Feature Story

Network Trailblazers: A conversation with Irving Wladawsky-Berger

by Scott Gurvey

Irving Wladawsky-Berger talks to Scott Gurvey about the internet evolution, digital money, and the future of the internet.

Most of our Network Trailblazers are men and women who created the technologies behind our connected world. Irving Wladawsky-Berger was on the other side of the equation. In December of 1995, just a few months after the Internet was opened to commercial use, he was named general manager of IBM's new Internet division and given the responsibility of steering Big Blue through the turbulent waters stirred up by the networking revolution.

At the time IBM was still recovering from what Wladawsky-Berger calls a "near-death experience". Although IBM had legitimized the personal computer market with its entry in 1982, it failed to realize the disruptive force the PC would have on its traditional mainframe computer business. As a result the company nearly went under. Wladawsky-Berger was ready. He had held a variety of positions at IBM. In fact, I met him early in the 1990s when I was preparing a story on the future of mainframes for PBS. He had seen firsthand what could happen if a company maintained a blind loyalty to its products in spite of the paradigm shifts taking place in the market.

The challenge, according to Wladawsky-Berger, not only for IBM, but for other companies, was to adapt to a world they had not created and to developments they could not control. It was a world based on open standards instead of the proprietary products the major technology companies had championed up until that time. "It was experimental," he says, "it was very complex but you couldn't wait until you analyzed it."

SG: As you worked to change IBM's culture and approach, what surprised you most as the Internet developed?

IW-B: In 1996, I couldn't have told you that it was going to transform industries the way it has. I couldn't have told you that it was going to absolutely transform the music industry, the television industry, the newspaper industry. We didn't think of those analog industries as digital. The notion that the Internet would subsume industry after industry and cause such havoc…. That's the biggest surprise, how transformative it has been.

Wladawsky-Berger left IBM in 2007. He calls it retirement although I would dispute that claim. He continues to work with the company on a variety of initiatives including Cloud Computing and Smarter Planet. And he is now working with a score of other companies and educational institutions, including MIT's Sloan School of Management, where he is Visiting Lecturer.

SG: What everybody wants to know, of course, is what will be the next disruptive technology?

IW-B: I'm very involved in the transition to digital money, digital payment, which is a huge part of the digital economy. And it's incredibly exciting for many reasons. If you look at the world over 80% percent of payments are still cash based. In the U.S. maybe 20-25% although we're still using checks which maybe are a little more advanced than cash, not too much more advanced. In many European countries there are no checks any more. In the same way that global supply chains became more efficient by going digital in the last 15 years, I think that the financial ecosystem will become more efficient by going digital and that will help everybody over the next decade.

The efficiencies will come, Wladawsky-Berger says, through the elimination of the intermediaries, gate keepers and toll collectors who add cost to each transaction. He believes the biggest societal benefit to result if businesses, governments and individuals have the ability to directly transfer funds, is inclusiveness. As you look around the world you find many people, including the poorest in the least developed regions, who are stuck in a cash or even barter world. But while many do not have bank accounts, or access to a bank branch, mobile telephones are everywhere. Technology which allows mobile devices to be used as a method of payment will revolutionize commerce. Wladawsky-Berger believes these systems will catch on most rapidly in the least developed cultures, which have few traditional banking processes to "unlearn".

Wladawsky-Berger believes the objections to a cashless society from some concerned about privacy and security, as well as by regulatory officials seeking to guarantee the legality of transactions, can be overcome but will require the cooperation of all sectors, including public and private entities.

He does not see success for those who threaten to block access to such a payment system, or even to the Internet itself. He notes that various national and commercial interests have been lobbying for "control" of the Internet almost from the day access was opened in 1995. These attempts, he says, have failed primarily because the users of the Internet will not accept them and they have been very loud and forceful in their opposition regardless of where they are or where the threats are coming from.

While he seems to have very full plate Wladawsky-Berger somehow finds the time to maintain a fascinating blog which he modestly describes as "a collection of observations, news and resources on the changing nature of innovation, technology, leadership, and other subjects." This is no light, breezy bit of opinion. Each entry is a full lecture and the topics cover a wide range. It is a feed well worth placing on your subscription list.


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