Category Archives: innovation

innovation

Carrier Billing and Micropayments

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According to Diffusion of Innovations theory, crypto-currencies like Bitcoin are in the early adopter phase. How might we develop technologies to bring crypto-currencies into the early majority phase, where its use becomes mainstream? Micropayments through carrier billing might be the answer.

The obvious place to start is digital services, since crypto-currency transactions are necessarily digital. Digital services will begin accepting Bitcoin or other popular crypto-currencies as payment, as acceptance grows among the general population. Most services rely on payment gateways to interface to the payment card industry, but this assumes that payment transactions are denominated in fiat currencies.

We must consider whether adoption of crypto-currency will be advanced by the payment card industry (Visa, MasterCard, American Express, Discover). PCI is extremely stodgy, being in bed with central banking and the financial services sector. This sector has their crony ties to the political establishment through regulatory agencies and the Federal Reserve. You can pretty much count them out as a trustworthy partner in any radical anti-establishment endeavor.

PayPal, Square, Stripe, and other more progressive payment processors may come around, but their ties to fiat currency and PCI may hinder them. The obvious place to begin is with crypto-currency exchanges, which can already provide conversion services between fiat and crypto. The problem with crypto has been high transaction fees, slow transaction settlement, opposition from the regulatory establishment, and lack of integration with payment systems for retail transactions.

Loyalty Networks

An unexplored opportunity is to enable digital service providers to use other forms of pseudo-currency that have low transaction fees. Whereas Bitcoin remains obscure for conducting business between ordinary people, consumers are already quite comfortable with vouchers, coupons, rewards, loyalty points, or gift cards. Pseudo-currencies suffer from a closed network of vendors (limited fungibility) and non-convertibility, but the end user doesn’t incur transaction fees, because the vendors eat the cost of operating the network to benefit from the cross-selling opportunities generated within the network. Perhaps this vector for adoption can provide crypto an acceptable way of infiltrating the mainstream economy without raising regulatory ire, since loyalty reward programs are already well-established. Adding convertibility between a loyalty pseudo-currency and crypto would provide backdoor access into retail transactions within closed loyalty networks. It’s a beach head.

The value proposition is that service providers can be given the option to join a network of vendors who accept the same pseudo-currency (as a proxy to crypto).  This allows customers who earn loyalty rewards from one vendor to spend them at another within the network. This is the same concept as how airlines, hotels, and rental car companies can join in alliances, like Star Alliance, Oneworld, or SkyTeam. The difference a pseudo-currency system would make is that it would provide the infrastructure that would allow merchants throughout the world to join together into alliances, and to create such alliances arbitrarily between themselves. This opens up this valuable capability to small and medium sized businesses, who would otherwise not be able to afford the global infrastructure such a loyalty reward system would require.

Telecom carriers are in a good position to provide a loyalty reward system for partners, who offer digital services using the carrier’s network and infrastructure.

Micro-payments

Today, content publishing platforms, such as Substack, Locals, and traditional corporate media sites, offer subscription services. The subscriber is charged on a monthly recurring basis to gain access to paywalled content. Users who follow a link to read an article must sign up for a subscription even when they only want to read a single article without being obliged to a long-term commitment.

Moreover, users are loathe to authorize many online services to take automatic payments from their payment cards, especially less well-known brands of unknown reputation and with no established relationship. Naturally, users are reluctant to provide their payment card information indiscriminately. Fraud and hacking are legitimate concerns. All of these concerns, which are critical barriers to converting clicks into revenue for content creators, can be ameliorated by offering digital services as partners with a trusted telecom carrier who can charge the subscriber through carrier billing. This would provide a better user experience to access content, and this would improve conversions to generate revenue by removing friction.

One of my friends on Facebook had this thought.

Magazines and newspapers: You know we’d be happy to pay you by the article, right? That if you offered that option instead of slamming a monthly-subscription paywall in front of us, we’d pay for a few articles a month and our micropayments would add up to the equivalent of many monthly subscribers. Maybe more than you’d lose, since those who subscribe are happy to do that and the rest of us would be posting and linking, bringing you micropayers who just navigate away from your paywall now? Yeah, just saying.

