The Second Wave of Innovation for the Internet

Watch the 8-minute video here or on YouTube, or read the transcript below.

Transcript

Julia Janssen-Holldiek: Rafael Laguna, many thanks for spending time with me today. I would like to talk to you about evolving technologies and what it requires for them to be successful. Now, historically, the Internet has been open, federated and permissionless. Do you think those principles will continue into the future as the Internet further evolves? 

Rafael Laguna: The Internet has certainly created a disruption and huge markets and a change in our lives. So it has become very disruptive innovation which we all enjoy in many ways. But it also – funnily enough, on this open platform – created a lot of monopolies that now control the way the Internet is operating. And they are trying to lock it down, basically. If you look carefully at the steps that some of these giants are taking, it is making it very private to them. And Facebook almost runs their own Internet, because all the content is not accessible from the outside. So anyway, we see a lock-down. But if you look at technology, when new technologies come to market, you see that a lot – that single companies take control for a while, but then that gets disrupted again because it’s against the free market. It’s also not very innovative after a while, because you’re competing against everybody else. So bringing back the principles of openness and taking away the platform control will create a second wave of innovation for the Internet and free the markets again.

Janssen-Holldiek: How do you think innovation should be approached in a way that protects those principles?

Laguna: Well, I guess by incorporating these principles. We’re discussing, for example, a lot how data sovereignty can be accomplished. How we can get back control over our data, how governments can take back control – actually do their jobs, both by being a sovereign government, by enforcing laws like GDPR that we’ve got. 

The only way to do that, the only way to build trustable services is to make them open and federated. And once they are, everybody can participate in building them. Everybody can provide a service. I mean, the whole Internet industry, all the hosting companies and telcos, and Internet service providers, they can just simply participate and offer their services. Now, if this second wave of the Internet comes that I’ve been describing before, I think we’ll create this opportunity for everybody to participate in this innovation.

Janssen-Holldiek: I once heard you made a comparison between “Hotel California” and certain Internet services. What’s that about?

Laguna: Well, it’s about the old Eagles song - those of us that are old enough to remember – you know, “The dark desert highway, cool wind in my hair...” describes a very comfortable place, and you sort of drink your margaritas and you feel happy, but once you feel like it’s time to leave, you can check out, but you cannot leave. It’s really about drugs, of course, right, you’re taking drugs and feeling great, but after a while it wears down and then suddenly you have to take them again and again. You can’t leave. And a lot of the Internet services are that way. Like for example, we all use maybe WhatsApp or more so. And you go in and you can communicate with everyone and then you read some bad things about it and then you leave and you feel very alone suddenly, because your whole network is left behind and you can’t take it with you. So you’re going back to your place. And that’s what, you know, drug addicts do as well. And this is what the Eagle’s song is about.

Janssen-Holldiek: Europe is actually widely thought to be falling behind in innovation and digital technology such as AI. So why, do you think, is it, and what needs to be done for Europe to catch up?

Laguna: It’s kind of funny that we’ve missed the boat on many of the disruptive innovations past the Second World War almost, when you think of it. You know, I once said that the last big disruptive innovation that we monetized in Germany – or maybe even in Europe – was the car. But it’s 120 years old. And it’s kind of wearing down now. But still, 20 percent of our economy comes from the car industry. And all the new innovations like smartphone, Internet didn’t happen here. And the monetization didn’t happen here.

I mean, one of the Internet giants in the US is as expensive on the stock exchange as all of the DAX 30 companies combined. And all of the five combined in the US are more expensive than all of the big companies in Europe combined. So in a way, we see that we’ve kind of missed the boat on that one. 

Why that is, is hard to say. I don’t think there’s a simple answer, but what you can say is that a lot of the research that we’re doing – and we’re doing a lot of research, and we’re doing very good research – that there seems to be missing a piece that translates that into economic success. So this is why I’m founding the agency to foster this translation from science and great inventions into economic success.

Janssen-Holldiek: Also, there has been initiated a project to help Europe to regain sovereignty over its data and innovative potential – the GAIA-X. Can you tell us something about its objectives and the value for innovation and technologies like AI, for example?

Laguna: I think it came from the AI side and maybe also industrial IT or Internet of Things. I think it should be expanded and probably will be into something that covers more or less all digital services - the whole digitization of the industry, of our lives. It is about defining how Europe should go about this. 

Data is the requirement for doing AI. If you don’t have data, if you don’t have access to data, or if all the data sits with companies outside of the country, outside of Europe, we’re not going to be able to participate. So we have to break down these walls. We have to create open, federated, permissionless systems that allow us to network between the companies and create this huge data lake that everybody can use to create new services.

But it’s not only that. It’s also simple infrastructure services, platform services need to be transparent in a way such that people can choose their supplier, that they can become their own supplier, that new suppliers can come to market to compete with everyone else. So first of all, we have to open up the market again. I think GAIA-X will be taking these steps to foster this opening and to create standards that the industry can then use to compete and free the marketplace again.

Janssen-Holldiek: Sounds a bit like unleashing the power of cooperation.

Laguna: Yes, indeed. I mean, it’s what science did so powerfully. I mean, all our wealth was created in the Enlightenment phase when we invented science in the 1700s. This was an invention. We said: OK, we’re going to do science. And then we publish everything that we’ve done, including the data that we’ve used and the materials that we’ve used for everybody to shoot holes into it and to falsify or to improve it and invent something new. So this is pretty much what open source does, isn’t it? Thus you’re creating this scientific approach to creating digital systems and that should work well.

Janssen-Holldiek: Mat Velosso, Technical Consultant for the CEO of Microsoft, has been quoted as saying that the way to tell the difference between AI and machine learning is: if it’s written in Python, it’s probably machine learning. If it’s written in PowerPoint, it’s most likely AI. Do you agree?

Laguna: Yes. I didn’t know it was a Microsoft person saying it, but that’s fantastic. It’s a great quote. I totally agree. There is a lot of hype around AI and a lot of fake AI companies also, because it’s easier to get money. But of course, there are some serious AI also.

Janssen-Holldiek: So, Rafael, what’s your call to the industry?

Laguna: Well, embrace the open approach, embrace openness, create open, federated, permissionless systems and cooperate with everybody else. You know, free this market.

Janssen-Holldiek: Many thanks, Rafael Laguna for talking to us today.

Laguna: Pleasure. Thank you.

Co-founder and CEO of Open-Xchange, Rafael Laguna has been building and growing software companies for over 25 years. Rafael is a long-time advocate and campaigner for open-source software and the open web and has repeatedly proven that open approaches can produce profitable, high-grade commercial software without compromising user privacy or safety. Since its launch in 2005, Open-Xchange has partnered with many of the largest providers in the world in order to deliver email and productivity solutions, including secure storage, file and document management, and best-in-class IMAP and DNS management.

Julia Janssen-Holldiek became part of the CSA team in 2014 and Director in 2017, and is passionate about creating and enabling quality standards for commercial emailing. Prior to the CSA she worked for several years in Marketing and Sales at Dell. Julia studied business administration at the University of Cologne and the Universidad Torcuato di Tella, Buenos Aires.