Pervasive Computing in a Networked World

Thomas C. AGOSTON <agoston@us.ibm.com>

IBM Global Services
USA

Tatsuro UEDA <ueda@us.ibm.com>

IBM Global Services
Japan

Yukari NISHIMURA <yukari2@attglobal.net>

Nishimura Marketing Services
Japan

Abstract
Almost everyone has heard of net-connected soft drink vending machines, but how
will we reach the dream of pervasive computing -- a billion people interacting with a
million businesses online via a zillion intelligent, interconnected devices?

This paper examines the market environments, emerging technologies, and scenarios
for networked applications enabled by pervasive computing, environments created
when computing power and network connectivity are embedded in virtually every
device humans use.

The market environment encompasses (1) industry convergence; (2) organizations'

and individuals' needs to move closer to customers, suppliers, partners, and
constituents; (3) changing business processes; and (4) the explosive growth of e-
commerce and online interaction and communities.

Technologies include (1) mobile and wireless data; (2) imbedded intelligence; and (3)
Pervasive Service Utilities linking multiple applications, multiple connectivity paths
across multiple devices, and standardization issues.

Networked applications involved include the following:

1. Business-to-business: Web access; e-mail; Global Help Desk (covering

infrastructure, platform, middleware, and vertical and horizontal applications).
2. Business-to-consumer: phones; pagers; PDAs; mobile laptops; screenphones;
home appliances; and automobile electronics.
 3. Industry applications: travel, health care, sales automation, banking, securities,
media, and health.

These developments affect more and more of the world's population as we move
towards an increasingly networked world. This paper (1) examines these issues and
developments to date, with a particular focus on services geared to the Asia-Pacific
marketplaces; (2) discusses the social and cultural factors affecting technology
adoption in two major markets -- Japan and the United States; and (3) looks at an
early "pervasive" service in Japan.

Contents
 1. What is pervasive computing?
 2. Cultural and social aspects: comparing Japan and the United States
 3. A pioneer service: Japan's DoCoMo
 Conclusion
 Notes

1. What is pervasive computing?

1.1 Technology is moving from personal computers (PCs) to handheld,
intelligent, and everyday devices with imbedded technology and connectivity

Pervasive computing provides convenient access to relevant information and

applications through a new class of ubiquitous, intelligent appliances that have the
ability to easily function when and where needed. The name pervasive computing tells
only part of the story; a parallel revolution lies in network-enabling these pervasive
computing devices by providing transparent, ubiquitous access to e-business services.
At last year's international Telecom 99 conference in Geneva, the global
telecommunications carrier industry focused on the "information" industry. Concepts
such as "wireless Internet" were hot. However, even the mighty telco carriers need
partners in order to cover the breadth of disciplines necessary to provide pervasive
computing services successfully.

The long-promised paradigm shift of convergence may finally be occurring. Virtually

all types of information technology companies are targeting the same area: hardware
(PCs, Palm, and other personal organizers; routers, switches, and consumer
electronics); software (operating systems, application, middleware, and network
management); Internet, telcos, wireless, and other service providers; consultants,
system integrators, and networking; along with broadcasters, cable TV, and content
providers. Thus, cross-industry partnerships and other linkages combining respective
expertise are becoming quite commonplace. But pervasive computing is a bit of a
Rorschach ink blot -- different viewers see different subjective opportunities in this
emerging market space.

If we say that pervasive computing means

Anytime/Anywhere-->Any Device --> Any Network --> Any Data

then let's look closer at these elements:

 Anytime/anywhere: 7 days x 24 hours, global, ubiquitous access.

 Any device: PC, Palm/PDA, cell phone, and so forth.
 Any network: access, notification, data synchronization, queued transactions,
wireless optimization, security, content adaptation/reformat, development tools,
device and user management.
 Any data: e-mail, Personal Information Manager (PIM); inter-Intranet; public
services.

Vertical application solutions (banking/finance, sales automation, visiting specialist),

horizontal application solutions (Supply Chain Management (SCM), Enterprise
Resource Planning (ERP), Customer Relationship Management (CRM)).