I’m guessing micro-payments are not offered today in part because payment processors charge transaction fees with some minimum that make this unprofitable, and also inputting payment card information from a customer to make a one-off micro-payment would seem like way too much work to collect a few pennies.

If we could solve the micro-payments problem for cloud services, that would open up huge opportunities throughout the digital economy. We do see hints of technology emerging to enable this, such as “super chats” in YouTube, where viewers of a live video stream can tip small amounts of money to support the presenter. But the real need is for this capability to be generalized to enable arbitrary micro-payment transactions in every context on the Internet, and for this to become prolific everywhere. The revenue opportunity is enormous — equal or larger in scale to Google’s ad revenues, as this change in paradigm is precisely the replacement for ad-based revenues. The ad model supports “free” content, but it relies on users to tolerate the clutter of ads, while also luring some users to convert ad impressions into clicks and purchases. The ad model is known to create perverse incentives for Big Tech platforms to implement algorithms that place users into information bubbles, manufacture outrage to increase engagement, and keep users occupied on the platform for longer durations (promoting addiction). Micro-payments supported content would ameliorate the harms of an ad-supported model.

Ad monetization is like a micro-payments platform. Each click is charged a few cents, and these charges are accumulated over a billing period at which point the bill is settled. Because of the threat to ad revenues, you will not see Google blaze the trail for micro-payments.

We should look to carrier billing to take advantage by solving this problem through aggregation of charges, as carriers normally do for service usage. The connection between how customers are billed and invoiced and how money flows decouples the payment flow from the buying flow. This means that the carrier acts somewhat like a “bank”, of sorts. That is, postpaid purchases are aggregated into itemized charges on a bill. The bill collects all the charges together for settlement on a monthly basis.

Unbanking

Then, look at how African carriers enable unbanking for poorer people by leveraging the subscriber’s account balance to become positive or negative (like a bank account), and to enable money transfers between subscriber accounts to facilitate financial transactions. This exact paradigm should be seen as an opportunity to expand the two features (carrier billing with account balances that work like bank accounts) to innovate in the area of enabling a micro-payments platform that revolutionizes both the online world and commerce between individuals.

What I envision is the following. What Zelle is to banking — an integration between banks to do money transfers between users via email or other methods of communicating a transaction between users — the Internet needs a general purpose “money flow” protocol that facilitates integration between web sites and entities that can facilitate money flow — be they carriers or other commercial entities that can handle the charging, billing, invoicing, and settlement functions. The key is to enable arbitrary web sites to integrate to participate in money flow (easy setup like Zelle), and for the end user interaction with these web sites to enable one-click confirmation of a micro-payment (“do you want to pay 5c to read this article?”). And of course, for these integrations to fall outside of PCI-DSS compliance; otherwise, it is not viable from an ease-of-integration and cost perspective.

Opportunity for Carriers

Whereas the imaginary killer apps for 5G (augmented reality, IoT) still have no concrete implementations yet that are compelling in the market, the revenue opportunity for carrier billing, micro-payments, and unbanking are more immediate, realistic, and obviously under-served.

This strategy is synergistic with the roll out and adoption of 5G capabilities to develop killer apps of the future. Carriers can offer to partners to host their digital services without charging for utilization of the carrier’s network and infrastructure resources. Instead, use Apple’s successful revenue model of taking a fixed percentage of the partner’s revenue from selling their digital services. With carrier billing, the carrier handles the revenue sharing and settlement, as they are adept at doing today for roaming.

Then, a network of digital service vendors would join this micropayment ecosystem. As these purchasing transactions are performed by users, the carrier records these charges. On a monthly basis, each vendor gets paid an aggregate amount from all users. It’s equivalent to an ad network micro-payment platform, except products are paid for directly, and there are no ads. People hate ads.

