The Magazine For Reseach and Innofation (Fall 2001)

s
Fall 2001
Pictures of the Future

T H E M A G A Z I N E F O R R E S E A R C H A N D I N N O V A T I O N
MEDICINE CO M M U N I C AT I O N S E-BUSINESS
Tomorrows Operating Rooms Agents, Bots and Avatars Paying in Bits and Bytes
PICTURES OF THE FUTURE
Editorial
Contents
A look into our future
Prof. Edward G. Krubasik, Member of the Managing Board of Siemens AG, has special responsibilities for Corporate Technology as well as for various Groups in the Transportation and Automation and Control business segments.
The global electrical and electronics market is growing at a rate of between seven and eight percent each year, making it the world's most dynamic largescale industry. It is an industry characterized by constant technological and structural transformation. The pace of progress in microelectronics and software development remains high, and product and system cycles are becoming ever shorter. New products and services, price pressures, globalization, more customer focus and e-business these are the challenges we now face. There is no doubt that we are entering a new age described by some as the fifth Kondratieff cycle in which information and communications will reshape all areas of life and enhance the significance of services, knowledge and expertise in the creation of value. But what's the best path into the future? Which new technologies and business concepts should companies employ to meet the demands of tomorrows customers? These are exciting questions, and the ability to provide the correct answers will determine who will prosper in this new age. Innovation management, a strategy for inventing the future, is becoming practically indispensable. At Siemens, one of the worlds leading electrical and electronics companies, Corporate Technology and the Groups have developed a new procedure called Pictures of the Future for implementing such a strategy. Pictures of the Future are sophisticated studies presenting Siemens technological visions for five key corporate areas: information and communications, automation, energy, transport, and healthcare. These studies, which are continuously updated, are used to derive information on market potential, technological trends and new business opportunities. They can also lead to the development of new ways of working and identify the technological breakthroughs that will enable us to achieve our goals. Our Pictures of the Future magazine also marks a new approach. By leading off with scenarios of the future and building on these with profound articles, we want to provide our readers with comprehensive and expert insight into current research and development activities at our company. Each issue will focus on a few specific themes that will be presented from the perspective of both Siemens researchers and developers and the users of evolving technologies. International developments will also be reviewed. Our goal is to provide you with a look into a future that all of us will create together. What could be more exciting than that?

A process to help shape tomorrows world
Introduction
4 6
Pictures of the Future: Technological trends in key business segments
HEALTHCARE
Tomorrows Operating Room

14 17 22 28 31
Scenario 2015: The Cutting Edge Siemens Developments: The Transparent Patient Interviews with Experts: Augmented Reality and Robot Technology Hand in Hand (MITI, Munich) In Brief
E-BUSINESS
The Electronic Future of Money

34 37 40 44 47
Scenario 2010: Digital Money Paying in Bits and Bytes International Activities: The Long Road to ldorado Siemens Developments: Paying with Your Fingertips Interview with the German Bundesbanks Hans Bauer In Brief
COMMUNICATIONS
Agents, Bots and Avatars

50 53 58 59
Scenario 2015: Special Agents of the Future Siemens Developments: Invisible Helpers International Activities: Creating the Right Environment for Agents In Brief

R&D Cooperation / Speech Recognition Start-ups / If the Heart Could Speak Patents and Researchers Facts and Figures Feedback / Preview
Features
32 48 60 62 64 66
Global Network of Innovation / User Interface Design
Pictures of the Future | Fall 2001
Introduction
The pronouncements of the Delphic Oracle often led people astray. In contrast, the Siemens Pictures of the Future method shows a clearly structured path toward the future.
Recognizing which innovations have high growth potential, identifying key technological breakthroughs, anticipating future customer requirements, spotting new business opportunities Siemens is systematically doing all of these things in its quest to invent the future.
Pictures of the Future

The ancient oracles and soothsayers had an easy time of it down through the ages. All they had to do was formulate their prophecies vaguely and all kinds of interpretations became possible. But the obscure omens of a Delphic Oracle or cryptic predictions la Nostradamus arent much use to todays corporate leaders, who require reliable forecasts regarding future business trends. In an increasingly complex business environment marked by ever-shorter product cycles, the major challenge facing companies is how to organize R&D activities in as focused a manner as possible while making optimum use of available funds. All of this requires a clear vision regarding new technologies, customer requirements and the markets that will emerge in the years and decades to come. But a leading global player like Siemens cannot be satisfied with merely attempting to forecast new trends. As Siemens CEO Dr. Heinrich v. Pierer once said, Predicting the future works best when you create and shape it yourself. And thats why the motto Inventing the Future best describes Sie-
tion is also its biggest weakness, since the method fails to predict discontinuities and great leaps forward in the development process. Figuratively speaking, while roadmapping will take you on a journey along a well-built road, you wont see much of whats going on beyond the roadside. And you can never be sure that the road isnt about to end suddenly, in which case it would have been better to turn off many miles before. However, with the use of a complementary approach, known as the scenario technique, such matters can be judged with more certainty. What Siemens calls retropolation involves imaginatively placing yourself some 10, 20 or even 30 years or more into the future. The time-scale depends on the
the known facts of the future scenario. In this way, it is possible to identify the kinds of challenges and problems that need to be overcome to get there. By combining extrapolation and retropolation and bringing these two approaches into harmony with one another Siemens engineers can draw up Pictures of the Future revealing which changes will impact the companys different areas of activity. However, the purpose of these pictures is not merely to depict visions of the future; as part of a systematic, ongoing process at the company, they also help quantify future markets, detect discontinuities, anticipate forthcoming customer requirements, and identify new technologies with large growth potential and
A process to help shape tomorrows world
Planning for the Future the Siemens Way