Our employer, IBM, along with other total solution providers, is focusing on building
some of the necessary technologies: imbedded software (Java), speech technology,
low power management, network administration, subscription management, content
transcoding (e.g., from HTML to Wireless Application Protocol [WAP]), backwards
compatibility, wireless transmission, and security, (e.g., for equity trading). We are
building an in-network Service Delivery Platform (SDP), which connects existing
content (e.g., a financial institution such as a stock brokerage) to end-user devices,
and provides security, transcoding, and user management. This SDP also enables
service provision, acting as a Pervasive Services Utility (PSU). Accompanying the
SDP/PSU is a client that enables easy connection. To deploy services, we are
collaborating with carriers, telecommunication equipment manufacturers,
automobile/device manufacturers, financial services companies, and enterprise
application vendors.

A major requirement is integrating all this technology to deliver real solutions to

users. For example, banks and securities brokerages want to link existing financial
trading systems to wireless networks. The same holds true for the travel industry and
their reservations systems, not only for the convenience of directly reaching their
customers, but for added real-time functionality -- for example, sending a message to
a passenger that a flight is delayed, and listing three alternative travel options. Or in
health care for enabling immediate access to patients medical records. Telematics and
the "network vehicle" promise network-connected clients in cars, not only for driver
navigation and communication, but for connecting the vehicle to the manufacturer and
maintenance/service providers. Such networked services enable new relationships
between these providers and their customers.

The Web has proven its value to business by linking various players. Pervasive
computing promises even more interaction among players, such as

 suppliers (commodity, strategic, component, emerging),

 customers (catalog shoppers, solution communities, prospects),
 partners (value-added),
 employees (sales, marketing, technical, finance), and
 influencers (press, consultants, shareholders).

Pervasive computing is valuable to business users because of today's environment --

global (anywhere), 7x24 (anytime) -- and requirements to increase revenues (new
channels, markets, and transactions), improve customer service (loyalty, competition,
and differentiation), and decrease costs (efficiency, competition, and cycle time).

1.2 Pervasive solutions enable anytime, anywhere information exchange and

access to applications

(Query/Action <--> Information/Transaction):

 Communications: messaging, paging, e-mail, news, finance, sports, and so

forth.
 Professional productivity: sales force automation, order and delivery
confirmation, contract signing, medical prescriptions, travel reservations,
insurance claims processing, business-to-business commerce.
 Customer relationship management: banking, equity trading, online bill
payment, entertainment ticket purchase, medical data access, mobile shopping,
delivery status, travel reservations, business to consumer e-commerce.
 Business process (SCM, ERP): asset tracking, dynamic distribution
management, remote diagnosis, health care monitoring, medical access to
patient data.

1.3 Examples: When we say pervasive...

Towards the end of 1999, many news articles appeared about appliance firms
planning to link their products to the Internet for maintenance, product orders, and
upgrades. As the new year began, announcements of strategic alliances between
appliance manufacturers and technology companies brought these plans closer to
reality. Announcements included the following:

 An exercise machine maker that plans to equip its products with free Web
service -- so that a technologically oriented lifestyle needn't be sedentary
(Nettles Communications Inc., 1/21).
 Elevators in commercial buildings equipped with 10-inch Internet display
screens that continually deliver news, financial data, and advertising
customized for each captive audience (aptly-named Captivate Network Inc.,
1/15).
 A convection microwave oven that downloads recipes and automatically sets
the time, adjusts the power, and does the roasting, baking, and broiling (Sharp
Electronics Corp. 1/17).
 A net-connected refrigerator with bar code-based food tracking and reorder
capability (General Electric, 1/18).
 Other "command center" and "Home Gateway" technology (manufacturers are
estimating Web appliance availability in 2001).

All of these reports add to the promise of pervasive computing and its revolutionary
possibilities as the Web's connectivity spreads globally.

1.4 Standards issues

The lack of established standards continues to pose problems, and battles are
emerging similar to those that occurred between Betamax and VHS in the home-video
industry. Producers of competing software enabling different Internet appliances to
talk to each other are making their case with appliance manufacturers. At a January
builder's show, GE and Maytag announced they would join Microsoft Corp. in
developing technology solutions and standards for so-called smart appliances by
joining the Universal Plug and Play Forum (UPnP), a cross-industry group of more
than 65 companies, including Sony, IBM, and Intel. But GE also has a similar
agreement to use Sun's Java and Jini technology. In addition to its deals with Sears
and GE, Sun has agreements with Whirlpool, Bosch Siemens, Motorola, and Cisco.
Sears has announced several nonexclusive agreements. At this time, a dominant
standard is elusive.

