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Edit Note : This is the second of a two-part series on this event. The first post can be read here.

Last week’s IEEE Technology Time Machine Symposium brought together leading academics, engineers, executives, and government officials from around the world, to engage in presentations and dialogue regarding the evolution of technology over the next decade. In yesterday’s post, I reviewed some of the insights regarding devices and technologies. Today, we’ll address networks and larger-scale systems such as smart grids.

Networks

Wireless continues to get better, with more bandwidth in more places. LTE offers a several-fold improvement over HSPA or HSPA+ in data rates as well as a ten-fold reduction in latency. However, operator executives such as Telstra CTO Dr. Hugh Bradlow and NTT Docomo VP Dr. Minoru Etoh pointed out that peak bandwidth is what customers tend to focus on, but total network capacity is the main challenge in providing an excellent customer experience: it’s nice to own a Lamborghini, but won’t get your there any faster at rush hour.

A single user may easily be able to get an HD video stream wirelessly over LTE, but Telstra studies have shown that only a few dozen end-users of a base station can do that simultaneously: due to LTE sector throughput limitations under good conditions. Moreover, this is not some temporary technology glitch or fault of underinvestment, but a challenging limit due to usable frequencies based on radio signal propagation characteristics and information theory.

This insight calls into question the approach being proposed where millions or billions of very “dumb” thin-client devices are wirelessly linked to entertainment and intelligence in the cloud. For devices, networks, and the cloud to function effectively at scale, smart trade-offs will need to be made in real time between when to render computationally challenging scenes in the cloud and send the scene over the network, and when to send raw information over the network for local rendering. Operators will also have to figure out how to manage priorities across users. Consequently, Bradlow sees intelligent traffic management as the key challenge of emerging wireless networks.

On the other hand, putting more cells with a smaller coverage radius could work, such as femtocells or even using Wi-Fi, but this means more wired networks to backhaul the traffic, reducing some of the ease-of-deployment benefits of wireless networks. Prof. Hequan Wu, former vice-chairman of the Chinese Academy of Engineering, pointed out that China Unicom’s mobile data traffic had recently grown 62 percent. In a single quarter. China Mobile’s grew 10 times its previous rate — in a single year. Mobile video is the challenge to solve, everything else is just rounding error.

For the Shanghai World Expo 2010, 10,000 mobile video cameras were installed on trucks and buses for security purposes. Consider the future hurdle of every passenger car sending or receiving several mobile video streams, as each passenger streams an on-demand movie or participates in a video conference. Moreover, Wu said that in some large Chinese cities, densities were up to 140,000 users per square kilometer.

HP’s Dr. Peter Hartwell dove into sensor networks, pointing out that the Internet of Things becomes really useful when dynamic data is used for real-time decision-making. A broad variety of sensors (temperature, humidity, power use) will all be integrated with processing and wireless connectivity into a single chip, enabling new applications, ranging from eHealth to smart grids. Hartwell pointed out that, as with cell phones, size will shrink and features will multiply. A variety of technologies are being incorporated here, such as “energy harvesting” to scavenge power from the environment, e.g., from vibration.

Putting it all together.

While the status and trends of many point technologies was addressed in depth, the consistent theme running through the conference might be said to be a more intelligent world, based on more information from more devices being used in real time to optimize the human experience while enhancing efficiency and environmental sustainability. Nokia Services EVP Dr. Tero Ojanpera stated that anonymized, real-time data from mobile devices is the “ultimate collective intelligence,” enabling everything from optical vehicular traffic routing to locating a popular restaurant to creation of accurate maps. George Arnold, national coordinator for smart grid interoperability at NIST, observed that smart grid efforts will turn the traditional approach of building capacity to meet demand on its head, focusing instead on shaping demand to fit within capacity. Light bulbs with embedded Wi-Fi chips will be able to not only report that they are on, but reduce their output when the power infrastructure is stressed. And, the smart grid approach — which Arnold observed is the use of IT and communications technologies for utilities — isn’t limited to just electricity, but is also being applied to other utilities such as water and natural gas.

Telecom Italia’s Roberto Saracco described the potential of a “mirror world,” a virtual world that is not just a play world in another galaxy or for social networking, but an exact virtual duplicate of the real-world populated with data from a variety of sensors. Such an environment might mean that by the time this conference is held in 2020, everyone will have the opportunity for face-to-face interaction—without having to physically travel to Hong Kong, or wherever, and the ability to shake hands—remotely, via haptic interfaces.

A hopeful, positive attitude was pervasive at the event, with NEC’s President Dr. Nobuhiro Endo outlining a strategy and future which is “friendlier to people, and friendlier to the planet.” Pervasive information and insight, emerging technologies, crowd-sourced intelligence, cloud-based global optimization, greener approaches, reduced power, and ease of use through natural interfaces may yet help solve some of the problems facing the world today.

Joe Weinman leads Communications, Media, and Entertainment Industry Solutions for Hewlett-Packard. The views expressed herein are his own.

Related content from GigaOM Pro (subscription req’d):

• Mobile 2011: Data Consumption Will Explode
• Networking the Smart Grid
• Mobile Operators’ Strategies for Connected Devices

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Over the past few days, there has been a heated debate about Quora, a year-old startup, that offers a more sophisticated version of Yahoo Answers’ question-and-answer platform. Quora has found success with early adopters because of its high-fidelity content, but it has also grappling with the arrival of the masses, which are going to drown out those signals with noise. This dichotomy is one of the toughest challenges for not only Quora, but for any other Internet service with dreams of mega-success.

Let’s face it: Today, success on the consumer Internet essentially equates with scale. Unless you have scale — which is nothing more than a nerdy euphemism for massive mainstream adoption — you don’t have much of a chance of becoming a major Internet company.

