2. The X Internet: Leveling the playing field for businesses in developing nations Navi Radjou Senior Analyst Eroica Howard Research Assistant to the CEO

3. 197019751980198519901995200020052010 Waves of Internet innovation FTP Email Telnet Gopher WAIS Web ????? Internet users

4. Theme The X Internet will let businesses in developing nations do more with what they have

5.  What’s behind the X Internet?  What is the X Internet?  Early adopters of the X Internet in developing nations  When will these changes take hold? Agenda

6. What’s behind the X Internet?

7. Bandwidth lags other technology improvements Computing Storage Bandwidth 4 MHz 8088 0.1 MB floppies 0.3 Kbps modem 1981 25 MHz 80486 30 MB hard drive 9.6 Kbps modem 1991 2,000 MHz Pentium 4 100,000 MB hard drive 300 Kbps share of T1 line* 2001 * Though most PCs and servers ship with 100 Mbps networking interfaces, actual Internet throughput remains limited by corporate Internet connections 50% 62% 27% CAGR

8. Bandwidth continues to lag processing and storage technologies Moore’s Law

9. Today’s “last-mile” bottlenecks

10. X Internet moves beyond bandwidth’s limits Moore’s Law Mainframes and Green screens Client/server The Web X Internet

11. What is the X Internet?

12. The X Internet refers to two “Xs” An executable Internet that supplants today’s Web An extended Internet that connects to the real world

13. Executable Internet builds conversations Server Endpoints

14. The Web only provides answers Account summary The Web How much is in my account?

15. The executable Internet The executable Net creates a conversation What should I do with my account? Financial services tools (executables) Two-way conversation about my account

18. Isn’t this just Java?  Java is a piece of some solutions  But there are other alternatives

19. Extended endpoints Extended Internet -- an Internet of things Server Endpoints

20. The X Internet connects digital to physical Internet computers Digital Internet users Physical Vehicles Telephones Buildings

21. Temp:52° F Fuel:1/2 tank Door:Closed Tag is integrated with door, fuel, and temperature sensors Sensor data is transmitted every few minutes WhereNet devices simplify supply logistics

22. Yard inventory is conveyed to users through maps and reports Colors indicate trailer status and alert conditions

23. Early adopters of X Internet in developing nations

24. X Internet pioneers in developing nations  Hanssem Kitchen Ware (China)  EAN International (www.autoidcenter.org)  CK Tang Department Store (Malaysia)  UNCTAD/Savi Technology partnership

25. Case study: CEMEX (Mexico)  GPS-enabled truck fleet  20-minute delivery window  Savings: $100 million

26. When will these changes take hold?

27. The three waves of X Internet adoption Product fit Bits-to-atoms ratio in end products Intangibility of supply chain assets 2 3 4 5 High 1 Low Industry readiness Value chain simplicity Propensity to adopt cross-firm apps HighLow 12345

28. X Internet devices and spending 200120022003200420052006200720082009 2010 5 10 15 Devices (billions) Devices Spend $1 $2 $3 Spend (US$ trillions)

29. Summary  The executable Net will supplant the Web  The extended Net will connect digital to physical  The X Internet will let businesses in developing nations do more with what they have

30. Thank you Navi Radjou Eroica Howard nradjou@forrester.com ehoward@forrester.com +1 617/613-6119 +1 617/613-6295 www.forrester.com