Using this strategy, carriers can package together their network infrastructure, their platform services, their monetization system, and their loyal customer base to offer digital (over-the-top) service providers privileged access as revenue sharing partners. By doing so, a carrier would then be able to hitch their wagon to high margin revenue opportunities created by innovative new digital services, instead of being relegated to the ever-decreasing profit-per-bit dumb pipes business.

innovation, software

Scaling operations across tenants in the cloud

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Currently, when using the tenant-per-namespace deployment model, operational management procedures are difficult to scale to many tenants, because typical actions like patching, upgrading, stopping, starting, etc. must be initiated as pipeline jobs, once per tenant, and watched for successful execution per job. This is labor intensive, error-prone (having to re-input the same input parameters per pipeline job), and tedious to manage. Therefore, scaling is different in its current form.

To enable this model to scale, tooling is required to enable a single specification of intent to serve as input into an automated workflow that performs the required action across every applicable namespace (tenant). The intended action may be as simple as `kubectl patch` or it may be a very complex job (upgrade all resources). The workflow would coordinate the parallel execution of these actions against their respective namespaces (identified either by label or a list of names), possibly throttling for limited concurrency to avoid resource contention, and reporting output for status monitoring and troubleshooting. This would reduce the operational cost and complexity of deploying patches and upgrades from O(n) to approximately O(1) for n tenants.

innovation, software

Personal Assistants

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Continuing the series on Revolutionizing the Enterprise, where we left off at Sparking the Revolution, I would like to further emphasize immediate opportunities for productive improvements, which do not need to venture into much-hyped speculative technologies like blockchain and artificial intelligence. Personal assistants fits the bill.

In the previous article, I identified communication and negotiation as skills where software agents can contribute superior capabilities to improve human productivity by offloading tedium and toil. Basic elements of this problem can be solved without applying advanced technology like AI. Machine learning can provide additional value by discerning a person’s preferences and priorities. For example, this person is always preferring to reschedule dentist appointments but never reschedules family events to accommodate work. Automating the learning of rules enables the prioritization of activities to be automated, further offloading cognitive load.

In my own work, I wish I had a personal assistant, who could shadow my every move. I want it to record my activities so I can replay them later. I want these activities to be in the most concise and compact form, not only as audio and video. For example, as I execute commands in a bash shell, I want to record the command line arguments, the inputs, and the outputs, so this textual information can be copied to technical documentation. As I point and click through a graphical user interface, I want these events to be described as instructions (e.g., input “John Doe” in the field labeled “Name” and click on the “Submit” button).

With a history of my work in this form, this information will be useful for a number of purposes.

  • Someone who pioneers a procedure will eventually need to document it for knowledge transfer. Operating procedures teach others how to accomplish the same tasks by observing how it was done.
  • Pair programming is often inconvenient due to team members being located remote from each other and separated by time zones. An activity log can enable two remote workers to collaborate more effectively.
  • Context switching between tasks is expensive in terms of organizing one’s thoughts. Remembering what a person was doing, so that they can resume later would save time and improve effectiveness.

The above would be a good starting point for a personal assistant without applying any form of AI or analytics. Then, imagine what might be possible as future enhancements. Procedures can be optimized. Bad habits can be replaced by better ones. Techniques used by more effective workers can be taught to others. Highly repeatable tasks can be automated to remove that burden from humans.

I truly believe the places to begin innovating to revolutionize the enterprise are the mundane and ordinary, which machines have the patience, discipline, and endurance to perform better than humans. More ambitious technological capabilities are good value-adds, but we should start with the basics to establish personal assistants in the enterprise as participants in ordinary work, not as esoteric tools in obscure niches.

[Image credit – Robotics and the Personal Assistant of the Future]

economics, innovation

Gigify – independent contractors

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Is there an opportunity to extend the gig economy as a business model to revolutionize every employer by converting employees into independent contractors?

We went through a period of vertical integration, where businesses bought up the partners in their supply chain to offer greater efficiency and reliable delivery. We also saw a lot of innovation toward disintermediation, cutting out the middleman. Look at Amazon as an exemplar.

This creates industry giants that are too big to resist political cronyism. That is, they win by buying legislation and regulations that hurt their competition, especially small start-ups who can’t afford compliance or who don’t want to operate like status quo incumbents. However, this also makes these giants easy targets for exploitation, as politicians are just as likely to sell out to powerful voting blocks, such as to push for labor rules or minimum wage raises or health insurance benefits.