by combining extrapolation and retropolation
STRATEGIC VISIONING SCENARIOS FOR THE BUSINESS SEGMENTS Medical Information & Communications Transportation New markets New customer requirements New technologies New business opportunities Automation & Control Power INFLUENTIAL FACTORS Individuals Society Politics Economy Environment Technology Customers Competitors
Extrapolation
CURRENT BUSINESS via roadmaps Products Technologies Customer requirements
Retropolation
on the basis of scenarios
today
short term
medium term
long term
Time horizon (varies according to business segment)
mens philosophy. Simply following trends will not help a company with such ambitions. Instead, it must identify new ideas and approaches, take appropriate action, and thereby become a trendsetter for innovation. In recent years, Siemens Corporate Technology Department has therefore worked closely with the operating Groups in order to develop a package of powerful measures designed to optimize the companys R&D activi-
ties in a systematic and sustained manner. The results can be seen in Siemens Pictures of the Future visions of where the world of technology is headed in the years to come. These are in fact the product of two opposing approaches or perspectives, each of which reinforces the other. On the one hand, the pictures are extrapolations into the future based on the world of today; on the other hand, they are generated through retropola-
tion back to the present, starting from the world of tomorrow. Extrapolation, the first perspective, may also be seen as roadmapping in other words, projecting the technologies and products of today into the future. The aim here is to anticipate, as precisely as possible, the point in time at which certain things will become available or when a need for them will arise. The advantage of this approach an objective starting posi-
area of activity under investigation. For example, it is certainly much easier to make reliable predictions about the nature of power generation and distribution in 30 years than it is to make equally reasonable statements concerning information and communications technology. Once an appropriate time frame has been selected, a comprehensive scenario can be devised, incorporating all relevant factors, including the future development of social and political structures, environmental considerations, globalization, technological trends and new customer requirements. The trick now is to backtrack to the present from
mass appeal. This, in turn, generates new business opportunities for the products, systems and services of the companys business segments as well as a unified vision of the technological future for Siemens as a whole. In addition to being a crucial factor influencing the success of the Siemens innovation initiative, Pictures of the Future have also become a key instrument for optimizing the companys R&D strategy. Such insights into tomorrows world not only sketch a coherent picture of the future but also show how to get there. Ultimately, thats the crucial difference between inventing the future and merely trying to predict it. Ulrich Eberl
Trends
The complex future scenarios developed by Siemens experts in formulating what they call Pictures of the Future have one thing in common: They illustrate the great extent to which information and communications technologies will impact all areas of life in the future. What follows is an overview of the most important trends uncovered by these composite visions.
Experts are in agreement. What began in the middle and second half of the 20th century with the invention of the transistor, the microchip, computers and software and is currently continuing in the form of the Internet and mobile communications has not yet come to an end. On the contrary, it hasnt even reached its heyday. Instead, were at the beginning of a new era on the threshold of the information age. Information and telecommunications technology will radically change all areas of life in the 21st century. Whether its leisure activities or time spent at the office, at home or on the go, whether in the production process or in business, the healthcare sector, education or continuing education the multimedia processing and communication of data, information and knowledge will shape our lives and reduce the importance of the conventional production factors of work, capital and raw materials. The holistic future scenarios, or Pictures of the Future, developed by Siemens researchers together with experts from the com-
Pictures of the
Future
pany's Groups clearly illustrate that the road to the information society is paved with far more than just a series of technological milestones, new microchips, new displays, cell phones, new networks and new services. Virtually all key socio-economic trends produce their own information technology (IT) solutions and these trends, in turn, are sometimes decisively influenced by such technologies. The following are a few of the future trends closely linked to IT advances: Increasing globalization and worldwide IT data sharing will mutually reinforce one another. Trade barriers will continue to fall and companies will research, develop, manufacture and sell their goods and services in more and more countries a development that, in turn, will require a substantial increase in the flow of data. At the same time, communication methods will accelerate innovation processes, such as the development of new products around the clock and around the globe. In many companies, the majority of business processes will soon be handled via networks as e-business. Applications will range from purchasing, simulation, development, automation and production monitoring to the delivery of goods and after sales support. Success will come only to those companies that consistently convert to e-business and recognize that the information age brings with it not just new technologies but also new ways of working. Telework and tele-cooperation will increase. So too will the outsourcing of
ON THE MOVE
Trends
HOME Applications networked via the Internet Satellites / high-altitude communication platforms Multimedia cockpit; navigation and driver assistance
Mobile Internet
Broadband communication
business processes, production and the purchasing of all kinds of services from external companies. An increasing number of breathing companies will form flexible sub-units that work with other companies on a temporary basis. The necessity for life-long learning will increase with the accelerated development of the information society. Knowledge and expertise will become the basis for the creation of value; two out of every three employees are already involved with the procurement, processing and forwarding of data and information. The half-life of technical
and cars. IT will be everywhere, but less and less visible (ubiquitous computing). In the more prosperous segments of society, the importance of leisure time, consumption and personal development will continue to increase. Individual solutions will be preferred and they will be facilitated through the use of IT products. Mobile computers will help book trips, send out tax returns electronically and assist in medical treatment. They will also enable senior citizens to lead independent lives in their own homes. At the same time, efforts will have to be increased to overcome the gap between
For example, by networking hospitals and doctors, IT will help cut costs. It will also help the medical sector introduce electronic patient files and implement new solutions for digital image processing. As the world population increases, so will stress factors that could negatively affect the environment. However, these factors can be more easily monitored through intelligent, networked systems. Microelectronics, microsystems and IT solutions can help to create environmentally-friendly products whether high-speed, piezoelectric-driven valves for vehicle engines, networked build-
Application service providers
Autonomous service robots
Biometric identification
Gateway Voice/ IP servers Private networks for small/home offices XDSL Powerline cable fiber IP (Photonics) Carrier networks IP (Photonics) Routers/ switches Company networks Mobile radio networks IP (Photonics) Carrier of carriers WORK Cable networks for TV and multimedia Routers / optical data transfer
Local servers LEISURE TIME
Global Challenges and Interdisciplinary Solutions

ociety tment -based rning s ive trea ifts wledge The lea arning) y invas phic sh he kno y re ll T a ra Fractal cturing (tele-le ased c Minima Demog compan manufa Home-b d ing adapte Teledo mote ments ens iron MEDICAL e.g. re nance A U T O M A T I O N & C O N T R O L tial env r citiz Residen eeds of senio mainte pany the n n tual com to tomatio ss dicine The vir dicine Total au ibility Busine ide Teleme tive me costs ital div Preven rity lthcare Mobile flex u Hea and The dig ata sec D
Augmented reality Secure telecollaboration Flat screens Projection computers
Multimedia communication Individual navigation and location-dependent services
Information & Communications Trends

Information and communications technologies will permeate and decisively influence all areas of life whether in the home, on the move, during leisure time, on the job, in the healthcare sector, or in industrial production (e-business). In the future, various communications, information and entertainment technologies will converge into a network of networks, which will provide a variable quality of service as well as a very high level of data security for users. The boundaries between information, communications and entertainment technologies will become ever more blurred. The Internet Protocol (IP) will become the most common standard; bandwidths and security problems will be overcome, and multimedia communications will be a matter of course. The development toward higher bandwidths (both in mobile radio and in fixed-line networks) will open up virtually unlimited access to information of all kinds at any place, any time, and with any type of end user terminal or content. In the future, more and more everyday devices will have computerized intelligence and communication abilities. This will be made possible by the continued miniaturization of microelectronics and a higher level of software performance. Voice, gesture and mimic recognition will make devices and applications easier to operate. Human-machine interaction will be transformed into human-computer cooperation. Software agents virtual service genies will be completely familiar with their users preferences and guide them through the jungle of data. Service robots will also become more commonplace. common: they are strongly impacted by information technology and are associated with a high level of networking and reciprocal influence. As such, they can help promote the development of interdisciplinary solutions. Siemens is set to make significant contributions here. IT activities not only represent the largest share of revenues and expenditure for research and development at Siemens; they are also an essential powerhouse of innovation and growth for almost all the companys Groups. Whether in automation, transportation, medicine or power generation its always information and telecommunications that intelligently link, monitor and control the components, devices and systems. They increase convenience and performance, safety and environmental compatibility. What separates Siemens from other companies is that all the building blocks of the global village currently under construction are already located under one roof. This global village will be based on networking from person to person, person to machine, and from machine to machine. It will be marked by multimedia communication and energy networks around the globe; onboard
ter -compu Human tion oopera c
I N F O R M AT I O N & CO M M U N I C AT I O N S
orks of netw Network nt li Efficie tration IT pene ghting s Display ous Ubiquit nication commu nd evices a Smart dtions plica ap
Safety ce ssistan Driver as system
ement manag Energy
LIGHTING
ti Telema cs plosion tion ex Popula problem The CO 2 s hortage Water s
Global primary Limited es sourc re
Link
on sportati d dal tran overloa Traffic Intermo
tion / genera power fficient onservation More e tion / c ted distribu Distribu ystems s power
T R A N S P O R TAT I O N
ction e ns redu n / nois Emissio Pollutio les ll vehic Fuel ce
POWER
ble Renewasources energy conomy rogen e The hyd
knowledge is now just under five years. In the future, tele-learning will become one of the preferred methods of continuing education, while filtering, structuring and personalizing information will become one of the great challenges facing IT. The computer as we know it today will no longer dominate. It will be replaced by new devices capable of intelligent data processing. Electronic structures will become so small and inexpensive that information processing and communication functions will be integrated in clothing, jewelry, refrigerators
rich and poor in terms of the use of information technology (digital divide). The population in the industrialized nations will continue to age. In the year 2020, for example, one of every five inhabitants in Europe and the U.S. will be over 65 today that figure is one out of seven. In contrast, the age pyramid in the developing countries and emerging markets is expanding rapidly in the middle, and the need for modern, affordable technology is increasing. The healthcare system in particular will be very dependent on information technology.
Thanks to the variety of its business segments (marked in green), Siemens is well-equipped to offer interdisciplinary solutions (white) for the global challenges of the future (yellow).
ing automation systems, or computer-controlled automated simulations and production processes. The latter pair can, for example, be used to design intricately shaped turbine blades that increase power plant efficiency and are thus environmentally friendly. All of these developments have two things in
Trends
Automation & Control Trends

