The new little server

I am presently in Canada, attending the latest TTI Vanguard meeting on technology trends. We’re exploring how pervasive communications technologies will change art, influence science, and innovate business.

Yesterday, there was a particularly epochal presentation. We’re running under Chatham House Rules here, so I won’t disclose who was presenting, but the basic point was that the mobile phone will become a personal server in the immediate future.

We are all familiar with the phone as communications device, and are becoming more familiar with it as file storage and music repository. But at the moment, the phone is subordinate to our other devices, such as laptops. The short step in front of us is the reversal of that arrangement.

That’s going to change the value of my phone compared to my wallet. let’s face it, apart from ID and cash, the wallet is really just a place for a bank to live. IDs are just data anyway, and cash is in decline. NFC is just around the corner.

It is likely that when I have a little personal server in my pocket, I am going to ditch my wallet.

What evidence is there that personal servers are about to happen?

Firstly, while the phone itself doesn’t give you an especially good experience (mainly because it has a small screen and microscopic keyboard), the environments around us are increasingly populated with screens and keyboards. They are pervasive.  All that’s necessary is that the phone can reach out and use these devices to provide a decent user experience. Conveniently, most phones have Bluetooth now, so the hardware exists. Singapore airlines now provide screens and keyboards in seat backs on some flights.

Secondly, it is possible to run server processes on phones without actually degrading the performance of the voice function. During the presentation, a linux handset -bought over the counter – was used live. It was running a media server, a file server, a web server,  and a frame buffer server all on unmodified hardware.  The latter means that the phone can write to a separate screen over a bluetooth connection.

Thirdly, both the processor and the battery life of current generation devices are capable of doing interesting things.  Here’s an interesting statistic: a typical phone can stream 4 hours of media to an associated screen at high frame rates. Intel is planning to put ultra low power PC class processors in mobile phone devices any time now. So you can then run Office and all your other apps that you presently rely on.

Finally, device storage is almost at a magic number: 10gb per square inch. That’s the number, apparently, at which the amount of storage becomes interesting for most human applications (media, for example). Incidentally, recording audio for the entire life of one individual would take 3 terabytes of storage. Technology is not so far from that density in a mobile phone form factor.

So the world view being advanced here is that your digital life is your handset, which will make use of other devices it finds in its environment to provide a desktop class experience. Everything subordinate to the handset.

I think that most people would agree with me when I say that – today – if I had to choose between losing my wallet and my phone, I will choose to lose the phone every time. The level of inconvenience and risk involved in losing my wallet is considerable. I will be without my cards, without cash, and without ID.  My life, to a large degree, stops.

But when my phone becomes a server with all my data, that immediately reverses. I would much rather lose my wallet in that case. The wallet, despite the inconvenience, is replaceable. But the data on the phone doesn’t represent just the financial slice of my life, it is everything about my life. With a built in data manipulation engine just waiting to be used.

Commentators, such as the prolific David Birch, have been discussing the migration of the wallet to the handset for ages. The fact of the matter, however, is that a personal server offers synergies rather more significant than the move of payment functionality from plastic. It co-locates bank functionality with the rest of my digital life.

Now I won’t pretend to have thought through all the implications of that, but it is a very, very significant shift. It will change the way that banks activate their customers. And it will certainly change the way that customers choose to interact with banks.

7 Responses to“The new little server”

  1. Adam
    April 30, 2008 at 5:18 pm #

    How will this impact the phone-as-a-money-storage medium in the context of the unbanked in the third world?

  2. May 1, 2008 at 9:32 am #

    Gosh, I am not certain. I’d imagine there would be two areas of inplications, though. the first would be security: all those servers running on your phone might present a nice inviting target if there is real money there. The second would be functionality: I’d expect you could do a rather richer money experience with the richer UI you’d get in this model.
    Does anyone else have thoughts on this?

  3. Simon Thompson
    May 1, 2008 at 3:11 pm #

    I guess that this depends on the risk of carrying data with you when you could be mugged or other wise suffer trauma vs. the utility of having it with you and the opportunity cost of it being in your pocket and not else where. Portable data is sleeping data?
    Is the balance of phone data connectivity different from desktop connectivity? I think that phones might become little data dewponds that collect the data and information you gather during the day, but when you come into your highband wireless network I think that they’ll drain off into the server infrastructure, and get cleaned and refreshed with new data goodness at the same time.