1.5 "Dick Tracy" wrist devices

As in real estate where "location, location, location" is key, the wrist is seen by some
as the most accessible place on the body. Thus, companies promise consumer wrist
devices that have function lists as long as your arm -- doubling as cell phones, pagers,
e-mail readers, computers, cameras, MP3 music players, television receivers, voice
recorders, automobile security keys, VCR remote controls, health monitors, weather
stations, compasses, Global Positioning System monitors, altimeters, and games. With
an active transponder, some can function as admission passes for ski lifts and
museums. And, almost as an afterthought, they tell time (Motorola, Samsung, Timex,
Seiko-Epson, Casio, others, 1/20)

2. Cultural and social aspects: comparing Japan and the

United States
Worldwide, the United States is the leading market in terms of e-commerce adoption,
judging by transactions using 800 toll-free telephone, direct marketing, and e-business
Web sites, but Japan is ahead with devices and ubiquitous connectivity networks
supporting emerging applications. The growth in e-commerce is lagging in Japan
because of a cultural preference for face-to-face transactions, especially in the
business-to-consumer market space.

2.1 Does this disparity imply two different futures for pervasive computing or,
due to cultural differences, merely divergent paths leading to common
networked applications ?

First of all, we need to examine the drivers of pervasive computing. An important fact
is that people generally do not adopt new technology merely because of its novelty.
Although there is a small group of users who are constantly looking for the latest
gadget to satisfy their interest in leading edge technology and to stay ahead of the
general public, these users do not create critical mass. Years ago, some early adopters
were willing to pay $5 a minute for cellular phone services. Note that the Internet was
already available to academic researchers long before the Web arrived. However,
what wove those services into our daily life was not the technology itself but
the convenience it brought. Convenience varies from place to place, and occasion to
occasion. Taking less than a minute to walk to a nearby convenience store is more
convenient than driving ten minutes to a supermarket. Pumping gas into one's car
during the commute home is convenient, but having to do the same on a weekend may
not be. What seems convenient here and now may be inconvenient in different
circumstances. Mobile computing has become popular by closing gaps in different
circumstances when a user performs necessary tasks.

It is also important to understand the purpose of an action that makes a new

technology convenient. Pumping gas is not a necessity for people who regularly
commute by train. Being able to order books online is not a convenience for people in
places where bookstores exist right where they catch trains daily (as is the case in
Japan). The point is that pervasive computing will have distinct forms of adoption
depending on how people behave socially. What needs to occur differs from society to
society depending on existing social and cultural systems, and what "pervasive"
stands for may also be quite different.

2.2 Technology is a basic driver of pervasive computing, but people's behavior is

the ultimate determinant, dictating unique factors by country, culture, and
region

Let's compare the business and consumer sides of pervasive computing in Japan and
the United States. Businesses are always in need of effective communication. Whether
interpersonal or intercorporate, the speed, accuracy, and quality of information
exchanged are vital factors of business competency. Nevertheless, there are different
approaches among cultures to achieving this goal of sharing (or not sharing)
information effectively. Management styles vary. The general tendency of people to
distinguish job-related interpersonal relationships from personal relationships varies.
The way people live outside of work varies. Specifically, the U.S. business
management style is more open to allowing employees to work within a prescribed
process, and providing information resources to let them work effectively within that
process. In contrast, Japanese management tends to require interpersonal decisions to
move processes forward, and often information resources are found within the
boundary of a person who assumes responsibility for the information. In this context,
when it is management's decision to adopt new technology, pervasive computing will
be adopted differently. In the United States, pervasive computing will give everyone
the same standing, but in Japan it may be a means to easily create more controlled
layers or groups of information access.

On the consumer side, convenience stores ("combi's") provide a ubiquitous retail

outlet presence for urban Japanese. Combi's are readily accessible in both residential
and business areas, often located literally just a few steps out the front door. In
contrast, Americans have come to depend on the automobile or other forms of
transportation for access to retail locations -- hence, the greater appeal of "couch
potato" e-commerce including delivery in the United States. The Japanese market
does not have a strong demand for IP-enabled refrigerators monitoring contents when
food retail outlets are immediately accessible.

