Unified Communications and Oil

I know an odd title for many who read my blog but please stay with me on this one as I try to bring the future to the present and hopefully you will understand where I am going with this one.  I do not think there is anyone out there who has not seen some of the first Unified Communications Software first released.  It was released in Star Trek, the original series, on September 8, 1966.  They had communicators, video chat etcetera. It was really cutting edge stuff.  Of course this was before the advent of the software industry.  This type of technology would persevere in film for many years to come.  It was a standard in science fiction.  For those who our not familiar with what unified communications is, it is essentially the “unification” of all the forms of electronic communications.  That would mean video conferencing, voice, email, web meetings, instant messaging and whatever new forms of communications we develop.  Today many companies are working on these type of capabilities including many of the big industry players, which includes Microsoft, Cisco and Google.

My first experience with Unified Communications goes back to 1999 when I was still in telesales working with Internet Service Providers.  In particular I was working with an ISP in Green Bay, Wisconsin.  I had heard about VOIP and video was now also starting to surface (keep in mind the term Unified Communications was not yet around).  I decided what the hell and built a case to my then manager Linda Griffin to allow me to get a head set, a little video camera so that I could effectively stop using the standard voice service provided by Qwest and just do everything over our existing 1omb network (for you nontechnical folks 10mb is not a lot).  This would lead the way in showing Microsoft how it could use technology to save millions of dollars. In short I was a genius.

Linda signed off on my idea and within two weeks I had everything I needed.  I let my client in Green Bay know we were ready to go.  The initial thrill of connecting gave way fairly quick as we established our link.  Using voice was working but it was of very low quality and you never knew when things would cut out.  When we added video a whole new dynamic happened.  The VoIP was reduced to one way communication and I quickly learned that the video was not studio quality and the windows behind me turned me into a shadow (kind of like those people  they interview on TV whose identity they want to protect).  I can’t say it was a humbling experience, I actually believe we learn more through our failures than our successes.  However it was dissapointing in terms of the glorious visions of success I had in my mind.  Most new technologies are not new  but a result of something already tried and in many instances failed.  Well I had achieved the latter.

Which brings us to the second component of the title, oil.  Oil is an industry that has been with us since the latter part of the 1800’s.  Though the techniques to find and extract oil have greatly benefitted from technology after that not a lot has changed in terms of getting oil out of the ground to the market.  No industry had a greater impact on world economics or world politics in the 20th century.  It also stands to have a significant impact on global affairs in the first half of the 21st century. One of the most significant things to happen in the oil industry in et new century occurred in July 2008, this is when the price of a barrel of oil peaked at $147.30.  There are many reasons things like this happen.  The rise of emerging markets has certainly created a “new” demand for oil.  The supply of oil is also changing.  Though there is an estimated trillion barrels of oil still left in the ground (“A thousand barrels a second” by Peter Tertzakian), the ability to get to that oil, process and refine is very expensive.  Though there is a strong movement to look at alternative fuels there is no silver bullet to replace oil and even if there was it would take time to put in place the infrastructure to replace our dependence on oil.  So for the short term (the next 20 years) we will still be heavily dependent on oil.

At this point you may start to wonder where Hans Hoffmann is going with this or maybe you have already guessed, but please bear with me just a little while longer.  Here is the good news.  The down economy we are currently in will end and things will start to return to normal.  We will get back to our desired style of luxury and life will be good, but there is going to be a cost.  The rest of the world is coming with the United States on this recovery and in some instances if not many will ge there before us (India, China and Brazil in particular).  This will put pressure on the basics of supply and demand in oil.  It will put pressure on governments to ease up on oil exploration and drill for more oil.  In short the price of oil will start to drastically increase again.  I will agree with those who forecast the coming of $200 a barrel, to me it seems obvious.  The growth in wind and solar will not be able to stop it.  The cost of pleasure and business travel will increase.  All the while Wall St will continue to ask for better margins on the cost of doing business.

This brings us back to Unified communications and the role it will play in the pending energy crisis.  The technology is nearly there and we will start to bring the future forward.  How we interact with one another is about to change as well.  In the past things like Video teleconferencing were neat but a little stiff in terms of interaction.  A part of that was due to poor quality and expensive costs.  However with the new economic realities and much improved technologies I believe things are about to change.  An example will be my old customer Cisco Systems.  When I would visit some buildings at their offices in Milpitas some buildings had no receptionist.  They simply had a monitor that would sence you enter the door and a receptionist in a central location would handle your request.  What was impressive and what got me to thinking was the great quality of the service and how personal the interaction was.  One of the reasons I have spent so much of a career on a plane is the ability to meet customers in person and establish the account executive to client relationship.  It is not hard to envision that in the near future face to face relationships will be dealt with via Unified Communications with a monitor and a VoIP connection.  The software today is enabling this and with the coming charge towards higher oil prices this will only accelerate the adoption of Unified Communication solutions in global business. As is always the case this change of technology force will upset some industries, but it will spur new ones.  That is nothing new to business and there will be those who profit greatly and those who miss the bus completely.

Hopefully I tied the pieces together nicely for everyone who read this title and wondered out loud, “What the hell is Hans talking about?”.  I thought I would conclude this article with some investment advice, but having seen others do this I thought better of it.  It seems like a gamble geared towards failure.  Not to mention losing a lot of people I consider friends.  Tonight I am going home to watch the Montreal Canadians versus Washington Capitols play an exciting game 7 in the NHL playoffs.  It’s in Washington, but in Montreal’s favor they can claim as one of their favorite sons William Shatner.  We of course love Mr. Shatner for what he brought to television in the role James T. Kirk.  As I began with in this blog the future laid out in Star Trek is upon us (the communications piece not the Enterprise), but it is being driven by an industry rich in history in driving the growth of the 20th century.  So let’s boldly go….

Good Night and Good Luck

Hans H Hoffmann April 28, 2010

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