What we should learn from Uber, AirBnB, and other gig economy digital services is that the cloud service component of their business model would be the perfect counter move to thwart regulatory enslavement schemes. The actual service providers (car drivers, property lessors, etc.) operate as independent businesses, and they don’t operate as employees. In fact, they are customers of the digital service.

We can extend this business model to its extreme. Imagine a digital service for human resource management, which provides an intermediation service between any corporation to workers who operate as independent contractors. The entire concept of employees disappears, as the HRM service provides administrative and labor procurement functions to the purchaser of labor, while simultaneously providing the administrative and labor supply functions that enable the suppliers of labor to operate as independent corporations.

Whereas the voluntary employer-employee relationship has been susceptible to regulatory interference due to the historical power of labor unions, the integrity of private contracts is sacrosanct, and will be very difficult for legislators and regulators to impair, as it will be vigorously defended and upheld in the courts.

innovation, software

Sparking the Revolution

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In my previous article, Revolutionizing the Enterprise, I provided an outlook for how emerging technologies may help to transform how we do work. Now, let’s explore how we might provide the spark that starts the fire to burn down the old and welcome the new. The world does not change in a radical way without a progression of steps that pave a path for getting from here to there. What might the first step be to spark the revolution? How do we introduce robots and AIs as personal assistants into the regular work lives of employees?

We need only look to our daily struggles to identify where every person would see the value of machine intelligence. Organizing a meeting among several participants can be challenging. You need to find a convenient time when every participant is available. You need to find a suitable venue that can accommodate everyone. If folks need to travel, the complexity rises enormously, because each traveler’s attendance is then dependent upon successfully booking travel arrangements. The risk of a single unsatisfied requirement causing the meeting to be non-viable rises with each participant and their special needs. If the meeting needs to be moved to accommodate certain participants, this would then trigger a storm of activity to renegotiate, and a flurry of activity to explore how calendars can be readjusted with a cascade of renegotiations of other appointments, each having its own priority and constraints.

This kind of negotiation among a network of people is virtually impossible to accomplish by humans among each other, because of the latency for human communications. However, if every human could be represented by an agent, who could negotiate on their behalf, this kind of activity could become painless. Imagine how many hours of phone tag, email, and travel booking could be saved. Even if an agent were not entrusted to finalize decisions on travel booking, all of the negotiation and arrangements could be prepared and presented for final approval by the human; or even involve the human at key decision points by presenting a short list of options to guide the way forward for the agent.

I believe, ordinary mundane problems such as this one, which every person has experienced, will serve as an opportunity to introduce machine intelligence to work alongside us. The off-loading of such unproductive and non-creative toil to an automated personal assistant would be a welcome change that would be seen as another useful tool, rather than a radical development. And that’s how the revolutionary should begin.

innovation, software

Revolutionizing the Enterprise

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It has been over five years since I wrote an article titled Enterprise Collaboration, in which I identified the need for innovations to transform how people do their work. Since then, we have seen no significant advances. Enterprise applications continue to move very slowly to the cloud, driven primarily by cost efficiencies with little noticeable functional improvement except at the margins (big data analytics, social, search, mobile, user experience).

Where can we go from here?

I still firmly believe that a global work force needs to be decoupled in space and time. Mobility and cloud services will continue to provide an improving platform to enable work to be performed at any time from wherever people want. We should enable people to do their work as effectively from the office as from home, in their vehicles, during air travel, at the coffee shop, or anywhere else they happen to be. Advances in computing power, miniaturization, virtual reality, alternative display and input technologies (e.g., electronic skin, heads up displays, voice recognition, brain computer interfaces, etc.), and networking will continue to provide an improving platform for inventing better ways of doing work and play. This path does not need too much imagination to foresee.

Recently, we have seen an up-tick in applying artificial intelligence. Every major company seems to be embracing AI in some form. Image recognition and natural language are areas that have been researched for decades, and they are now being employed more ubiquitously in every day applications. These technologies lower the barrier between the virtual world and the real world, where humans want to interact with machine intelligence on their own terms.

