A Window on the Future


Walk into the San Juan Island offices of Mark Anderson's Strategic News Service (SNS) and you're confronted with a panoramic view of Haro Strait, with Vancouver Island across the water. The scenic location fits one of the technology industry's favorite prognosticators.

Anderson's predictions and perspectives-which tech titans around the globe pay handsomely for-can be as crystal clear as his view.

Check out, for instance, his forecast for two Puget Sound giants: Boeing and Microsoft. The aircraft manufacturer is "dead-dead," he says. "Deader than they think. "I don't think Boeing understands Boeing's own future," Anderson says. "Boeing's future in Seattle is grimmer than Boeing's future in general. At a time when everyone is giddy over the Dreamliner, I take a bigger look. China, your No. 1 customer, has just turned into your No. 1 competitor. They've canceled orders and the internal edict from the Communist Party is 'Don't buy anymore outside guys' stuff.' That's horrible news. Russia is trying to build a whole new airframe company and in Europe, billions more in subsidies for your chief competitor."

He adds: "Don't rely on Boeing. If you're a Seattle Chamber of Commerce person, don't turn to Boeing; they aren't going to help you out."

Anderson does, however, expect great things from the next Microsoft operating system, due out this fall.

"Windows 7 will be the best-selling Microsoft product of all time," he predicts. "And Q4 will be much bigger than people think. That's a real driver of commerce for all."

Regional growth will come from wireless, biotech and the city's "retail DNA" of Nordstrom, Amazon.com, Blue Nile and others. Oh, and better civic leadership wouldn't hurt. Local leaders tend to be inoffensive and ineffective, he says. Leaders who believe in "less talk, more action," he says, include New York Mayor Michael Bloomberg, Utah Gov. Jon Huntsman, Homeland Security Secretary Janet Napolitano and former Maine Gov. Angus King.

Now consider the source, especially given Anderson's celebrated prescience. Since 1995, industry leaders and investors have forked over $595 to $895 a year for his weekly SNS newsletter with his predictions on the computer and telecommunications industries. A blue-chip roster of tech heavyweights, including Bill Gates, Mark Hurd, Michael Dell and venture capitalist John Doerr, are subscribers.

To extend the impact and influence of his newsletters, Anderson also organizes small conferences in southern California for the technology intelligentsia. Dubbed FiRe, for "Future in Review," the get-togethers attract an exclusive clientele, with attendance capped at 200, of high-level executives from world-class, tech-driven companies.

At these conferences, Anderson peels back the layers of technology's future. He probes nanotechnology, space travel, biology, medical diagnostics and other fields. His on-stage demeanor reflects his island lifestyle: easy-going but scholarly.

But Anderson's reputation stands in contrast to his humble surroundings. The Economist has called FiRe the "best technology conference in the world." Last year, noted BusinessWeek technology writer Steve Hamm named Strategic News Service "one of the most successful high-tech newsletters." The New York Times labeled Anderson "one of the technology world's more highly regarded pundits."

Larry Smarr, a computer science professor at the University of California at San Diego and director of the California Institute for Telecommunications and Information Technology (a joint program of UC San Diego and Irvine), says Anderson is someone who "lives in the future and reports back. He sees things coming, being invented before it gets to be visible to a significant portion of the population.

"We have this insane level of specialization in our culture," Smarr says. "Mark swims against that current. He's also brave. He will tell you exactly what he thinks."


The Big Picture

Anderson's ability to integrate complex subjects and forecast trends so impressed Rick LeFaivre, managing director at Kirkland, Wash.-based OVP Venture Partners, that he recruited Anderson to the VC firm as an adviser.

"Mark is a really, really good big-picture strategist," says LeFaivre. "He can see the big picture in many areas. Lots of guys are really big in their segments, their specialties. Few people step above that and see the big picture." He notes others in that category might include former Microsoft chief technologist Nathan Myhrvold, Sun Microsystems co-founder and chief scientist Bill Joy, and Stanford University futurist Paul Saffo.

In October, Anderson will bring FiRe to Seattle, including a special "sub-conference" of FiRe dubbed the CTO Design Challenge, in which technology executives will pool their problem-solving skills.

During the challenge part of the meeting, business technology chiefs first look at purely technological aspects of a problem-for example, in one recent meeting, the problem was firefighting strategies in wildfire-ravaged San Diego County. Then the participants take the discussion in a new direction and expand its reach.

"These guys are the smartest guys in the world," Anderson says. Referring to the wildfire exercise, he adds, "They came up with a stunning achievement that integrated NASA, university systems, technology and the existing firefighting structures and systems."

