10/25/2007 - The Next Internet

Personal Computers (PCs) and the Internet are two recent examples of disruptive technology, technology that leapfrogs the existing way of doing business. Disruptive technologies are great for the economy at large as they typically provide a boost to productivity and thus our GDP. They are even greater for investors who catch the wave early. While Internet innovations are far from depleted, it’s probably time to ask: what will be the next disruptive technology, the next Internet? I maintain it will be the Electric Economy.

So what makes a technology disruptive? A technology can exist for years before something happens that makes it disruptive. That “something” tends to be an application, a “Killer Application,” that takes an existing technology from obscurity to mainstream, typically in a short period of time.

Computers were in existence for a long time before they became small enough and affordable to the mass market. But even when they were affordable, and “personal,” they were mostly used by the “geeks” of the world. What was missing, and what was needed, was the KillerApp, the ingredient that takes an exciting technology to the masses, and for that reason, tends to be a consumer product with enough volume to drive the technology across the “disruptive” line.

While PCs were languishing in the hands of the geeks, one of those geeks, Dan Bricklin was busy developing an application that he thought would be useful, the original spreadsheet program called VisiCalc. It turns out that not only was VisiCalc useful to Bricklin, it was the KillerApp that made PCs disruptive, and companies like Microsoft and Lotus cashed in on the volume.

The Internet, originally called ARPANET, was developed by DARPA, the Defense Advanced Research Projects Agency, an agency of the federal government, in the early 1970’s. During the ‘70s and ‘80s it was used by the government and defense contractor technicians to exchange files and email using a cryptic command language. Most people never heard of the Internet, much less used it. In 1993 Marc Andreesen at the University of Illinois and a co-worker developed a program called Mosaic, a graphical user interface to access the Internet that became generically called a “Web Browser.” The Mosaic Browser, which became the Netscape Browser when Andreesen joined Netscape, became the KillerApp for the Internet. Suddenly, the masses could access this backbone network and the demand generated caused a corresponding demand for information which caused the proliferation of Web Servers much to the joy of Sun Microsystems and other server manufacturers. The increase in servers and other devices accessing the Internet created a demand for Internet switches and routers that Cisco et al. were only too happy to fill.

We have had an electricity distribution system in place for many years, and over that time, eight distinct regions have evolved under the coordination of NERC, the North American Electric Reliability Corporation.

While the Internet is an information network, the existing NERC network is a loosely coupled electricity network of similar proportions, and the future backbone of the Electric Economy. We just need the KillerApp that will make the Electric Economy disruptive; and that application is electric vehicles.

Electric vehicles are a consumer product. While they will use considerably more electrical energy than television sets and other appliances, we can begin deploying them immediately because we currently have unused electrical generation capacity in the evenings, when these vehicles would be plugged in and charging. But wide scale deployment will require significant new sources of energy, making electric vehicles the KillerApp. This energy can be provided cleanly by “energy servers” located in our 150,000 square mile solar furnace in the southwest, creating opportunities for companies that manufacture solar energy plant equipment. As Internet servers required additional routers, our energy servers will require routing of their generated electricity into the existing eight NERC regions around the country. This will provide opportunities for companies that built High Voltage Direct Current (HVDC) transmission lines.

The analogies between the Internet and the Electric Economy are straightforward. Where the Internet is an information network that distributes information from servers over routers through distribution to applications like browsers and databases, the Electric Economy will distribute electricity from servers over routers through distribution to applications like toasters and electric vehicles. It remains to be seen who will be the Microsofts, Sun Micros, and Ciscos of the Electric Economy. Here we go again!

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