The State of the Internet
Operating System Tim O’Reilly Paypal Innovate November 3, 2009

Cloud Computing “You keep using
that word. I do not think it means what you think it means.”

Web 2.0 “You keep using
that word. I do not think it means what you think it means.”

What Web 2.0 and Cloud
Computing Are Really All About We’re building an internet operating system

An internet operating system? You
must be kidding.  There’s no storage  No scheduling  No processing  No memory management  ... Bram Cohen of BitTorrent, 1st Web 2.0 Conference 2004

"The Law of Conservation of
Attractive Profits" "When attractive profits disappear at one stage in the value chain because a product becomes modular and commoditized, the opportunity to earn attractive profits with proprietary products will usually emerge at an adjacent stage." -- Clayton Christensen Author of The Innovator's Solution In Harvard Business Review, February 2004

Internet Operating System “You keep
using that word. I do not think it means what you think it means.”

The Internet Operating System 
Its subsystems are databases of – People – Places – Things – Prices – Documents – Images – Sounds – Relationships – Trust metrics – ...  and services that help people use them – Search – Payment – Matching and Recognition – ...

The O’Reilly Radar Methodology 
William Gibson: “The future is here. It’s just not evenly distributed yet.”  We “watch the alpha geeks” and think about the futures they are living in  We then look for trend data that tells us that a particular future is becoming mainstream  I’m going to tell you some seemingly unconnected technology stories from the front lines of innovation. Then we’re going to connect the dots.

<1>

The smart phone plus local
search. Today pizza, Pizza Nostra, 300 De Haro CyBelle’s Pizza, 975 Bryant Extreme Pizza, 1062 Folsom

An application running on a
mobile device whose user interface is driven by sensors: - Touch screen - Motion and proximity sensors - Microphone - GPS or cell tower triangulation

An application that depends on
cooperating cloud data services: - Speech recognition - Search - Location

These cloud data services are
combined to do a job that none of them could do alone.

Expect auto-translation

These suggest mindbending possibilities 
Expect automated speech recognition and automated real-time translation throughout Google products  Google Suggest “database of intentions” gives them an advantage in understanding what people intend to say  The Star Trek universal translator is within the scope of Google’s ambition  These products will be relatively weak at introduction but will get better the more people use them.  Speech recognition and translation will be integrated with other applications via web services  Pretty darn cool, and definitely NOT a PC-era operating system!

<2>

Our devices are full of
sensors. New applications are figuring out how to learn from those sensors.

AMEE - the world’s energy
meter

The real world casts information
shadows

Machine Learning not just for
robots

Web 2.0 is about finding
meaning in user-generated data, and turning that meaning into real-time user- facing services. “Web Squared” takes that same concept to real-time sensor data.

<3>

Google Maps with Street View

Cloud + mobile = “Augmented
Reality”

<4>

Cooperating data services? Face recognition
+ Social Network + Location

We learn by “context accumulation.”
Future applications will do so too.

<5>

The big question  If
the Internet becomes an operating system, what is the architecture of that operating system? One Ring to Rule Them All

The big question  What
is the architecture of that operating system? Small Pieces Loosely Joined

The smart phone plus local
search. Today pizza, Pizza Nostra, 300 De Haro CyBelle’s Pizza, 975 Bryant Extreme Pizza, 1062 Folsom

 How cool would it
be to add pizza ordering?

<6>

PayPal  A first order
Internet data subsystem – 80 million active users – 15,000 financial institutions – 190 countries, 24 currencies – Not just payment but identity, fraud detection, risk management, and more  Inherently Decentralized – Internet endpoints call the service to get the benefit of the networked data at the center – P2P Payments – Decentralized website checkout for 60% of e-commerce  A model for the way the internet operating system ought to work

Advice for PayPal

“API design is like sex:
make one mistake and support if for the rest of your life.” --attributed to Josh Bloch

More than payment

You use your wallet for
 Payment  Identification  Loyalty cards, discount coupons  Receipts  Special things to keep and share  All of these things are moving out of the physical wallet, many of them onto the phone  There is a huge opportunity to build innovative new services to do these jobs.  PayPal provides a unique back-end

Build services that mash up
 Speech recognition  Location OpenStreetMap  Social networks  Government  Payment

The Robustness Principle “TCP implementations
should follow a general principle of robustness: be conservative in what you do, be liberal in what you accept from others.” --Jon Postel in RFC 761 (Transmission Control Protocol, 1980)

That’s how we get to
this Small Pieces Loosely Joined

And don’t end up here
One Ring to Rule Them All