The specific topic of the Seattle conference, dubbed FiRe Global Challenge: West Coast, will involve computers and netbooks, telecommunications, alternative energy and smart grids, biotech and biomedicine, ocean health and eduction. Gov. Chris Gregroire and Dell CEO Michael Dell have committed to attend, as have Nobel laureate Lee Hartwell, former director of the Fred Hutchinson Cancer Research Center, and Roger Payne, founder of Ocean Alliance. Steering committee members for the event include executives from Microsoft, the state Department of Commerce, the University of Washington, Northwest venture capital firms and other regional leaders.

"Seattle is at a crossroads," Anderson says. "Seattle needs some leadership. That's part of what we want to do with this conference. There are lots of ways to create jobs in the Northwest and Seattle, but they require action and decision. Seattle can still have a great future."

Ebullient, intellectual and respected, Anderson has repeatedly staked his career on big ideas.

He keeps his fingers on the pulse of technology as president of Technology Alliance Partners, which provides trend and marketing assistance to telecommunications and technology companies. He also founded the WSA's Investment Forum (now the Fast Pitch Forum).

He claims to be among the first to predict the global liquidity collapse, on "CNN World News," back in February 2007. He says his accuracy rate of his predictions over 10 years-which his readers hold him to account for-is greater than  90 percent. He is best known for forecasts of major shifts, redesigns and events in the computing and telecom markets, such as Steve Jobs' return to Apple.

Last year, he predicted 2009 would see a boom in software for big screens and smart phones, wall computing and lightweight laptops. He's also said 2009 would see big advances in voice recognition and the integration of biology and chips.


Pattern Recognition

Where did all this envisioning come from? He was always good at science from an early age, he says. At age 8, he wrote a letter to the head of the United States space program suggesting a better way to deploy rocket fuel. That official ignored the letter and returned it, but the ideas behind it later became standard procedure. Anderson framed the hand-written letter. It hangs in his island office.

Anderson, 58, hails from Elmhurst, Ill., near Chicago. He excelled, both academically and in extra-curricular activities, at a large high school. Around age 20, he realized he was good at predicting things.

Anderson was intrigued by the scientific method, which starts with a theory, then tests that theory, using the results to refine the initial premise. "But where did the premise come from?" he asks. "The question is the hard part."

He consciously began to practice "pattern matching," a skill he honed while earning bachelor's and master's degrees in marine biology and marine biochemistry at Stanford University. Over the years, he says, he has trained his mind to ask the right "first question."

"The job that I'm doing in the newsletter is integration, a combination of pattern matching and integration," he says. "[I'm] looking for patterns that are being honored or violated and integrating the results of that across many places."

He has lived in the San Juans since discovering its "unmatched" combination of beauty and community while doing doctoral research at the University of British Columbia in Vancouver and teaching at the University of Washington's Friday Harbor Laboratories. 

Before starting his newsletter, Anderson was a technology consultant from 1989 to 1995, with clients including McCaw Cellular Communications and Aldus Corp. (now part of Adobe Systems). He has experimented with keeping an office in Seattle but now runs a mostly virtual company, whose staff includes his two sisters as his editor and program manager.

His workplace has ample space for conversation and thinking. At its center are two sofas, a globe and tripod-mounted binoculars for whale watching. A large flat-screen TV rests on top of a cast-iron wood stove, which is fronted by an array of consumer electronics gadgets-phones, remotes and other mobile devices.

From this setting, Anderson thinks big. In addition to newsletters and conferences, he chairs SNS Project Inkwell, a computers-in-education initiative. It aims to be a standards body for computing platforms in K-12 classrooms and advocates for every child to have a computer. Microsoft, AMD, Gateway, SanDisk, Intel and others have backed the project.

San Juan Islanders know him best for creating the Whale Museum in Friday Harbor and for founding the Orca Relief Citizen's Alliance, a group that urges tighter restrictions on popular whale watching boats.

"The boats cause the whales to lose sonar ability and they starve," he says. "The boats increase their [the whales'] requirements for food at a time when there are fewer fish, and their starvation accelerates."

Near his sea-view office, Anderson makes his home on a lush, inner-island farm where he raises sheep and blueberries. He zips around the island in a silver BMW M Roadster convertible.

Anderson talks exuberantly about theoretical physics, marine biology, chip sales in Japan and European heads of state. When pressed, he touches on more personal topics such as music and local artists. But he speaks most emphatically about the whale watching industry. "We are going to do something about it," he says. That's his prediction.