The IT solutions of the future will make it possible to network business processes in the working world especially in industrial manufacturing at and between all levels. The transparent factory will then be born. Those with proper authorization will be able to obtain an overview of all processes and also control them, while a global data network will extend the value chain to cover the entire world. A variety of intelligent sensors and actuators will increasingly decentralize automation solutions in both industrial plants and buildings, while tele-service as well as remote maintenance and diagnosis will become increasingly commonplace. Decisions will be supported by software tools for forecasts, simulations (virtual engineering and virtual production) and augmented reality (the merging of computer and real images). Individualized and customer-specific production will require automatic identification systems and e-logistics solutions for distributing goods. Research automation will be an important trend in industrial automation. Miniaturized, automated laboratories (labs on a chip) will be created, enabling thousands of genetic or protein analyses, for example, to take place simultaneously. The chemical, pharmaceutical and food industries will also move toward the fab on a chip. Thanks to microsystem technology, micromodules will be produced that combine high efficiency and throughput with a high degree of flexibility.
Power Trends
Power generation will become more efficient and environmentally friendly; emissions of greenhouse gases and pollutants (per kilowatt of generated power) will decrease. New technologies for distributed power systems will be launched on the market. Examples include small fuel cell power stations for hydrogen and natural gas, and new, thin-layer solar modules. Consumers themselves will be able to operate small, distributed power systems. Thanks to IT solutions, transmission and distribution networks will become more intelligent, and new transmission techniques will make it possible to optimally utilize networks and transport power to exactly where it is needed. Low-loss technologies will be used more and more
Energy supply LIBERALIZATION DIVESTITURE Energy distribution Power transmission Power Gas SERVICES
networks in vehicles; factory, clinic and doctors networks; as well as the intelligent home to name just a few. By driving innovation at the company forward, Siemens intends to build and link all these networks. In addition to making available the requisite products, systems and services, the company also wants to facilitate the simplified operation of increasingly sophisticated technology. Siemens units do more than just cover important future markets; the technologies they use also offer a multitude of opportunities for exploiting synergy potential and generating new business by means of interdisciplinary solutions. A few examples: Software agents independently acting and communicating program units (see pages 50 59). These not only support users when it comes to finding information online; they also help them optimize power network
utilization, communications network capacity, and travel route planning. Automation systems originally developed for the manufacturing industry by Siemens are needed today for building management and the efficient operation of pharmaceutical plants, oil refineries or mail sorting centers.
Traders, brokers
Water / sewage
Power generation On-site cogeneration of heat and power Investors Energy management for buildings
Power generation as a by-product of the chemical industry
Communication
Service card Distributed power generation
E-business Communication centers
Hydrogen filling station as an energy shop
Customer-specific products Methane hydrate production Small, decentralized factories (lot size 1) Virtual power plant management Data networks new Internet Transparent power plant All types of energy networks (with superconductors, high-voltage direct-current transmission, power quality etc.) Customer care centers Multi-service companies
IT-supported development and after-sales service
Individual logistics
Completely automated production Totally integrated automation Automated laboratories, lab on a chip Merchandise tracking
Data networks in intelligent buildings
frequently, including high-temperature superconductors for cables, transformers, generators and short circuit current limiters. Knowledge-based energy services and solutions will be developed, as will densely networked power plants that organize themselves and use software agents to negotiate for gas, power, and heat on spot markets. Energy providers will become multi-service companies offering not just water, gas and electricity, but also telephone and Internet services plus garbage disposal. Consumers will use chip cards and the Internet to purchase such services.
Tele-service is made possible by the combination of intelligent sensors and information and communications technologies. Methods of remote diagnosis and maintenance, such as those long used for industrial facilities and power plants, can now be transferred to vehicle technology. After consulting with the driver, repair technicians can dial into the vehicles onboard system via mobile
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INSURANCE COMPANIES
Trends
Transportation Trends
Drive systems will become more efficient, and less noise and pollutant emissions will be produced. This will be made possible by things like rapid valves for direct fuel injection, new catalytic converters, lightweight materials, superconducting transformers for trains, new methods of vibration damping, and software for low-energy or automatic operation of vehicles (streetcars or subways, for example). An intermodal passenger and freight transportation system could lead to optimal use of all means of transport. Such a system would provide travelers with all the information they need, so that the most convenient method of transport can be selected. All information must be available at all times, in all places, and via all terminals, including the travelers current position, traffic jam reports, timetables, parking space availability and restaurant recommendations. New means of transport such as the Transrapid magnetic levitation train will compete with aircraft for medium-distance travelers. New methods of payment such as the contactless smartcard will make public transportation a more attractive option. Intelligent control systems and algorithms will improve the accuracy of traffic forecasts and monitoring, and thus improve traffic flow. Situation-based driver assistance systems will increase comfort and safety in terms of parking, collision warnings, (semi) automatic driving, multimedia entertainment, plus office and Internet access in the vehicle. Remote diagnosis and maintenance will become everyday services.
Health
CARE AT HOME
Costs INTERNET INTERMEDIARIES Optimization of health measures and costs on an economically sound basis THE DIGITAL HOSPITAL
pharmacy online.com
radio, call up data, locate the problem and perhaps even repair it right away. Tele-service is also an up-and-coming technology for medical systems and household appliances. The intelligent home will integrate information and communications solutions, energy technology, and sensor and building automation systems. Data lines and radio will network systems with decentralized intelligence, such as heating, refrigerators or alarms. These will be linked both with one another and with external networks for the purpose of providing remote maintenance, entertainment content or Internet access. Speech control and speech synthesis systems will be everywhere, whether in the home, mobile terminals, vehicles or operating rooms. These will range from affordable small devices to highly sophisticated server solutions for voice translation programs.
Monitoring of health condition and control
Health information and management systems
wellness.com
3D-scan data acquisition and diagnostic support
IT-supported rehabilitation programs
DOCTORS NETWORK (PRIMARY CARE PHYSICIANS) Electronic patient files / clinical decision-making support
Minimally invasive robotassisted surgery
Medical Trends
GPS satellites Mobile radio networks
Electronic toll collection and enforcement
Fleet management
Variable message display
Adaptive cruise control (platooning) Service center for traffic management / traffic information Parking guidance systems Vehicle-to-vehicle communication Multimedia communication in vehicles
Pre-trip planning personal travel assistance Traffic data acquisition Continually updated driver information and navigation systems Low / zero emissions in urban areas Radio-controlled train operations
Transrapid
Signal head control New payment concepts for public transportation Electronic tickets, hands free Intelligent security systems Portable navigation systems Hydrogen filling stations as energy shops
Self-diagnosis/ remote maintenance
Improved technology will make it possible for doctors to obtain an increasingly detailed look inside the bodies of their patients. Various imaging systems that can be linked to computers will serve to provide detailed, high-resolution images and improve diagnostic accuracy. These systems will use simulations to make subsequent operations safer for patients. Specialized analysis software will assist doctors in their decision making (computer aided diagnosis). Minimally invasive techniques and high-precision robots will reduce the physical strain on patients undergoing operations. Gene and protein chips will enable doctors to make an early diagnosis of illnesses on a molecular level. This will make it possible to produce drugs and medication on an individual basis. Gene treatments are also a possibility. All the departments and wards in digital hospitals will be linked to one another. Computer data will then be stored in an electronic patient file that authorized persons (including external doctors via the Internet) will be able to access at any time. The efficiency of working processes and the quality of care at every level, from diagnosis and treatment all the way to post-treatment, will rise significantly while costs may decrease. Tele-medical processes such as automatic data transfer to family doctors will support patient care at home. The goals involved here must be preventative medicine and care management. Electronic pa tient files will contain detailed information on preventative measures, illnesses, prescribed treatments, and the home care measures that have been taken. It will therefore be possible to avoid redundant examinations and inappropriate treatment.
Car pooling
Multimedia communications and image processing will be put to use for both industrial and medical applications. Augmented reality procedures, whereby computer data is superimposed on real images, will be widely used for everything from machine maintenance to supporting doctors during operations (see pages 14 31). The same applies to security solutions, whether biometric procedures for analyzing fingerprints, voices, hand lines, or encryption solutions (see pages 40 43). These will be used for communications and to provide access to systems or authorized areas. This list of interdisciplinary technologies could go on almost indefinitely. It clearly demonstrates one fact, however: Siemens is well equipped for the information age, both in terms of its portfolio and the strong emphasis it places on information and telecommunications as pervasive technologies. This publication and those to follow in the series Pictures of the Future will focus on how all of this specifically affects those developments that Siemens experts have identified as the key factors in their various scenarios of the future. Ulrich Eberl
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TOMORROWS OPERATING ROOM
In the Year 2015
scenario
The Cutting Edge

