The Third Wave

There have been two great waves of frenzied technological advancement since 1997, both fraught with hype, but both bringing a sea change to the way businesses think. Now a third wave is upon us.
I started writing about business, technology and the complicated place where they intersect in 1997, just as the venture capital firms were about to fling open the vaults and begin funding what would become the "dot-com boom." As I see it, there have been two great waves of frenzied technological advancement since then -- both fraught with hype, but both bringing a sea change to the way businesses think. Now a third wave is upon us.

The dot-coms brought the first wave. From 1998 to 2000, major corporations across the United States were bombarded by news of 23-year-old millionaire CEOs and start-ups whose market caps rivaled small countries' GDPs. Almost in chorus, executives and IT thinkers began to ask themselves how the Internet was going to play a role in their businesses. When the hysteria passed, in 2000, the "New Economy" turned out to play by the same brutal rules of economics that had always been there in the first place. But what large company came out of the dot-com boom thinking and operating the same way they had when it started? None of them.

Y2K -- remember that? -- was the second wave. From late 1998 until sometime during the early morning hours of Jan. 1, 2000, most every medium- to large-scale business in the United States underwent an internal technological assessment to figure out what would happen when their infrastructure's big odometer started showing one too many zeroes. As it turned out, what happened was nothing much at all. But in terms of the way businesses think, Y2K's impact was real. Old Guard CEOs and CFOs who had always ignored technology matters finally began to understand how deeply intertwined business and IT had become. A wave of infrastructure assessments and upgrades made IT front-of-mind among business thinkers, and it will never slip back into the recesses.

The third wave, one that began last year and will stretch out longer than either the dot-coms or Y2K, is radio frequency identification technology. RFID is not one of those useless and soon-to-be-forgotten acronyms that plague IT pros and the guys like me who write about technology. Its impact on the way businesses think about themselves will be fundamental. That's the key word here: "think."

RFID technology takes the things businesses make, sell, store and ship, and transforms them into pieces of data. The Auto-ID Labs at MIT, which pioneered the technology, talk about using RFID to create "an Internet of things." When every case or pallet or individual bit of stuff that businesses handle becomes identifiable and (therefore) trackable, what follows is an avalanche of potential intelligence not just about those things in aggregate but every process that surrounds them. We're talking about sweeping changes to the volume and types of data available to businesses about themselves. We're talking about monumental data and analytical challenges. And we're talking about a seismic shift in the way businesses -- the ones that deal with hard goods, at least -- think about and understand themselves.

RFID's final impact on business is going to tease itself out over a much longer period of time than the emergence of the Web or the Y2K scare did -- think a decade rather than a couple years. But the big question remains the same: Where will this technology lead us? Once again, we don’t know. As with the dot-com boom and Y2K, our outcome is open to speculation and certain to be unexpected in many ways. As with those other waves I saw first hand, I expect unwarranted hype surrounding specific applications of RFID. But also as before, the impact we'll see is going to be very, very real.

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