Remote Control Arrives

Remote Control Arrives

The smart home of 'The Jetsons' still isn’t ubiquitous, but the door is opening wider (after being unlocked by a smartphone from miles away).
When Bill Gates visited the Seattle World’s Fair as a 6-year-old in 1962, he claims to have visited every pavilion. At the General Electric Living pavilion, he would have seen a vision of a digitized residence, with home computers, electronic libraries and television programming projected on the interior walls.
Fifty-four years later, most of us are still awaiting the arrival of the “smart home” — a place where audio, video, lighting, temperature, window coverings and other features can be centrally controlled or, even better, remotely controlled through a portable device.  There are signs, however, that the smart home market may finally take off, driven by the ubiquity of enabling technologies like Wi-Fi, voice recognition and smartphones. 
According to the Consumer Technology Association, smart home technologies are in place in only 6.4 percent of homes nationwide today but are expected to reach 15.5 percent by 2021. Revenue from smart home technologies is expected to grow by more than 25 percent each year, reaching more than $32 billion in 2021.
IoT Analytics, a market analysis firm, identifies four primary drivers behind the growing smart- home market.
• Energy savings: more efficient use of lighting, heating and cooling through scheduling and sensing the presence of occupants.
• Convenience: centralized control of disparate services.
• Safety and security: Smart door locks, integrated video and motion detectors.
• Social status: Increasing adoption of the latest technologies by Generation Y as they purchase homes.  
Silicon Valley is the acknowledged hotbed for smart home device development, but the Seattle region is quickly positioning itself as a leader in smart home technologies, especially for the development of operating systems that control the devices.  
Microsoft and Amazon are clearly intent on becoming leaders in the sector.
Amazon has been integrating its voice-controlled Echo and Echo Dot devices with a growing array of smart home products to control lighting, thermostats and other home systems. In September, South Korea’s LG Electronics announced that it was partnering with Amazon to integrate its SmartThinQ hub, a device used to connect home appliances over the internet, to work with Echo. Ford Motor Co. said in early October that Echo will be integrated into three of its models — the Focus Electric, Fusion Energi and C-Max Energi — by the end of the year, allowing owners to do such things as adjust the heat in their homes from their cars.  
Microsoft is reportedly positioning Windows 10 and Cortana, its voice-activated digital assistant, to be a controller of smart home devices. At a developer’s conference last April, the company announced that it would release protocols in 2017 to allow Windows 10 to work with a wide range of devices and applications allowing users to automate tasks using a PC, a mobile device or an Xbox console. According to the announcement, users will be able to control lights, air conditioning and door locks.  
Other companies see opportunities here, too. The Los Angeles-based computer peripherals company Belkin recently moved its R&D office to Seattle, specifically to develop smart home technologies. Belkin’s move, not coincidentally, took place after the company bought Seattle-based Zensi in 2010. Zensi, which was founded by University of Washington Professor Shwetak Patel, focused on energy and water monitoring in the home. At the same time, Patel become Belkin’s chief scientist.
“We moved all of R&D to Seattle so it is convenient to the University of Washington,” says Patel, pointing out that the resources of the university and tech companies such as Microsoft and Amazon give the region a huge pool of talent for developing hardware, software and machine learning. “It’s just a better fit.”
Derek Richardson, cofounder and CEO of Deako, a Seattle-based manufacturer of smart lighting systems, also established his company in Seattle to gain access to that talent pool. “It’s a tech city,” he says, adding that the mountains and beautiful lakes are a draw, too. “The venture community is growing here, and there are so many successful companies — Amazon, Starbucks, Boeing, and the list goes on and on. It’s a great way to attract talent.”
Still, for all the media coverage of smart home technologies during the past half century, the pace of actually integrating those technologies into homes has been slower than some expected. For one thing, while the early generations of smart home technologies were fine for tech-savvy early adopters, they were not user-friendly enough for the average consumer. “How do you get the technology to the average person’s home, and how do you reduce the installation barrier?” asks Patel. “That is one of the big challenges the industry is facing right now.” 
Aaron Crandall, associate professor of electrical engineering and computer science at Washington State University, says that for all the advances in technology, expectations have always outpaced reality. About a year and half ago, Crandall and a student licensed technology they had developed for a “smart home in a box” — a system of sensors that detect movement, temperature, doors opening and closing — designed to help caregivers for the elderly, and launched a company to develop and market it.  “We did about a year of pushing the boulder up the hill trying to get it funded,” says Crandall. “It didn’t come together in the soup that needs to make a startup go.”
Crandall says the market was not yet ripe for the technology. “The technologies are still there.  It will happen,” he says. “It’s just a question of who is going to make it happen.”