What passes as standard operating procedure today will soon look as primitive as Stone Age clubs and bone saws. By 2015,
UCLA Medical Center, September 18, 2015. Thoracic surgeon Janis J. Wan made medical history today when she used cellular techniques to eradicate the last vestiges of cancer from the lungs of a 47 year old unemployed carpenter and father of four. The man, Vincent Carlson Kowalski, had never been enrolled in a wellness plan and had never had a genetic test. The procedure marked the first time that remotely controlled "microbots millimeter-sized tethered robots had been used in conjunction with a new marker substance that makes cancer cells visible to their infrared sensors. Mr. Kowalski is very lucky to be alive today, announced Dr. Wan at an Internet press conference following the three hour procedure. Preoperative diagnostic tests showed that his cancer had not spread beyond his lungs, which is very unusual in advanced cases. His prognosis is now excellent. As recently as the turn of the century, over 150,000 people per year died of lung cancer in North America alone and most patients diagnosed with the disease did not live to see their next birthday. Today, however, thanks to the widespread use of inexpensive and extremely accurate genetic tests and associated theranostic measures (see page 21), only three or four thousand cases occur each year. Dr. Wan explained that after being admitted to the hospital with what appeared to be chronic bronchitis, a routine protein test revealed the presence of Mr. Kowalskis cancer. The patient was injected with a recently approved contrast agent that is entirely non
surgeons will use powerful visualization tools to navigate through the patients
What surgeons will see and feel when looking into tomorrow's Magnaviewer. Left: real time view from microbot instruments. This shows the actual operating field. Small box top left: road map anatomical view of patient's lungs showing microbot current and target locations; bottom left: real time tissue and image analysis from KnowlegeMan data base; top right: voiceactivated access to the previous day's simulation; bottom right: additional information tools and measurements. Haptic gloves give surgeon a realistic feel when resecting tissues.
anatomy on a millimeter level. They will repair tissues using minuscule robotic instruments in procedures
2015
minutely planned through simulation.
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In the Year 2015
scenario
toxic. The agent glows at a unique wavelength when it comes into contact with the enzymes in cancer cells. A scanner then examines areas likely to be at risk and localizes any bright spots to within a few millimeters of their actual locations. Following this step, Mr. Kowalski underwent a CT scan of the five areas where cancers had been detected. The resulting information was used to produce realistic and highly detailed three-dimensional images of the areas in question. A full-scale simulation of the operative procedures, including mapping of the routes to be taken by microbots, general anesthetic and the tethered microbots had been slipped down his trachea to a predetermined launch location. Working from within a glassed-in control pulpit adjacent to the OR, Dr. Wan rested her forehead on a Magnaviewer that gave her a vastly enlarged panoramic view from the tip of microbot A. When youre using the Magnaviewer, you may be looking into an area thats a millimeter in width, but you have the feeling of being in a vast cave. Microbotic lighting lets you see every detail. We call this immersion surgery, explained Dr. Wan. In addition to
Using a head mounted display and marker bridge, a researcher checks how closely the image of a tumor corresponds with the position of an actual (mock-up) tumor. What the researcher sees is shown on the monitors with the tumor marked in red. to their target locations using detailed image information from the previous days simulation and comparing it with real time, high resolution images from their onboard cameras. Onboard ultrasound transducers were used to visualize the tumors on the outer bronchial walls. The microbots know exactly where to go, said Wan. Nevertheless, as an added safety measure, I never release them simultaneously. That gives me a chance to track their individual trajectories and compare them to the planned routes. Once the microbots reached the tumors, Mr. Kowalski received a fresh injection of the marker substance. Several seconds later, the substance had been absorbed by the cancer cells, which in turn became clearly visible to the microbots infrared sensors and to Dr. Wan by means of augmented reality, the overlaying of otherwise invisible image information on actual structures. This part of the procedure demands absolute concentration, said Wan. At this point I put on a pair of haptic gloves they look like standard, oldfashioned surgical gloves but when connected to the feedback outputs from the microbots instruments, they give me a realistic sense of the right amount of pressure to apply as I resect the cancer cells. The procedure then moves along fairly rapidly as I direct each microbot to cut out the tumor in its area on a cellular basis. You just have to be vigilant that no stray cancer cells are carried away down the alveoli and into the blood stream. We avoid this through a program that coordinates the movements of the microbots cutting tools with the moments of respiratory relaxation between inhalation and exhalation, and by positioning the suction device which removes the cancer cells in a downstream position with regard to each cut, explained Wan. She added that, Although what weve accomplished here today is a milestone in surgical management, UCLA Med and other centers are working on the next generation of microbots, which will essentially be sub-micron sized repair systems for cells. In other words, in a few years we expect to be able to reprogram cancer cells so that they will self-destruct. Arthur F. Pease
Major Trends in Surgical Management
Wellness Maintenance Centers Disease Management Centers World Centers of highest disease competence
Nanotec Gene-Repair Machines (m) 3D Immersion Augmented Reality Computer-assisted 3D Planning Remote Microrobots (mm) Intra-corporal surgery machines Operating crab (cm) Minimal Invasive Surgery
Intraoperative Imaging Clinic Chains (franchise concept)
Specialization
Visualization
Miniaturization
Three major trends are expected to shape the development of tomorrow's operating room: specialization, visualization and miniaturization
was then conducted to ensure they could be successfully implemented. The cancers had invaded sections of the inner and outer walls of the bronchi, the principal air passages in the lungs, explained Dr. Wan. Figuring out how to reach those spots with our endoscopic instruments would normally have been a real challenge. However, we were gratified, as always, to see how rapidly our KnowlegeMan expert system investigated possible routes and finally after about 15 seconds suggested several that were ideal in every way. The operation began at 10:30 this morning after the patient had received a mild
the views from microbots, the viewer gives physicians voice-activated access to the previous days procedure simulation, a road map view of the patients anatomy (in this case the lungs) that shows microbot and target locations, diagnostic evaluations based on real time image analysis from the KnowlegeMan data base, and a range of information tools and measurements. When her finger tips touched the sensors on the Magnaviewers joy sticks the system instantly recognized Dr. Wan and the operation began. In rapid succession the five microbots one for each tumor navigated
At Siemens, researchers are developing technologies that will make patients appear transparent and may one day allow surgeons to operate through micro robots on a cellular level. Just around the corner are genetic testing systems that promise to replace many of todays operations with early detection and wellness programs.
The Transparent
Patient
The head is shaved and shines with orange iodine under the surgical lights. A magnetic resonance image on a monitor near the operating table shows a golf ball-sized brain tumor about seven centimeters below the surface. The surgeon takes a look at the monitor, then at the patient. Experience tells him approximately how large an opening he should make in the cranium and about how far down hell have to go before encountering the tumor. Angle of entry? Areas that need to be avoided while reaching the target? Well, thats the stuff you get in medical school, right? Though relying on an impressive array of visualization technologies magnetic resonance (MR), computed tomography (CT), ultrasound and others many of todays sur-
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Siemens Developments
gical procedures are still surprisingly similar to those of twenty years ago. Surgeons still open their patients with little more to guide them to a tumor, appendix or polyps location than the images in their heads and the occasional look over the shoulder at a monitor. But things are set to change. Just around the corner, technologies are taking shape that will make todays operations look like the technological equivalent of charting a course with nothing more than a compass and sextant. Probably the most far-reaching of these nascent technologies is in situ visualization. Also known as augmented reality image guidance, in situ visualization can use a head mounted display (HMD) or semi-transparent plate to superimpose 3D computer images of anatomical structures on the actual environment. The images may originate from just about any digital diagnostic modality, and can be dynamically introduced into the surgeons field of vision. Otherwise invisible structures such as deep seated tumors appear in their exact sizes, shapes and positions vis--vis visible objects such as the surface of a patients head, anchored in their real-world structures with an accuracy of +1/-1mm. In short, in situ visualization is a revolutionary step that sets the stage for the symbiosis of all digital imaging technologies and opens