However, I believe an area where AI will provide revolutionary benefits is in decision support and autonomous decision-making. So much of what people do at work is tedium that they wish could be automated. Some forms of tedium are drudgery, such as reporting status and time to management, organizing and scheduling meetings among team members, planning work and tracking progress, and keeping people informed. These tasks are routine and time-consuming, not creative and value-producing. Machines can interact among themselves to negotiate on behalf of humans for the most mundane tasks that people don’t really care too much to be involved in. Machines can slog through an Internet full of information to gather, prune, and organize the most relevant set of facts that drive decisions. Machines can carry out tasks on their own time, freeing up humans to work on more important or interesting things.

Personal assistants as computing applications are a new phenomenon. Everyone has heard of Amazon Echo and Google Assistant by now. I can imagine advances in this capability expanding into all areas of work and personal life to help off-load tedium. As AI becomes more capable, we should see them taking over mundane tasks, like research (e.g., comparing products to offer recommendations toward a purchasing decision, comparing providers toward recommending a selection), planning, coordinating, note taking, recalling relevant information from memory, distilling large volumes of information into a concise summary, etc. Eventually, AI will even become capable enough to take over mundane decision-making tasks that a person no longer cares to make (e.g., routinely replenish supplies of consumables from the lowest priced supplier, repetitive tasks).

The other phenomenon that will revolutionize the work place even more than in the past is robotics. Robots have already revolutionized manufacturing for decades by replacing repetitive error-prone labor-intensive tasks with perfectly reproducible error-free automation. We are seeing politics influence businesses to apply robots, where human labor sufficed in the past, purely because of the increasing cost of labor. Minimum wage legislation (bans on jobs that pay less than some mandated floor in wages) that raises labor costs above the value produced will force businesses to rethink how to operate profitably. Beyond entry-level jobs, such as fast food service, self-driving cars and trucks are already in trials for ride-sharing and long haul cargo transport. As robots become more dexterous, mobile, compact, and intelligent, we will see them become personal assistants to perform physical tasks as much as we see them in software form perform computing tasks. We should anticipate that robots will serve in a broad spectrum of capacities from low-skilled drudgery to highly-skilled artisans and professions.

The future enterprise will involve a work force where humans, AIs, and robots collaborate closely. Humans have a comparative advantage in performing creative and path-finding tasks with ill-defined goals, many unknowns, and little experience to draw upon. Robots and AIs have a comparative advantage in performing repetitive, well-defined, and tedious tasks. Together, they will transform the enterprise in ways that we have never seen before.

innovation, software

cloud services for the enterprise

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This article explores how cloud services aim to be disruptive for the enterprise.

The Innovator’s Dilemma describes how the choice to sustain an incumbent technology may need to be weighed against pursuing disruptive new technologies. Nascent technologies tend to solve a desirable subset of a problem with greater efficiency. They change the game by making what used to be a costly high-end technology available as a commodity that is affordable to the masses. It turns out that high-end customers can often live without the rich capabilities of the costly solution, and they would rather save on cost. Meanwhile, with the success that the low-end solution is gaining in the market, it can invest in maturing its product to encroach into the high-end market. Eventually, the incumbent product’s market is entirely taken over by the rapidly growing upstart, who was able to establish a foothold in a larger installed base.

That is the situation we find ourselves in today with enterprise applications. Large companies rely on expensive software licenses for Customer Relationship Management, Enterprise Resource Management, and Human Capital Management applications deployed on-premise. Small and medium sized businesses may not be able to afford the same kinds of feature rich software, because not only is the software license and annual maintenance cost expensive, but commercial off the shelf software for enterprises are typically platforms that require months of after-market solution development, customization, and system integration to tailor the software to the business policies and processes specific to the enterprise. The evolution to cloud services aims to disrupt this situation.

Let us explore the ways that cloud services aim to be disruptive.

As described above, traditional enterprise software are platforms. An incumbent product that wants to evolve to cloud without disrupting its code base will merely be operating in a sustaining mode, not achieving significant gains in efficiency. Being more PaaS-like, the prohibitive cost and onerous effort of after-market solution development remains a huge barrier to entry for customers. To become SaaS-like, a cloud service must be useful by default, immediately of value to the end users of its enterprise tenants.