Aaron Crandall, associate professor of electircal engineering and computer science at Washington State University, holds a small computer WSU researchers use as the "local brains" in their smart homes. The device collects sensor data and sends the information to WSU's main database for full processing later. Crandall and his team see a future in such devices for the elderly and their caregivers.
The market is being primed by specialized businesses taking on the tough and often costly job of integrating technologies to easily control lights, alarms and doorbells. Consumers and builders looking to integrate smart home technologies are turning to specialized system integrators.
Digital Home Northwest was launched by Jeffrey Thoren and his wife, Heather, in 2006 after they went through the experience of retrofitting their new home with smart lighting. “We honed a technique after doing a couple of remodels on our own house,” he says. 
Most of Digital Home Northwest’s work is retrofitting existing buildings. The consensus among builders has been that they don’t want to spend the money wiring houses for smart devices without knowing if the buyer will want them. But Thoren is trying to push builders to add wires that will later make it easier to install smart home systems. 
“If you’re going to build something for a client in a high-tech city, you should be thinking about pre-wiring,” he says. “Adding a couple thousand dollars of wiring and just leaving it in the walls so it can be used really makes sense.”
While Wi-Fi capability has become standard in the home, video cameras and motion detectors for security can easily eat up the bandwidth available.
“It’s a bucket,” Thoren says of the basic wireless router, “and the more devices that drink out of the bucket, the less water you have.”
Craig Abplanalp, president of Definitive Audio in Bellevue, says he sees increasing demand for smart home technologies. His company has broadened its expertise from audio and video to include systems for controlling operations such as lighting, motorized window coverings, air conditioning and heating. Abplanalp says the company’s work is split between new construction and retrofits.
“Right now, there is a lot of new construction,” he observes, “but Seattle is somewhat landlocked [in terms of available land for new construction], so there is also a lot of retrofitting. A lot of the residential work is in a home that in many cases is being torn down to the studs. It’s really a rebuild.”
Abplanalp senses a big shift from the early days of the movement toward smart homes.
“All of the pioneers in new technology use their early adopters as beta testers,” he says. “A lot of the products were really not ready for mass consumption.”
He says that dynamic is changing. Where Definitive Audio’s specialists used to have to do a lot of custom programming to get systems to play nicely together, there are now free vendor apps that handle the tasks. “What the average person will pay for programming is an ever-declining amount,” Abplanalp asserts.
Digital Home Northwest's system for a connected home incorporates smartphone linkage (1) to a door station keypad (2), a 10-inch touch screen (3) controlling audio, video, climate and security camera (4). The screen also monitors musical entertainment (5).
Industry insiders say that two emerging trends — standardization and modular design — are going to push smart home technologies to adoption by broader markets.  
Deako, for example, designed its lighting system to work on standard house wiring, with communications between switches and the user control — a smartphone — taking place via Bluetooth. “Our technology can work in any home as long as it has modern wiring,” says Richardson.  
What’s more, the Deako switches are modular, with all the “smartness” contained in the switch. A builder can install either dumb switches or smart switches in the Deako receptacle. This allows the builder, with minimal investment, to give the homebuyer the choice of upgrading to smart lighting.
Just as important, says Patel, is the move toward standardization, which makes it easier for consumers to get devices to work with each other. “There are so many systems out there now and it’s hard to know which one to start with, and they don’t all interoperate,” says Patel. “Consumers are overwhelmed.”
Patel expects “a lot more cooperation among companies in the industry to make their stuff more compatible.” He points to a recent collaboration between Amazon and Sonos, a maker of high-end wireless speakers, as an example.
Patel says that one more thing is needed: “a killer user experience.” He says devices that let parents know when their kids get home or that remotely lock and unlock doors are the kinds of emerging technologies that will open broader consumer markets.
“You have to get people hooked and get them thinking about what the real convenience factor is,” Patel asserts. “I think we’re just getting to that point.” 
Heather and Jeff Thoren own Digital Home Northwest in Federal Way.
Crandall believes one killer application may already have been created. It’s just that consumers aren’t quite ready for it. Internet-connected smart home sensors and smartphone apps are ideal, he says, for monitoring the health of elderly people and helping them stay in their homes longer, rather than having to move into assisted living or nursing facilities.
“But those people who are 70-plus right now own almost no smartphones,” Crandall says, adding that they also often don’t have internet connections in their homes.
The demographics, however, are changing. “The largest age group in the United States by about 2030 will be 65-plus,” Crandall says. “We do not have the nurses and physicians to do classic senior care, so we need tools to keep people in their homes longer.”
Since the next generation of seniors is more familiar with smartphones, Crandall expects smart home technology, especially as applied to elder care, to finally come into its own.