, the mobile wave will have washed over the planet.

That's a great prediction. Michael, it's been a pleasure talking with you about The Mobile Wave and how it will change our lives.

Recent articles by Ron Powell

• Accelerating “Big Data” Analytics: A Spotlight Q&A with Roger Gaskell of Kognitio
• Making Hadoop Part of the Enterprise Data Ecosystem: A Spotlight Q&A with Alex Gorelik of Informatica
• Revolutionary Approach to Big Data: A Spotlight Q&A with Gary Nakamura of Terracotta
• NewSQL Provides Power, Scalability and Performance: A Spotlight Q&A with Mark Sarbiewski of Clustrix

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Tip of the Hat to Garrett Thurston at LinkedIn.