How would you assess the speed of change on the technology front? Are things accelerating, or leveling off?
That's a good question. In the late 90s you had everyone driving to the Web, which was a really big thing, and it was obviously transformational. At Fidelity today 97% of our trades take place online, and 90% of customer interactions. So it really was quite profound, and something that really changes the entire way services are delivered doesn't come along every day.
Having said that, now there is more than one thing and they're each pretty big. Mobile is huge. Social is huge. Cloud is big. Big data is big. Artificial intelligence I think will be big. So in some ways there's more breadth, and we don't feel any of those areas can be ignored. So it's not like in the late 90s when everyone did a massive student body left out to the Web. Here it's like — What's your mobile strategy? What's your social strategy? What's your cloud strategy? What's your big data strategy, etc? So there's a dynamicism today, and almost a complexity, because some of them are not discrete.
In other words, mobile gets better and better because services in it are cloud-enabled and socially complemented. So they're discrete in one hand but they're also converging. So I think it's a little bit more complicated than it used to be and I think that makes people feel like the pace of change is faster because there's so many different things happening.
There are some mathematical underpinnings to why progress is faster. I just finished Andy McAfee's book "The Second Machine Age." If you think about Moore's Law calling for capacities doubling every two years, it went X to 2x to 4x to 8x, 16x. But now one doubling can actually have as much performance improvement as all that has preceded it.
And similarly, look at how many people are involved in innovation these days. In the early 90s if you wanted to do a startup you had to raise a lot of money, buy servers, have a physical location to put those servers, buy a sales force, do expensive brand building. Now if you have a great idea and a credit card you can be on Amazon in 10 minutes. You can have an app store as your distributor in 15 minutes. You can have social media as your amplifier. None of those things existed.
So it is easier for startups to come out of nowhere, which I think also drives people to feel the pace of change is a lot quicker because the barriers to entry are much lower. They're much lower capital-wise, they're much lower distribution-wise, and I think people haven't really fully absorbed that yet.