Just a reminder, the roadmap of the Web is 3.0 = Cloud Computing; 4.0 =Artificial Intelligence Complementing Humans; and 5.0 = Artificial Intelligence Supplanting Humans (Refer to AI 1).
Why is this important (yet again)? It’s because this roadmap is happening faster than most people realise and it will change the economics of everything.
Now it’s great to report some big monetary evidence.
The Motley Fool reported a stark warning to investors that Web 3.0 will undermine Microsoft big time (see extracts below) on the 20th September 2008.
Two days later Microsoft announce a $40bn buy back of its own shares as a defensive hedge as the Web 3.0 threat becomes more credible.
But for those grappling with what is going on need to also understand that Web 4.0 is already started in earnest as Virtual Worlds, which are its foundation is gaining rapid traction. These Virtual Worlds will threaten Google (and Microsoft) as they are Closed Systems that cannot be penetrated by Google’s public search engine. Do not be surprised that Google takes a defensive action and follows Microsoft by buying back its shares. It is this point that the Motley Fool missed as it thinks Web 3.0 is it! Smart investors are already funding Web 4.0 (refer to AI 46).
However, the Motley Fool’s advice is to invest now into Web 3.0 but be careful as Web 4.0 and Web 5.0 will become the differentiators.
Here is the extract from The Motley Fool by Kate Ward
The two words Bill Gates
doesn't want you to hear...
They spooked the Microsoft founder into early retirement. Now they're going to bring down his empire and make a handful of investors rich. You can join them -- but you must act now.
On October 30, 2005, something incredible happened...
In Redmond, Washington, one of the world's richest -- and most powerful -- businessmen sent an urgent memo to his top engineers and most-trusted managers.
It sounded the alarm that a very disruptive "wave" was about to wash over the entire world -- forever changing the way we get information and do business.
It also warned this would wipe out the $300 billion business empire he'd spent his life building.
Meanwhile, a few hundred miles south, on the banks of the Columbia River, a mysterious outfit known only as "Design, LLC" quietly constructed two massive, windowless warehouses.
This mammoth undertaking was code named "Project 2," and the International Herald Tribune described the towering monolithic structures as "looming like an information-age nuclear plant."
I realize this may sound like something out of a Tom Clancy novel, but I think you'll want to bear with me, because...
Merrill Lynch estimates this "wave" has grown into a $160 billion tsunami
And experts say it's going to upend a $1 trillion industry. Yet very few investors understand just how huge it's going to be.
I warn you, the smart money is on the move...
A handful of investors are already quietly positioning themselves to cash in on this incredible economic shift. Soon, tens of thousands will be rushing to join them.
One of the most lucrative investment opportunities we'll ever encounter
This story is so big that we have to step clear back to February 28, 1881 to put it into perspective.
On that chilly winter night, a 21-year-old British stenographer named Samuel Insull arrived in the port of New York aboard the City of Chester.
Thomas Edison's chief engineer had lured him to America to serve as Edison's private secretary.
11 years later, Insull oversaw the merger that created General Electric, and shortly thereafter was offered the presidency of the Chicago Edison Company.
Little did anyone know, the world of electricity was about to drastically change.
At the time, cities like Chicago had dozens of small, privately owned power stations transmitting direct current (DC) electricity to neighborhoods within a small radius.
With due respect to Edison, Insull knew that the model Edison had created was flawed.
So he set out to transform Edison's legacy into something far greater and more efficient than its creator had ever imagined.
In doing so, he forever changed the world
Insull realized if he could create a "utility" by building giant central power stations that would transmit alternating current (AC) electricity over great distances...
These power stations could be linked to form a giant grid that would serve homes, businesses, and industries in even the most remote locations.
Once electricity was readily available everywhere, more and more electric-powered devices would come to market -- creating more and more demand for the electricity that the utilities produced.
And here's the kicker...
Because these utilities could match supply with demand, realize superior economies of scale, and use their generating capacity much more efficiently, they could deliver electricity for a fraction of what it cost people to produce it on their own.
And Insull was right on the money!
By 1907, utilities produced 40% of the power in the U.S. In 1920, that number stood at 70%, and a decade later, it was over 90%.
What was once unimaginable had suddenly become reality.
Now, history is repeating itself
The next great technological revolution is already under way.
And now that the last pieces are falling into place, the floodgates are beginning to open -- meaning the big money is about to start rolling in...
Which is exactly why I'm writing you today.
You see, one of the most successful investors I've ever met is convinced that this technological shift will dump millions of dollars into the portfolios of investors just like you.