Differences are illustrated in consumer behavior. Internet use in the United States has
substantially impacted the way people shop, trade stocks, manage funds, educate, and
even participate in politics. Japanese use of the Internet is more at the level of novel
entertainment or advertising. This contrast comes from different necessities of having
computer-enabled information access at home. Whereas U.S. consumers may look for
information about products and services on the Internet, Japanese consumers often
already have it through a much higher exposure to advertisements, magazines, and
papers they read on the train while commuting, or from ubiquitous billboards visible
on most major streets. For shopping, Japanese retail shops are located within a few
steps of offices, train stations, and homes. In such a society, it makes more sense to go
out and buy what's needed rather than logging on and surfing the net. Pervasive
computing offers ubiquitous access to information without requiring much user effort.
U.S. consumers may welcome this as a radical change in information access, but
Japanese consumers may see it as redundant. The value of pervasive computing in a
society such as Japan, where people closely communicate and share common means
of engaging in social activities, may be in enhancing interpersonal communication.
Sending and receiving messages on handheld devices will be in great demand, and
enabling devices to interface with others will greatly accelerate pervasive computing.

2.3 Different ways people embrace technology and incorporate it into daily life

Technologies can change the way people work, live, and commute. Many first-world
citizens are coming to depend on various appliances and devices such as the
telephone, TV, and microwave. For many, it would be difficult to live without the
convenience and services these provide. The future may offer enhanced wearable
devices (not only hearing aids and pagers, but identity transponders worn on the body
that allow self-service checkout at the cashier-free supermarket by debiting the
customer's account), imbedded devices (a blind person with brain-imbedded visual
sensors), and perhaps high-tech piercing (based on form or function!).

Home appliances already have adopted pervasive computing functions in Japan. Some
appliance manufacturers have introduced microwave ovens that download cooking
recipes from the manufacturer's server. Although not Net-connected, rice cookers
have long been equipped with microchips that control the heating sequence. Air
conditioners also have used sophisticated temperature control employing "fuzzy"
logic. All have the potential to become interactive. This sophistication in home
appliances in Japan may be attributed to the fact that many families emphasize
domestic activities such as cooking, cleaning, and maintaining housing. It may take
comparatively longer for the United States to adopt appliance computerization
because households take less time to engage in such domestic activities. In financial
applications, the use of cash is preferred by far over credit cards in Japan, and
personal checks are virtually unused. U.S. society has long adopted cashless monetary
settlements (i.e., credit/debit cards, personal checks), which can be easily converted to
the use of pervasive devices. In this context, adoption of pervasive computing may be
characterized as interpersonal and domestic in Japan, and business oriented and social
in the United States.

2.4 Physical characteristics of devices

The shape and physical characteristics of pervasive devices also vary. The U.S.
lifestyle allows devices to be somewhat larger than in Japan, where they need to be as
small as possible to gain popularity. Americans generally travel by car; devices
therefore are not required to be as light and compact as in Japan, where a majority of
people take public transportation and walk. Also, Japanese users tend to be attracted
by style and physical characteristics even if the contents and services are limited. A
general tendency in the Japanese consumer market is that the devices themselves
(hardware) initially are more attractive than the contents; the contents provide
secondary attraction, and subsequent growth in contents and services. The Japanese's
preference for portability will provide incentive for manufacturers of handheld
pervasive devices to quickly deliver multifunction devices that are small enough to
wear on the body rather than actually being only handheld.

For embedded technology, such as in automobile and home appliances, the Japanese
often are attracted to more function than they may actually need, expecting to be able
to use services and contents when they become available. They select products by this
criteria when purchasing. This tendency may explain the rapid introduction of Web-
enabled home appliances mentioned earlier. The U.S. market may be opposite: People
tend not to buy equipment until contents and services are established and available,
which calls for a certain maturity in the industry before device-level competition takes
place. In this context, pervasive computing may present divided models where Japan
leads the equipment and the United States leads the contents, as in the home
audio/video market today.

Although the United States leads with per capita PC usage and penetration, cell phone
usage is higher in parts of Asia and Europe. Cell phones are no longer limited to voice
communications; customers can have wireless access to banking, travel reservations,
and other mostly consumer applications. An example (circa October 1999) is the
Nokia 9000 GSM phone, complete with a keyboard, screen, and Windows-type
interface including browser. In Finland and Japan, school students use small, portable,
inexpensive wireless devices to send short text messages to each other (inside and
outside the classroom!).