  4. May 2, 2008 at 12:04 pm #

    I think the way to think of it is that the phone will be a kind of secure gateway, managing access to your data (not all of which will be on the phone). Phones are coming from a different place than desktops: more secure (because of the SIM), more controlled.
    I’m doing a little experiment on this at the moment, by setting up some Twitter channels (the open one is under “dgwbirch”) and then posting to them from my phone from time to time, just to see what kind of information (other than location, which is already “served” by the phone) might be useful in different contexts, but it’s reasonable to suspect that identity-based information (reputation, credentials) might be at the heart of some future trends here.
    I always enjoy the Vanguard events, thanks for the window into the discussion.

  5. May 3, 2008 at 2:16 pm #

    Interesting article but there’s no new thinking here.
    Firstly, I don’t see any requirement for the phone to become a server in order to become a secure wallet and ID.
    Secondly wouldn’t a low powered TV transmitter in a phone interface with more of the screens around us than bluetooth? TV screens are the biggest and best and the TV transmitter chip is cheaper than those required to power a useful server. TV is what I watch my movies on. I’ve been able to stream from my 8gig Nokia through my desktop to my TV for ages and I also use my mobile as the TV remote control.
    There are certainly many issues with the systems mentioned in this article. Hackers, viruses, telco employees, bank employees, MITM, MITB, the attacks are endless.There are branding and support issues.
    “Letting carriers take over is “the model that has to work,” he said, because they are the point of contact when consumers have problems, and the carriers would rather focus on a single application that supports many financial companies than deal with many individualized ones.”-
    OK the customers are going to have problems. They must mean software problems, like virus’s, trojans, MITM, MITB, no or poor network data reception, phone data cost overcharging, and other ‘problems’.
    Who deals with the problems?
    Example: you log on the and your account balance is unexpectedly zero, who do you call the Telco or the Bank?
    Are you covered? – Who covers you?
    What if the Telco blames the bank or the customer and the bank blames the telco or the customer?
    Does the customer get the opportunity to be serviced by both the Telco and the Bank’s offshore call centres?
    As a bank I’d be wondering-
    Wouldn’t the telco’s carry the risk if they were the ones providing both the application software and the connectivity to the bank?
    Who would be responsible for the data loss and notification in the event a a breach?
    The bank could only assume that each transaction was a genuine one.
    The lack of distinctive branding wouldn’t be an issue would it? I’d ask marketing first.
    Why not outsource the complete bank customer service function to the Telco’s overseas call centre?
    Couldn’t we just let the Telco’s do it all for us?
    –These issues are fatal.
    Dave is on the money.
    The phone is becoming the ID, wallet etc, but of course the money won’t ever actually be in the phone. Governments want it and citizens need it.
    ID authentication, micro-transactions, credit/debit and information exchange and sharing can all be through your mobile.
    Privacy, no hackers, no ID theft, no fraud, no wallet.
    It certainly can be more secure than any other method if done properly.
    Ubiquity is the key.
    We’ll have you doing it all within a year.

  6. May 8, 2008 at 1:50 am #

    This is an interesting discussion – which perks my interest as a web developer. It surely appears that this is a very powerful breakthrough, except for the fact that phones are connected to the internet.
    I propose that the information you describe as being accessed by a server on your phone is actually stored on real servers somewhere out in the wires of cyberspace and your phone only gives you constant access to it, just as going to any computer would as well.
    And for the phone wallet perhaps your phone keeps a profile of each of your credit account and after a wireless handshake with the store’s checkout counter, you are prompted for a pin (maybe voice pin?) then the store takes on the responsibility to contact the payment providers gateway, and gets a return that the transaction is approved.
    I do agree with the idea of around an ID thats not a credit card in its current form. It maybe a phone, a finger print, or a microchip embedded in your elbow, 🙂 that was a joke… sort of.

  7. May 8, 2008 at 8:21 am #

    Certainly a set of insightful thoughts, but let me just clarify one point: If the phone is a personal server, then why do I need all my date in the cloud – including my financial data? The cloud for backup, certainly, but do I *really* trust an unnamed cloud operator with everything?
    As to money on the device, well, I agree with that. e-cash solutions haven’t been all that sucessful. I don’t think anyone is really suggesting that, actually. The magstripe on a card doesn’t have money on it either – it is a token that refers to the real money on a computer somewhere else. Think that’s the model that would be present in this case too.

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