Cloud services are disruptive by providing improved user experiences. Of course, this means a friendlier Web user interface that is optimized for users to perform their work more easily and intuitively. User interfaces need to be responsive to device screen size, orientation, locale, and input method. Cloud services also provide advantages for enterprise collaboration by enabling the work force to be mobile. Workers need to become more decoupled in space and time, so they can be more geographically dispersed and global in reach. Cloud services should assist in transforming how employees work together, not just replacing the same old ways of doing our jobs using a Web browser instead of a desktop application. Mobile applications may even enable new ways of interacting that are not recognizable today.

Cloud services are disruptive economically. Subscription pricing replaces perpetual software licensing and annual maintenance costs along with the capital costs of hardware infrastructure, IT staffing to operate an on-premise deployment, and on-going infrastructure maintenance, upgrades, and scaling. Subscription pricing in and of itself is not transformational. It is only superficially different by virtue of amortizing the traditional cost of on-premise deployment over many recurring payments. The main benefit is in eliminating the financial risk associated with huge up-front capital expenditures in case the project fails. Migrating a traditional on-premise application into the cloud is not really financially disruptive unless it can significantly alter the costs involved. In fact, by taking on the capital cost of infrastructure and the operational cost of the deployment, the software vendor has now cannibalized its on premise application business and replaced it with a lower margin business with high upfront costs and risk—this is a terrible formula for profitability and a healthy business.

Multi-tenancy provides this disruptive benefit. Multi-tenancy enables a cloud service to support users from multiple tenants. This provides significant cost advantages over single-tenant deployments in terms of resource utilization, simplified operations, and economies of scale. Higher deployment density translates directly into higher profit, but by itself multi-tenancy provides no visible benefit to users. The disruption comes when the vendor realizes that at scale multi-tenancy enables a new tenant to be provisioned at near zero cost. This opens up the possibility of offering an entry level service to new tenants at a low price point, because the cost to the vendor is zero. Zero cost entry-level pricing is transformational by virtue of making a cloud service available to small enterprises who would never have been able to afford such capabilities in the past. This enables innovation to be done by individual or small scale entrepreneurs (start-ups), who have the most radical, risky, and unconventional, paradigm-shifting ideas.

Elastic scaling provides another disruptive benefit. It enables a cloud service to perform as required as a tenant grows from seeding a proof-of-concept demonstrator to large scale (so-called Web scale) production. The expertise, techniques, and resources needed to scale a deployment are difficult and costly to acquire. When a vendor can provide this pain-free, an enormous burden is lifted from the tenant’s shoulders.

Cloud services evolve with the times through DevOps and continuous delivery. Traditional on-premise applications tend to be upgraded rarely due to the risk and high development cost of customization, which tends to suffer from compatibility breakage. Enterprise applications are often not upgraded for years. “If it ain’t broke, don’t fix it.” Even though the software vendor may be investing heavily in feature enhancements, functional and performance improvements, and other innovations, users don’t see the benefits in a timely manner, because the enterprise cannot afford the pain of upgrading. When the vendor operates the software as a SaaS offering, upgrades can be deployed frequently and painlessly for all tenants. Users enjoy the benefit of software improvements immediately, as the cloud service stays up-to-date with the current competitive business environment.

Combining the abilities to provision a tenant to be useful immediately by default, to start at near zero cost, to scale with growth, and to evolve with the times, cloud services provide tools that can enable business agility. A business needs to be able to turn on a dime, changing what they sell and how they operate in order to stay ahead of their competitors. Cloud services are innovative and disruptive in these ways in order to enable their enterprise tenants to be innovative and disruptive.

innovation

innovation – a new definition

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innovation [noun] – context violating exaptation.

Ever since I read this tweet in 2012 by Fast Company, I have redefined innovation in this way.

Here is the first definition of exaptation from Dictionary.com.

noun, Biology
1. a process in which a feature acquires a function that was not acquired through natural selection.