3. A pioneer service: Japan's DoCoMo

DoCoMo, the wireless unit of Nippon Telegraph & Telephone Corp. (Japan's
dominant carrier) has sparked an explosion of Japan's cell phone market, now one of
the world's largest and most sophisticated. DoCoMo grew from a vision that the future
of the mobile business lay not in voice calls but in services such as Internet access.
Japan's mobile phone market now boasts 50 million subscribers (half of which are
DoCoMo customers) versus about 75 million in the United States, a country with
double the population. Demand for mobile services has exploded, creating a shortage
of DoCoMo's wireless spectrum. It plans to roll out so-called third-generation (3G)
cellular technology, which uses spectrum more efficiently, in early 2001 -- years
ahead of the United States and even ahead of Europe's advanced mobile players.

A current example of an early pervasive service is DoCoMo's "i-Mode," a precursor to

3G services, which offers access to several thousand Web sites using WAP so their
content fits onto the small screens embedded into i-Mode phones. Typical popular
content includes banking, travel, and weather information, but as described below, the
primary attraction is transactions in these application areas. The number of i-Mode
customers is now growing by 15,000 new subscribers each day; by March 2000 it will
have about 5 million total subscribers, after starting with none in early 1999.

I-Mode's success is already giving Japan a role in shaping the next wave of the
Internet. Japan was a follower in the current wave: Dominated by Microsoft, Intel, and
U.S. PC makers, it centers on surfing the Web via PCs. The next wave, pervasive
computing, is expected to be dominated by Internet appliances -- cheap, easy-to-use
devices like cell phones and game machines that could eclipse the PC, as it exists
today, as the tool of choice for tapping e-business services.

DoCoMo's success is giving Japan a head start in developing high-speed Internet

services that are at the heart of 3G, such as video and interactive games, over mobile
phones and other portable devices. The potential of 3G has spurred Japan's computer
and electronics giants, who were humbled in the 1990s as nimble U.S. companies
bested them in the PC market and European makers dominated the cell phone
business outside Japan. Worldwide ambitions ride on Japan's mobile Internet success;
Japanese technology companies are investing vast sums in the belief that working
with DoCoMo will give them a lead over rivals when 3G rolls out in Europe and the
United States in coming years.

As a first step by NTT DoCoMo to expand its i-Mode wireless-phone Internet service
overseas, it will license its technology to Hutchison Telephone Co., Ltd. (HTC), Hong
Kong's largest wireless service provider. NTT DoCoMo took a 19 percent stake in
HTC in late 1999. This deal will allow the same content to be provided to users of
HTC's phones, which use a different wireless communication standard. NTT
DoCoMo is considering expanding the service to the United States and Europe next.

A testament to investors' confidence in the potential for wireless is that the value of
DoCoMo's stock, which was listed in 1998 on Japan's stock market in the world's
biggest-ever IPO, surpassed that of parent NTT domestic wireline carrier in late 1999.
Multinational telco equipment manufacturers, including Telefon AB L.M., Ericsson,
Fujitsu Ltd., NEC Corp., Nokia Corp., and Lucent are working with DoCoMo,
designing 3G handsets, base stations, and services. These companies are trying to
make 3G into a global standard so that the same phone can work in Tokyo, Paris, or
New York. Today the United States has three major standards, Japan its own unique
standard, and Europe and a number of countries in Asia use the dominant technology,
known as GSM.

3.1 I-Mode service adoption, demographics, and usage

In Japan, the majority of i-Mode users are in their twenties. Overall, cell phone
("Keitai Denwa") users' ages are spread equally from their teens through their forties,
but among users who already have a cell phone, a majority of those in their thirties
and forties don't feel the need to replace their current phone in order to get i-Mode. In
contrast, people in their twenties are very quick in upgrading to i-Mode, as a fashion
statement and expression of their identity rather than for convenience.