Our systems of monetization on the Internet all hark back to old media — television and print. The concept of audiences and cost-per-thousand impressions are the terminology used by media companies of yore. The other monetization models involve subscriptions, where people pay for a service or information, and what is known as e-commerce, where you buy goods such as books, clothes and shoes.

You need to be Internet scale to fit the current monetization models — advertising and subscriptions — and make meaningful revenues worthy of a large company.

So, What Works on the Internet?

In order to answer that question, I turned on the time machine of my mind and started thinking about successful (and not so successful) Internet companies, many of which have vanished under petabytes of history. If you look hard enough, it becomes clear that many successful consumer Internet services have three things in common that allows them to scale, get investor attention and, more importantly, bring in the much-needed revenues (and eventually profits).

Those things are:

1. They have a clear purpose.
2. They are simple to use.
3. They are fun to use or facilitate some type of entertainment or both

Now I don’t mean to suggest that you must have all three to be successful — but if you do, your chances of finding fame and fortune are much higher. Google, for instance had a clear sense of purpose (search/looking for information) and was simple enough to use (a search box on a white page, you don’t get simpler than that). As a result, it was able to become a 0 billion (in market capitalization) behemoth. Some might argue that finding the results one was looking for was “fun,” but I think that’s a bit of a stretch.

On that note, I don’t want to underscore the fact that these three elements aren’t the only reasons services become a hit. They have to be the right products at the right times. There is the undeniable element of luck, but the services also have to have that mysterious “it” factor, that something which makes millions of people go clicking.

Pop the Popcorn and Turn on Netflix

Now let’s look at a service that combines all three aspects: Netflix, which has seen its market capitalization go up 10 times over past 36 months.

1. It has a clear sense of purpose: Watch movies and television shows.
2. It is dead simple. You don’t need a manual to get started and start ordering DVDs or watching videos online. (Some might want a better Netflix experience. Well, I want to be 15 pounds lighter.)
3. It is all about “fun” or “entertainment.”

And since it isn’t ad-supported, the company has done the next best thing — priced it low enough that people don’t mind paying for the service every month, even though they may or may not tune in enough to justify spending the money. The low price point — a month for the streaming-only option — is why people put up with the service’s limited access to the latest movies.

Yelp Needs No Help

Another company that has done a good job of combining the three aspects successfully is Yelp. The San Francisco-based company is valued at over 0 million and has 41 million users as of December 2010. Yelp offers reviews of everything from local eateries to maid services. It even has had its share of scandals.

It works because it has the three elements:

1. Clear purpose: to help you find inside information on a local restaurant, for example
2. Simple interface: look up a restaurant, peruse a list, then use the “star-rankings” to decide if you are interested.
3. Yelp is about finding fun and entertainment: going out, finding new places and if all fails, reading the comments which are always a source of amusement.

Being a bit of a big-city snob, I don’t much care about using Yelp, but many others do and use it obsessively. In fact, the company is so popular that Google wanted to buy it, and when that failed, it started trying to kill the service.

Yelp, however needs to scale, that is, have a lot of people use its service so it can keep generating page views, for it needs to show billions of banners to make millions of dollars in revenues. Same goes for other companies.

Like Yelp, Groupon is another company that has combined three elements and built what seems to be (at least for now) a scale business. It has a clear purpose (save you money via discounts), is simple to use (the offers are sent right to your inbox — even my mom can use it) and it’s fun. It has grown massively and is doing a big book of business.

Ditto for Skype, Facebook and several other services that blend these three elements and build enough scale to make money off their audiences. Interestingly, many of these companies found favor outside of Silicon Valley first before they became big in Palo Alto, Calif., so to speak.

Minus One, Hoping for a Home Run

One of the hotter companies on the web these days is Foursquare, the New York-based, location-based-services company. It’s certainly simple to use, and it’s fun to participate in. After all, who wouldn’t like to own the JetSetter badge.

Back in 2000, when the world was going to broadband, Google changed people’s behavior and found growth. I think Foursquare, like many of its peers, is at the right place at the right time, to tap into a the shift to anywhere computing. All it has to do is find its purpose.

It might have found it, though Dennis Crowley isn’t sharing it with us or anybody just yet. I can guess that Foursquare’s true purpose is to help discover new places and new things to do.

Digg Your Own Grave

Every time a service deviates from the magic formula, it tends to lose its way. Let’s take Digg as an example. Digg became popular because:

1. It had a clear purpose: Help find people interesting, mostly tech related content.
2. It was dead simple to use. You submitted a link, got folks to vote it up and eventually, if it was good enough, it hit the front page.
3. It was fun to use. You could discover interesting stories to read. It was even more fun to find your submissions on the front page. You got a sense of joy, which made the experience more addictive.

The company raised a lot of money, and it tried to justify its existence by diversifying into different verticals. Somewhere along the line, the service’s noble mission got hijacked by search engine optimization experts.

If that wasn’t enough, the company decided it needed a new direction. Digg management, displaying a complete lack of understanding of their own core value proposition, took a ham-fisted approach to redesigning the service. It was never meant to be social in a Twitter-sort of way. Instead, Digg had always been social in a group-hug sort of fashion.

Oops!

Now compare that with StumbleUpon, which not only survived eBay but is thriving, quietly, mostly because of its ability to focus on its core values — discovery of content in a simple and fun manner. (See Google Trends comparison chart, below. Red is for Digg and blue is for StumbleUpon.)

I don’t mean to pick on Digg, but it’s a visible example of what happens when companies lose their mission and deviate from the magic formula.

Somewhere in there is a lesson for Quora!

I will follow up with part two of this post, on the importance of connectedness and ubiquity, later this week.

Related GigaOM Pro content (sub req’d):

• Why Google Should Fear the Social Web
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