Given the right tools, our research points in the direction of molecular surgery.
Shahram Hejazi the door to the transparent patient. Comments neurosurgeon Gregory J. Rubino of the University of California at Los Angeles School of Medicine, who is investigating the new technologys clinical applications, Augmented vision can support surgical planning in a very intuitive and efficient way. But the potential of in situ visualization goes well beyond deciding where to cut and how large an opening should be made. A major problem in surgery is that once the patient is open, organs tend to move. This is especially true and particularly dangerous when it comes to brain surgery. Working with Siemens Medical Systems, Rubino has therefore taken the unusual step of having an MR scanner installed in an operating room. The idea is to provide dynamic images of brain anatomy during operations, thus helping to guide neurosurgeons to the exact location of a tumor. To date, he and his team have performed over 100 intra-operative MR (iMR) neurological procedures. During such operations, the patient is periodically swiveled under the MR machine to produce updated images as needed. The next step is to transfer the images that would normally appear on monitors to augmented reality devices, thus providing a kind of 3D roadmap to the target. Says Frank Sauer, Ph.D. of Siemens Corporate Research (SCR) in Princeton, NJ, who has been developing medical HMD applications and is working closely with Rubino, What is unique about our technology is that it offers a dynamic viewpoint. Thanks to a marker bridge dotted with optical markers and attached to the frame that holds the patients head still during the operation, an infrared sensor on the HMD can track the precise distance and angle of the surgeons head vis--vis the patients head. This allows the surgeon to go around the patient and see the tumor from different angles and helps him to intuitively see the best route to a tumor. It holds the potential for improving outcome and cutting costs. A range of diagnostic images fed into the surgeons field of view showing the real time location of tumors and other hidden structures thats just a peek at how augmented reality devices will support surgery over the next few years. But many other information sources may eventually find their way into this all-purpose instrument, including diagnostic information gleaned from hospital and other data bases. The technologies outlined over the next few pages all fit this model. Some, such as virtual colonoscopy, are purely diagnostic today; but married to advanced in situ visualization devices, they will play an important role in simulating surgical procedures and in helping surgeons to rapidly zero in on their targets. ust a few steps from Frank Sauers lab, SCR researcher Bernhard Geiger, Ph.D., is developing novel ways of checking for polyps or abnormalities in the lower intestine, esophagus, bronchi and major arteries. Diagnostic procedures in these areas are set to be transformed by technologies that allow physicians virtually to fly through parts of the body. Thanks to new algorithms developed at SCR, for instance, diagnostic colonoscopy an endoscopic procedure designed to detect abnormalities in the large intestine may soon be no more troublesome than having a CT scan. Virtual colonoscopy can actually replace the real thing, says Geiger. The patient just gets a CT scan, but no endoscope is needed. The doctor goes through the scan with a virtual endoscope as if he were going through the real colon. As long as nothing is found which is usually the case the patient is home free.
But virtual colonoscopies still require real prepping the unpleasant business of clearing the intestine and preparing it for visualization. So Geiger and others are working on a digital fix. It may be possible to digitally remove the stool from the images, says Geiger. If we could obviate the prepping, that would remove one of the main reasons for avoiding the test. Besides, it would make it much faster and cheaper. Before a virtual exam can take the place of a real one, its data have to be transformed into images that are so realistic that from an internists point of view, the two are identical. Thats the job of imaging maestro Gianluca Paladini, 37. Paladini has come up with a Rendering Engine a program that calculates the colors and brightnesses of surfaces based on their geometry, material composition and lighting for SCRs Imaging and Visualization Toolkit (IVT). The engine produces 3D reconstructions of CT and MR data of unprecedented quality, detail and realism. At the heart of this achievement is an algorithm he developed that supercharges a notoriously slow image computation technique called ray casting. Ray casting normally takes 30 seconds or more to compute one image, says Paladini. But by using several optimization techniques, I implemented a ray casting algorithm that computes at an interactive frame rate. The result is that doctors can now zip back and forth through a tract of intestine at 15 frames a second inspecting every nook and cranny that might harbor polyps.
Virtual colonoscopy is already replacing the real thing. Thanks to new algorithms, internists can now move a virtual endoscope through lifelike MR images of the intestine.
Cranium and spinal column as seen from behind. Surgical planning will be enhanced by techniques such as a new algorithm that computes well-defined surfaces regardless of zoom factor.
s imaging modalities such as MR and CT are used to produce specialized studies such as virtual colonoscopy, doctors are being confronted with a new level of information overload. We will soon be up to a gigabyte per patient, say Alok Gupta, Ph.D., who heads SCRs Imaging and Visualization Department. Whats needed is the digital equivalent of a gold miners pan. With this in mind, Guptas team is homing in on a new field he calls interactive computer-aided diagnostics. The idea is to allow radiologists to look at, say, 500 CT images in an acceptable time frame, but without missing crucial
diagnostic data. We are developing techniques that allow doctors to highlight regions that look suspicious, isolate them from the volume data and make measurements, says Gupta. The technique can be particularly useful when it comes to follow-up studies of slowly developing conditions such as precancerous liver nodules where exactly the same nodules must be located and their volumes compared over time. Guptas team, particularly Bharat Rao, Ph.D., is also investigating applications of data mining that hold the potential of producing a diagnosis based not only on the patients own data, but on a vast disease management information base. By conducting retrospective (rather than the typical pro-
spective) studies of the management of individual diseases at hospitals, new, life-saving information is coming to light. The concept behind this, explains Rau, is to create an evidence-based decision support system that will provide feedback to a doctor about a single patient, but based on information from an entire population.
hahram Hejazi, Ph.D., is used to focusing on the future. His job, as head of the Health Innovation Field at Siemens Corporate Research, is to look ahead, analyze new markets, and identify tomorrows business opportunities. When it comes to surgery, what he sees might be summarized as smaller is beautiful. Twenty years ago knee surgery had a recuperation time of almost three months. Now, its a week or two. Why? Because instead of cutting the knee wide open, we get the job done with two or three punctures. The tools have gotten smaller and
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smarter. The same goes for any number of procedures in gastroenterology, neurosurgery, and cardiac surgery. But wait until you see whats on the horizon. In the case of cancer surgery, the major obstacle to success is that stray cells can be left behind. How can a surgeon see those cells? One likely answer is called molecular imaging a developing technology that uses smart and sophisticated imaging agents that operate in the near infrared spectrum so that detection is possible with less expensive and more widespread machines than is currently the case. With this in mind, scientists at Massachusetts General Hospital in Boston have developed molecules that glow at infrared wavelengths when exposed to the metabolic processes in cancer cells. Says Peter Kleinschmidt, Vice President for R&D at Siemens Medical Solutions, we have already developed and tested a device that detects
My opinion is that in coming years surgeons will be supported to an almost unimaginable degree by new, miniaturized versions of (robotic) technologies.
Peter Kleinschmidt these molecule when they glow. We are onto a new sort of imaging system that identifies cancer cells at a very early stage. The potential of this method is outstanding because it allows specific forms of tumor to be differentiated. We call this the virtual biopsy. Also under development are molecular structures that, according to Kleinschmidt, become visible for an MR machine when they come into contact with a tumor. Since these strategies work on a cellular basis, they hold the potential for treating cancers cell by cell with a chemical scalpel while leaving normal tissues completely intact, he says. Treating? Sure. We are working on superimposing MR images of cancer tissues over real patient anatomy. Its augmented reality of affected organs as visualized by molecular processes, says Hejazi. And given the right tools, this points in the direction of molecular surgery.
Current Versus Future Timing of Cancer Management