By taking something or a combination of things and applying it to a purpose to which it was not intended (violating its original context), one may discover that it is well-suited to perform a different function. This discovery becomes an innovation.

innovation

Modular home construction

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I wonder if one day we will build homes like we do the space station—in prefabricated modules. Modular construction seems like it could offer incredible advantages.

Perhaps rooms can be built in standard dimensions and standard interconnections to adjacent rooms for electricity, networking, coaxial cable, HVAC, hot and cold water, natural gas, etc. Each room would be somewhat over-engineered, but this extra cost is offset by savings from the economies of scale due to mass-production. A home builder would simply assemble a chosen configuration of modules, and provide some finishing touches, such as the exterior facing, roofing, and utility hookups.

This approach would benefit from guaranteed quality of workmanship, replacing skilled labor (e.g., carpenters) with robots and 3D printing, and rapid construction. Moreover, the big innovation comes years later. As technology improves, and the homeowner wants to uptake improvements, it becomes a simple matter of replacing modules, and possibly reassembling them in a different configuration.

innovation

The future of air combat

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The F-22 Raptor and the F-35 Lightning II will form the core of America’s future fleet of fighter aircraft for air combat.

The F-22 Raptor is America’s premier air dominance fighter. 187 F-22 aircraft will replace 254 F-15C/D Eagle ($30M) eventually, although 178 F-15s will remain in service beyond 2025. In 2012, the F-22 participated in the Red Flag Alaska training exercise, where the less expensive, more agile Eurofighter Typhoon proved to be equally matched in dogfighting. [http://abcnews.go.com/blogs/headlines/2012/07/f-22-fighter-loses-79-billion-advantage-in-dogfights-report/] The Raptor costs approximately $150M to manufacture per aircraft, while the Eurofighter costs €90M ($115M). In its air dominance role, the F-22 can carry six AIM-120 AMRAAM and 480 rounds of ammunition for its M61A2 Vulcan 20mm cannon.

To complement the F-22, the F-35 Lightning II will replace the F-16, A-10, F/A-18, and AV-8B. At over $150M per aircraft, approximately 1,200 F-35 fighters will replace thousands of F-16 Fighting Falcon ($18.8M), 345 A-10 Thunderbolt II ($12M), 647 F/A-18A/B/C/D Hornet ($57M), and 175 AV-8B Harrier II ($30M).

Apparently, America’s strategy is to concentrate air power in fewer, more advanced, very costly aircraft. At $150M each, built in such low numbers, losses would be devastating. The weakness in this strategy lies in the numbers.

In such limited numbers, the F-22 will be vulnerable to being overwhelmed by a much larger opposing force, even if every one of its six AMRAAMs finds its mark. Eventually, its weapons or its fuel will be exhausted, or its supporting tankers will be destroyed in a full scale conflict with an adversary whose strategy is based on large numbers of modern, inexpensive aircraft.

It has long been understood that human pilots cannot tolerate the most extreme forces that fighters are capable of experiencing. However, we must rely on humans for the good judgment needed to make critical decisions based on principles, values, and experience.

The solution is to deploy large numbers of inexpensive unmanned combat fighters that operate in close coordination with a human piloted fighter and his wingman. Let’s call these drones swarmers in reference to the small, agile, swarming fighters from the classic video game Defender. Swarmers should operate largely autonomously toward some overall set of goals that govern the squadron. The human pilots would set these goals in the course of the mission, such as which enemy aircraft to engage.

Each swarmer would rely entirely on its programming for maneuvering and tactics. The swarmers decide collectively amongst each other how to work as a team to accomplish their immediate goals. If an enemy air-to-air missile is inbound, the immediate priority is to protect the human piloted aircraft, sacrificing a swarmer if necessary. Offensively, some swarmers can serve as bait, maneuvering to lure the enemy into a position favorable to being targeted by its peers.

This approach puts inexpensive assets into the riskiest situations, while keeping human pilots and costly assets protected. Swarmers can carry missiles, ammunition, flares, and chaff in large numbers—-mutually reinforcing through computerized coordination. This enables a small fleet of advanced fighters with highly trained pilots to increase its lethality while also greatly improving survivability.