Sacred Cow Dung: Accenture Global Convergence Forum 2005: Plenary Session

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April 29, 2005

Accenture Global Convergence Forum 2005: Plenary Session

Myth and Reality through the History of Convergence

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There is a lot to be learned about convergence from past experience, particularly when trying to predict where we go next. So Accenture’s Andrew Zimmerman looked first to recent history before suggesting what may be the key driver of convergence in future—trivergence.

The history of convergence touches many industries. In the transportation industry, for example, the development of the autoplane—a combination of car and plane—was seen as a solution to the problem of traveling long distances, before government investment in the highways closed off its prospects.

Highlighting the theme of this year’s Global Convergence Forum, “Convergence: Myth or Reality?,” Zimmerman suggested that at the network level, convergence is a reality now with the ubiquity of Internet Protocol (IP). But at the device level, it’s still unclear whether convergence is myth or reality.

Examples of failures from the past include AT&T’s Picturephone, launched in 1969 at a cost of $500 million (around $2 billion in today’s money) but attracting less than 500 users, and Knight-Ridder’s Viewtron, launched in 1982 and attracting around 20,000 users.

But it wasn’t inadequate or technology that caused these failures. The problem was the “Grand Design” approach: one company launching a service with a state of the art system that 1) offered benefits customers did not understand, and 2) most customers could not afford.

While these failures were occurring, the Internet was developing through the process of co-evolution—the organic interaction among many players which is opportunistic and leads to a commingled outcome. Such a process is the antithesis of the Grand Design. New things are tried; if they work, they are added to the system, of they don’t, they are not.

So today we have an “IP Ecosystem”, which is the foundation for today’s converged world, even it is still unclear where we are headed. As Zimmerman queried, if we have greater convergence, then why do we all have so many different devices? Convergence to date has focused on single devices, not integration across devices. This is a problem for consumers, who are already demanding greater flexibility in playing their media on multiple devices. In a recent Accenture survey of consumers, 70 percent of respondents said they would prefer to buy their digital home solution from a single provider of content, applications, and services.

Yet, this is not necessarily a mandate for a single vendor to do everything, Zimmerman said. Consumers still do want choice when it comes to devices. But they want to be able to control those devices in the same way. They want a consistent access point. As a result, a new device architecture is emerging—the Soft Panel. This development, called “trivergence,” recognizes that consumers are finding it easier to manage their experience through a graphical interface using a Soft Panel. An example is Apple iPod Shuffle which has one button, with the rest of the controls provided through a soft panel that changes based on the users choices.

Zimmerman also pointed out that many of the features on phones that users get excited about today were already available on the old analogue phones, but people didn’t use them. What has made the difference is the development of services like Voice over IP and the ability to control phone features using a Soft Panel.

Focus groups involving early adopters run by Accenture have confirmed the importance of trivergence to consumers. Around three quarters agreed that every device of value should have some form of web-based controls or Soft Panel. Many then said they wanted those controls to be integrated, enabling them to control numerous devices with one Soft Panel. Some then wanted those Soft Panels to be able to learn and understand the user’s preferences.

There are two key issues for the industry: the competition between carriers and software companies for Soft Panel dominance, and the quest for versatility amongst content companies and device companies. On the former, carriers have the advantages of “quadruple play,” registered customers, middleware and network core, while software companies have their web portals, buddy lists, development tools and network edge. In the quest for versatility, content companies need to focus on issues such as distribution and branding, while device companies work on designing stand-alone Soft Panels and developing naming conventions so that devices can be identified clearly.

Trivergence, Zimmernam concluded, will be the dominant theme in the next chapter of the history of convergence.

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Andrew Zimmerman, Partner-Communications, Accenture

The notion of convergence dates back to the early 1980s when several industry leaders conducted high-profile concept tests of what was then called "videotext." The overarching assumption was that the information/communications services of the future would emerge through rigorous planning, focused engineering and a customer-pays business model. At the time, no one anticipated the Internet—the foundation for today's interest in convergence.

Andy Zimmerman will explore early efforts to bring integrated services into homes and businesses both to show how far our thinking has changed over the last 30 years, and to identify lessons learned that are still relevant today. He will then consider recent years, when the perception of convergence has advanced from futuristic to just around the corner. Networked PCs, TVs and mobile devices are now ubiquitous, and the opportunity to connect everything to everything is clear. However, exactly how this interconnection will ultimately take place remains open for debate.

Mr. Zimmerman will examine the assumptions that underlie today's thinking on convergence, including network architecture, collaborative alliances, business models and user priorities. The goal is to dispel any modern myths that may impede sound judgment, and to provide insight into when and how to ride the true wave of convergence.

Mr. Zimmerman, a lead partner in Accenture's Communications industry segment, directs the Strategy service line for the North America East sector of the Communications & High Tech operating group. In this role, he collaborates with wireline, wireless and cable companies to drive shareholder value through improved business performance and new growth opportunities. His expertise includes: strategy development and execution; mergers and acquisitions; and new product and service development.

Prior to joining Accenture in 2003, he was CEO of Predictive Systems, a networking and security consulting and information services company which he sold in 2003. Prior to joining Predictive, Mr. Zimmerman was the COO of idealab! New York. He has led the E-Business and Information, Communications and Entertainment practices of PricewaterhouseCoopers, and held similar leadership positions at Coopers & Lybrand prior to its merger with Price Waterhouse. Mr. Zimmerman has a bachelor of arts from Haverford College and a master of science from New York University.

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