environmental trigger predisposition first cell mutations 4% cancer starts cancer releases metabolites 20% in vitro tumor markers Todays methodology moderate sensitivity gene profiling Tomorrows Theranostics (therapy / diagnostics) gene repair biological drugs Time monitored prevention highly specific gene and protein chip risk screening individualized drugs genomic imaging anatomical imaging PET chemo-/ radiation therapy surgery cancer grows metastasis formation 80% death
Disease progression Mortality and costs
2%
Anatomy of a Virtual Biopsy

image processing
infrared fiber
740nm Laser diode
fiber coupler lens CCDcamera
interference filter wheel (750nm)
interference filter wheel (770870nm)
Virtual (also called optical) biopsies may provide an inexpensive method of pin-pointing individual cancer cells, thus opening the door to the potential of cellular surgery. The biopsies use a novel fluorescent agent that is activated when in contact with tumor specific enzymes.
Fluorescent contrast agent
quenched fluorophors
Peptide-Linker Tumor specific enzyme
lthough the mechanics of how surgeons will eventually cut and suture tissues on a molecular level are still far from clear (indeed, such treatments may never evolve because medical cures may prove far more practical), Hejazi and Kleinschmidt have little doubt that surgical instruments will shrink rapidly over the next few years. The new thing is minimally invasive surgery, says Hejazi. But we will soon reach a point at which human hands and eyes can no longer keep up. Thats where assisted robotics comes in. Remotely guided by a surgeons hands, robotic instruments are already in use in a handful of centers (see pages 25 27). In fact, claims Intuitive Surgical Inc, maker of a leading robotic OR system, hundreds of such minimally invasive, robotically assisted procedures ranging from mitral valve repairs to coronary artery grafting, have taken place. The robotic tools now in use are still relatively clumsy, comments Kleinschmidt. But my opinion is that in coming years surgeons will be supported to an almost unimaginable degree by new, miniaturized versions of
these technologies. The trend toward barely visible robotic instruments will bring with it a number of advantages. Human tremor, for instance, will vanish at the interface between man and machine; sterile areas will not be put at risk by human contact; comprehensive surgical planning the exact visualization of the paths instruments will take during surgical procedures will be simplified because the exact dimensions and movements of the instruments are known; anesthesia will be reduced; wounds will be smaller, and recovery will be greatly accelerated.
s extraordinary as the advances on surgerys near-term horizon appear to be, there is no denying the fact that the ancient art of cutting and healing boils down to nothing more than fixing things that have gone wrong. But suppose we could keep ourselves from breaking down in the first place? The key to accomplishing that is called gene and protein testing. Siemens has realized that this kind of testing is where the future lies, say Kleinschmidt, and we are working with other companies to bring products to market. Down the road, according to Kleinschmidt, are microchips that will be able to perform thousands of genetic and possibly even pro-
tein tests simultaneously. The implications of a protein analysis product are mind-boggling. Your general practitioner will be able to simply take a blood sample, inject it into a sensing device about the size of a telephone answering machine, and receive a report within minutes as to whether you have early signs of illnesses such as prostate cancer, asthma or diabetes. Such devices could work by exposing a blood or sputum sample to antibodies designed to fluoresce if they come into contact with abnormal proteins. Exposed to laser light, the antibodies will then emit light. Abnormal proteins will be identified by the wavelengths they emit. This technology will allow us to discover nascent tumors years before it would be possible to see them using imaging systems, says Kleinschmidt. Clearly, bioinformatics the new science of harvesting genetic information to produce medical knowledge especially when combined with traditional patient medical information, holds the potential of producing a revolution in medical care and public health. Assuming technologies can be developed that will ensure absolute data privacy and universal data availability, the introduction of genetic testing could move the entire treatment time line forward to the stage of pre-
Time lines of current and future introduction of therapeutic and theranostic strategies. The use of gene profiling is expected to introduce an era in which most cancers can be prevented.
disposition (see graphic above). Predispositions would be treated with highly targeted medications and possibly even continuously monitored with subcutaneous chips. Drawing from huge public health data bases, neural networks would suggest tailored lifestyles and diets designed to maximize each persons healthy life span. The health care community and industry leaders such as Siemens would concentrate less on detecting and repairing advanced illnesses, while focusing more intensely on keeping people healthy. Hospitals would be transformed into wellness centers, and operating rooms miles away from todays cut and stitch culture would become highly specialized control centers in which microscopic robotic instruments guided by surgeons would return the most serious cases to health. Arthur F. Pease
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Interviews with Experts
Customized Operations
Its been over 100 years since Wilhelm Conrad Rntgen discovered X-rays. The first pictures showing the bone structure of his hand caused a sensation.
Professor Axel Perneczky, 55, is director of the Neurosurgical Clinic and Polyclinic at the Johannes Gutenberg University in Mainz. In 1993, he founded the German Society for Endoscopic Neurosurgery and Neuronavigation, as well as the international journal Minimally Invasive Neurosurgery.
Computer-based preoperative planning showing fused, 3D CT and MR images of a cranium. With the aid of a special pen, physicians are able to define and move various cross-sections. This provides valuable insight into the state of the tissue at each location. CT data (yellow) shows bones; MR data (redviolet) shows blood vessels with blue-green area indicating tumor.
An X-ray of W. C. Rntgens hand, taken in 1896
Image courtesy of Volume Interactions Pte. Ltd.
Since then, imaging technology has advanced by leaps and bounds. Today, ultrasound, computer tomography and magnetic resonance imagery provide data that helps physicians simulate procedures onscreen and plan for optimal surgical intervention. In the modern medical world, patients are no longer treated according to fixed procedures instead, they receive surgery tailored to their conditions. Sophisticated navigation instruments and robots also allow surgeons to position equipment in the body with pinpoint accuracy. Pictures of the Future talked with three top experts in surgery and asked them how they plan and conduct operations today and how tomorrows operating room might look. The interviews were conducted by Ulrike Zechbauer.
To operate successfully, we have to retrace the steps made during computer simulation.