But in order to claim your fair share of the wealth, you have to know who the dominant players are -- and you have to get invested now.
The unimaginable is fast becoming a reality
You probably remember when computers took up entire rooms and were used only by companies that needed to do intense mathematical calculations.
That all changed when Intel unveiled the microprocessor and a geeky college dropout started writing software with his former high school pal.
Thanks to the virtual desktop they developed, the PC quickly replaced the mainframe as the center of corporate computing and began showing up in homes across America.
Before long, companies began building interoffice networks so that their employees could run programs like Microsoft Word and Excel on their PCs, and also access programs, files, and printers from a central server.
But, like Edison's, this model was far from perfect.
Due to a lack of standards in computing hardware and software, competing products were rarely compatible -- making PC networks far more inefficient than their mainframe predecessors.
In fact, most servers ended up being used as single-purpose machines that ran a single software application or database.
And every time a company needed to add a new application, it was forced to expand its data centers, replace or reprogram old systems, and hire IT technicians to keep everything running.
As a result, global IT spending jumped from under $100 billion a year in the early 1970s to over $1 trillion a year by the turn of the century.
Here's the dirty secret behind this mind-boggling growth -- and the two words that will put an end to the party
IT-consulting firm IDC reports that every dollar a company spends on a Microsoft product results in an additional $8 of IT expenses.
And one IT expert admits,
"Trillions of dollars that companies have invested into information technology have gone to waste."
Yet, companies have had no choice but to run these obscenely expensive and highly inefficient networks.
But that's all about to change...
And that's precisely why the two words "cloud computing" scare the hell out of Bill Gates.
You see, he realizes that thanks to the thousands of miles of fiber-optic cable laid during the late 1990s, the speed of computer networks has finally caught up to the speed of the computer processors.
As IT expert Nicholas Carr explains, "What the fiber-optic Internet does for computing is exactly what the alternating-current network did for electricity."
Suddenly computers that were once incompatible and isolated are now linked in a giant network, or "cloud."
As a result, computing is fast becoming a utility in much the same way that electricity did...
"The next sea change is upon us." -- Bill Gates
Think back a few years -- anytime you wanted to type a letter, create a spreadsheet, edit a photo, or play a game, you had to go to the store, buy the software, and install it on your computer.
But nowadays, if you want to look up restaurants on Google... find directions on MapQuest... watch a video on YouTube... or sell furniture on Craigslist... all you need is a computer with an Internet connection.
Although these activities require you to use your PC, none of the content you are accessing or the applications you are running are actually stored on your computer -- instead they're stored at a giant data-center somewhere in the "cloud."
And you don't give any of it a second thought... just like you don't think twice about where the electricity is coming from when you plug an appliance into the wall.
But cloud computing isn't going to be just a modern convenience -- it's going to be an enormous industry.
You see, everyone from individuals to multinational corporations can now simply tap into the "cloud" to get all the things they used to have to supply and maintain themselves. This will save some companies millions and make others billions.
"Is cloud computing the next big thing?"
That's the title of an article in PC Magazine.
The answer was an overwhelming yes. And PC Magazine isn't the only one taking note of this sweeping trend...
The Economist claims, "As computing moves online, the sources of power and money will increasingly be enormous 'computing clouds.'"
David Hamilton of the Financial Post says this technology "has the potential to shower billions in revenues on companies that embrace it."
And Nicholas Carr, former executive editor of the Harvard Business Review, has even written an entire book on the subject, entitled The Big Switch. In it, he asserts: "The PC age is giving way to a new era: the utility age."
He goes on to make this prediction: "Rendered obsolete, the traditional PC is replaced by a simple terminal -- a "thin client" that's little more than a monitor hooked up to the Internet."
While that may sound far-fetched, in the corporate market, sales of these "thin clients" have been growing at over 20 percent per year -- far outpacing that of PCs.
According to market-research firm IDC, the U.S. is now home to more than 7,000 data centers just like the one constructed on the banks of the Columbia River in 2005.
And the number of servers operating within these massive data centers is expected to grow to nearly 16 million by 2010 -- that's three times as many as a decade ago.
"Data centers have become as vital to the functioning of society as power stations." -- The Economist
The simple truth is that cloud computing is becoming as big a part of our everyday lives as cell phones or cable television.
While the market for this software sits at roughly $1 billion today, it is estimated to soar to $5 billion by 2011 -- an astonishing 50% compound growth rate.
A small group of investors is about to build bold fortunes...
Will you be one of them? You could be.
Remember Web 4.0 and Web 5.0 as they are coming in fast towards mainstream.