Thus, i-Mode applications can be separated into two categories -- practical, and
fashion/self-identity. For practicality and convenience, applications include the
following:

 Banking. Due to the lack widespread use of personal checking in Japan, this
function is extremely useful for paying bills, such as rent, by invoking direct
electronic funds transfer.
 Travel. This application is useful for viewing schedules for commuting and
"Bullet" trains (Shinkansen), airplanes, and availability of hotel rooms;
reserving tickets; and making hotel reservations.
 Ticketing. This application is useful for checking availability and making
reservation for concerts, movies, and other events.
 E-mail. As Japanese commuters spend lots of time on crowded public
transportation where cellular voice usage is discouraged, recently many young
people communicate by sending e-mail using their phone keypad, rather than
talking. Whereas older users find it inconvenient to type messages using a
phone, younger users have mastered it very quickly.

Currently, these are four major practical i-Mode applications, but other novel uses are
growing ,such as a GPs navigation service for pedestrians. For 400 yen per month
(U.S.$3.80), i-Mode users can see immediately where they are walking on a small
map that indicates banks, convenience stores, retail outlets, restaurants, department
stores, supermarkets, hotels, hospitals, schools, and other facilities. Weather reports
can also be called up before deciding whether to grab an umbrella.
For fashion statement and entertainment, applications include the following:

 Chakumero. A melody announces incoming calls: "chaku-mero" is a shortened

word for "chakusin (receiving calls) melody." The music becomes an identity
statement according to which melody is chosen. Convenience stores sell
chakumero books teaching users to input their own unique melody. As of July
1999, one newspaper's study showed 34.8 percent of respondents using a
chakumero melody instead of a generic incoming ringing. Although one would
expect users in their twenties would have the highest rate of chakumero usage,
research indicates that the most frequent chakumero users (47.6 percent) are in
their forties, followed by twenty-somethings at 35.9 percent. Initially, the
chakumero function played only one note at a time, but now four notes can be
played concurrently, like playing a keyboard, covering three octaves with major
and minor adjustments.
 Music download. Users can download and listen to the latest hits chart, instead
of going to the CD shop.
 Screen saver (machiuke gamen). Available in 256 colors, perhaps a pure-play
fashion/identity statement.
 Animated characters. For 100 yen per month for a character like Hello Kitty,
users can receive a different visual of the selected character every day to be
used as a screen saver (machiuke gamen).
 Greeting cards. Users can send color e-mail greeting cards to up to five people
concurrently with a color visual, such as a cup of sake and the message "Do
you want to go for a drink after work tonight?"
 Horoscope. This content has been very popular for years, predating i-Mode,
particularly among young women. Tokyo Department Store sends mail to i-
Mode users linking horoscope information to special sales.

One additional fashion statement is not limited to i-Mode; many users choose a hand
strap or handle for their kite cell phones primarily for aesthetic reasons. Form over
function may rule in some parts of pervasive computing!

Conclusion
Pervasive computing in an increasingly networked world continues to affect more and
more of the world's population. More questions than answers remain, more investment
required than profit currently available, but plenty of opportunity and revolutionary
benefits (and potential pitfalls) for everyone who participates. Although this is a
global phenomenon, regional and national social and cultural factors will directly
influence the technologies and promise of pervasive computing.
Notes
1. Appliances to Be Linked to Internet, by Jura Koncius and Maryann Haggerty,
Washington Post, January 18, 2000 ; A1
2. State of the Art: Look Out! New Wrist Devices on the Loose, by Peter H. Lewis,
The New York Times, January 20, 2000, Section G; Page 1
3. Even so, the 1999 market for Business to Consumer (B to C) electronic
commerce in Japan was 248 billion yen (US$2.36 B), or roughly four times the
64.5 billion yen of 1998, according to a survey from the Electronic Commerce
Promotion Council of Japan and Andersen Consulting covering 263 companies
running Web sites for electronic commerce. In addition, if the newly added
segment of real estate is included, the size of Japan's electronic commerce
market reached 336 billion yen. ($3.2 B) -- Japan Economic Newswire, January
19, 2000
4. NTT DoCoMo: Banished Exec Leads Way, Robert Guth, Asian Wall Street
Journal, January 23, 2000 Tech Journal
5. NTT Docomo to expand iMode Internet service to Hong Kong, Nihon Keizai,
1/26/2000, p.1 (translated by Digitized Information Inc.)
6. NTT DoCoMo: Banished Exec Leads Way, Robert Guth, Asian Wall Street
Journal, January 23, 2000 Tech Journal
7. July 22, '99 Nikkei Ryutsu News.