In your field neurosurgery how do you expect the operating room to change in the future? Perneczky: In the future, what we call intra-operative imaging will play a big role in neurosurgical operating rooms. Thats the kind of imaging that surgeons use during an operation to navigate instruments and endoscopes to the right position. Intra-operative techniques will involve imaging systems such as ultrasound, computer tomography (CT), magnetic resonance tomography (MR) and angiography. Today, if a surgeon needs an intra-operative MR or CT, the patient generally has to be taken from the operating room to another room. Given the complexity and danger associated with moving a patient at this stage, doctors sometimes decide to do without the images. The operating room of the future, however, will house all the imaging equipment required so that it comes to the patient and not vice versa. In fact, the first steps in this direction have already been taken. In our operating room, for example, weve been using a transportable CT machine for more than three years now. However, if we really want to make use of all the technology thats available, were going to have to make space for it. In other words, operating rooms will have to become much bigger. Let me emphasize that Im talking about neurosurgery here. Another thing were going to require is appropriately specialized technical staff in the operating room. Today, we al-ready need one technical expert for every neurosurgical operating room. In addition, the clinic employs information technology specialists who are responsible for supervising and developing our own in-house computer, documentation and navigation systems.
How important is advance planning for a neurosurgical operation? Perneczky: Its very important. In much of surgery, the conventional strategy is to open up the problem area and take a look at the precise pathological situation. Thats not really an option in neurosurgery. Even the smallest injury to vessels supplying nerves or brain tissue can have serious consequences for the patient. As theres no free space inside the head, we have to create a corridor between healthy structures to the target area. To reduce the impact on healthy structures as much as possible, we have to minimize intervention and draw up an exact geometric plan for every operation. Fortunately, we have access to excellent imaging diagnostics and can therefore familiarize ourselves in advance with the individual patients anatomy before surgery. Is it now possible to conduct a virtual examination of the brain prior to an operation? Perneczky: Yes it is. With the kind of resolution on offer from todays imaging techniques, its possible to detect very fine structures and even simulate a journey through the body. Using CT data and special soft-
ware, for example, neuroradiologists from our clinic have been able to conduct a virtual endoscopy of the inner ear. MR imaging provides just the kind of data we need to make such a simulated trip through the brain. Each morning before the days operations, we discuss the patients image data with colleagues from the Institute of Neuroradiology. Specially developed computer programs convert these images into 3D models, which help us evaluate the area under investigation. With these models, we can also try out different approaches and thereby determine the best operating strategy. The next phase is to implement this individual plan in other words, we have to follow the steps we made during computer simulation. And theres no room for the odd tweak here and there the entire procedure must run perfectly. This is where the navigation of surgical instruments and endoscopes comes in a technology were working hard to advance at our clinic. How does neuronavigation work? Perneczky: First of all, the complete anatomical structure of the head is mapped out in a three-dimensional coordinate system. The calculations to determine the coor-
dinates of each point in the head are based on data from MR and CT images. In the past, we also used radiographic techniques in which images are created by injecting a contrast medium opaque to X-rays. The calculated coordinates are translated onto the patients anatomy using a special kind of frame fixed to the patients head. This socalled stereotaxis is a traditional neurosurgical technique. With the help of computers, the various images are now used to plan the actual intervention. Once in the operating room, the navigation system is linked to special instruments. In this way, the surgeon can observe on-screen the position of an endoscope or a probe not only spatially, but also in relation to the patients anatomy. Thats essentially what we mean by neuronavigation. Given that the area undergoing surgery is incredibly narrow, youve developed a special helmet incorporating a video system that shows the surgeon images from inside the patient. How long have you been using such helmets? Perneczky: We started developing them seven years ago and weve been routinely using them for three years now. The helmets incorporate twin video monitors one for each eye. Originally, the monitors were only connected to the signal from the endoscopic camera. At a later stage of development, however, the system also began to incorporate other visual information. Today, for example, the helmets show images from the surgical microscope camera as well as navigational data from CT, MR and digital
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angiography equipment. Surgeons use a voice-activated control system to select whatever images they need. Its also an excellent teaching aid, since you can connect as many helmets to the video system as you want. Everyone then sees the same 3D images being used by the surgeon and can thus follow every step of the procedure. An important trend in medicine is minimally invasive surgery. What is this exactly? Perneczky: The aim of minimally invasive surgery is to damage as little healthy tissue as possible while achieving maximum therapeutic effect. The popular view that any surgery is minimally invasive just as long as the incisions involved are small is not quite correct. There are situations when a surgeon has to create a large opening in order to treat a patient. In other words, the smallest
possible incision can in some cases be 10 centimeters in length. The aim must always be to achieve the maximum therapeutic effect while minimizing the trauma every operation entails. In addition to surgical considerations, things like cosmetic aspects also have a role to play. For example, scars should be as nearly invisible as possible. Its also important to avoid shaving large parts of a patients head, so that he or she feels confident about meeting people after the operation. Optimally invasive rather than minimally invasive therefore better describes what were trying to achieve. Turning to the subject of telemedicine, could you imagine a situation in the future in which a cardiac surgeon in one city operates on a patient in another? Perneczky: From a purely technical point of view, I can easily imagine it, provided that
both places are equipped with the same systems. However, I see an ethical problem here. In my opinion, the senior surgeon must be present in the operating room. The human body is always good for a surprise or two. In any operation, unforeseen problems can arise that need to be solved immediately and on the spot. In such a case, a telesurgeon hundreds or thousands of kilometers away wouldnt be able to take appropriate action and would therefore have to rely on the skills of the team in the operating room. But if the surgeons there are just as capable of performing the operation, why bother with the telesurgeon in the first place? Moreover, I dont believe that each operation calls for a specialist,. Thats like saying the surgeons at the clinic cant cope with the operation. Do you see better prospects for the area of teleconsultation, where a physician in one place would advise a colleague in another either during an operation or during the preoperative planning phase? Perneczky: From a technical point of view, I find the idea interesting. But from a medical one, I think that teleconsultation would be every bit as awful as what weve just discussed. Just imagine that a patient being operated on has just put his or her trust in the surgeon and the operating team, when suddenly another doctor, who is following the operation via a video link, says: Stop! You shouldnt be doing that. And the surgeons back in the operating room reply: Okay, youre the expert. Tell us what you want, and well do it your way. Should something go wrong, the responsibility always lies with the person operating. Theres no way that he or she can wriggle out of this at a later time. I find it highly dubious that a surgeon should suddenly alter something during an operation and then be able to say afterwards: But it wasnt my idea. The potential advantages of teleconsultation in preoperative planning are also overrated. If its a simple question, you dont need a second opinion. And if its a complicated one, you end up with as many different answers as the number of people you have asked.
