Computing capacity and sensing capabilities - contributed

Build a global telecommunications system with almost no capital equipment? Make free, high quality video calls anywhere in the world? Both once were unfathomable. But that’s what Skype has done, thanks to a contribution system.

Founded by Swedes and engineered in Estonia, Skype is the marquee example of how a company can reduce the cost of capital equipment to almost nothing by having users contribute the capital goods. Skype’s free software utilizes idle computing power on users’ PCs to manage the calls – as many as 12 million simultaneously – for its 300 million customers. Its costs are so low that the company, which was acquired by eBay in 2006, can deliver high-quality voice and video computer-to-computer calls between subscribers at no charge. And it’s profitable: revenue comes from calls made by Skype users to mobile phones and landlines, as well as from services such as voice mail.

Traditional companies, too, get customers to contribute needed capital. In Japan, Honda captures real-time traffic data from GPS systems that Honda owners buy from the company. Speed and location reports from each vehicle contribute to a data stream that Honda aggregates with other traffic data to provide information on traffic jams and other conditions to Honda drivers who subscribe to the company’s InterNavi service. In the US a startup named Dash similarly collects vehicle data from GPS units to give drivers real time traffic and fastest route information.  Users benefit from enhanced traffic updates; the company can offer a superior subscription service without having to pay for the capital infrastructure. Here is Honda's summary of results through mid-2007 (translated by machine).

And there’s more: Honda drivers also contribute reviews of local businesses and points of interest that other drivers can read from their InterNavi-equipped Hondas – an automotive version of a Zagat guide. Honda’s system thus combines three user contributions – capital equipment, data about user location and vehicle speed, and reviews.

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