Prof. Martin Brner, 57, has been medical director of the Berufsgenossenschaftliche Unfallklinik in Frankfurt am Main since 1990. A pioneer in the use of robotics in surgery, he became the first surgeon in Europe to employ the technology known as Robodoc seven years ago.
Medical robots are a technical aid. But they cannot replace the surgeon.
Back in 1994, your clinic became the first in the world to begin routinely implanting artificial hip joints using robots. How many operations have you conducted with the Robodoc system and what are the advantages of this treatment? Prof. Martin Brner: Altogether, weve carried out 4,000 hip-replacement operations using Robodoc. Since March 2000, weve also implanted around 300 artificial knee joints using robot technology. The biggest advantage of this method is that it enables us to plan an operation using a 3D model and then implement our plan with the highest precision. Working on the basis of patient CT images generated before the operation, we can select a virtual joint from our prosthesis catalog and place it in exactly the right position on the computer screen. This can be done to a precision of 0.1 millimeters in any direction and within an angle of a tenth of a degree. Next, the CT data and other planning information are fed into Robodoc. During the operation, the robot is able to mill away the thighbone by exactly the right amount, thereby ensuring a perfect fit for the replacement joint. And since the prosthesis fits perfectly and is exactly aligned with the axis of the bone, the patient is able to put a full load on the new hip right from the start. The figures paint an even clearer picture: With the robot, the degree of surface contact between bone and the artificial joint is as high as 95 to 98 percent, whereas even a highly experienced surgeon working by hand will only achieve somewhere between 30 and 35 percent.
Do patients trust medical robots? Brner: Absolutely. Robodoc enjoys higher acceptance among patients than among doctors. Patients also have higher expectations regarding the technology. In fact, its ultimately due to patients that the method has made such rapid progress. Some physicians are afraid that the robots could end up taking their jobs. But thats nonsense. In the run-up to a hip operation involving a robot, for example, the surgeon actually spends more time with the patient than is the case with conventional hip-replacement surgery. Every intervention on the part of the robot must be precisely planned. By contrast, an anonymous survey of hip-replacement surgeons revealed that only 45 percent of conventional operations actually involve any preoperative planning. What other procedures could be performed by robots in tomorrow's OR? Brner: A voice-activated robot that hands me surgical instruments during an operation would be very useful. After all, removing pins and metal plates from specific bones always calls for the same range of instruments. Before an operation, the nurse would prepare everything and put the instruments in a particular place. Once in the operating
Using a video helmet outfitted with twin monitors, surgeons can see 3D images of regions inside the patients body. A voice-activated control system allows them to choose CT, MR, endoscopic or microscopic images.
With the help of sterile robots, artificial knee joints can be precisely implanted.
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This spider-like creation is a robot known as Otto von der Decke. It can drill holes for facial prostheses to an accuracy of 0.2 millimeters.
room, the surgeon would request, say, a hex wrench, and the robot would hand it over. At present, the image converter used to observe the patient during an operation is run by a member of the operating room team. In the future, it could be mounted on a robot-controlled platform that responds to voice commands. The crucial thing about any development in medical technology is to ensure that physicians work closely with technicians, engineers and IT experts. Collaboration is the key to creating the kind of new technologies that genuinely boost the quality of healthcare. In the future, we will see more medical technology experts focusing on surgery. This relatively new field has a promising future. Will the nature of medical training also have to change? Brner: Yes, but theres a danger here that interns will no longer learn the basics and will instead rely on technology. The trouble is that when the technology fails, theyll have big problems turning to conventional methods. The solution here is to come up with a training compromise that takes equal account of the classical elements of surgical techniques, on the one hand, and technical know-how, on the other. I believe the practice of learning by doing on patients will become less and less important. Instead, interns will focus more on individual preoperative planning and will use special simulators to practice operations over and over again. To that extent, theyll be like airline pilots, who have to spend a long time practicing on a flight simulator before they actually see the inside of a cockpit. Will future medical robots perform operations on their own? Brner: No. I believe that a surgeon will always be present during each stage of an operation and will order each action that a robot takes. Medical robots are a technical aid. They do not replace anyone. Instead, their function is to provide support in the operating room. The sole aim of such technology must always be to boost healthcare quality and improve patient well-being.
Operating room robots are becoming more and more popular. How many of them are now in clinical use? Prof. Tim Lth: Not very many. At present, only some 200 machines worldwide are used in operations involving people. This includes robots used in orthopedic surgery that mill bone as well as the interactive, robot-based equipment used to guide instruments in neurosurgery. In addition, some 600 cameraguidance systems are used in minimally invasive surgery. Of the few research institutes currently working on the development of medical robots, most are located in Germany and the United States. In March of last year, physicians at Berlins Charit Hospital became the first in the world to use medical robots in a facial operation. With the help of the new technology, they were able to fit an artificial ear with extraordinary precision. The robot used costs about 500,000 euros and was developed by you. What advantages does it offer? Lth: Just imagine that you want to hang a picture on the wall. First of all, you mark two holes and then reach for the drill. Afterwards, however, you realize that youve drilled in the wrong place and the picture is lop-sided. Things are similar in
prosthesis to fit. As a result, patients often have to wait for weeks to have, say, an artificial ear fitted. On the other hand, our intelligent robot we call him Otto von der Decke (Otto from the ceiling) can calculate the exact position of the bore holes in 3D and at an accuracy of 0.2 millimeters. It can control the drilling operation so precisely that we can be almost 100 percent certain that a prefabricated prosthesis will fit perfectly. A patient can therefore be fitted with an incredibly lifelike silicon ear on the day of the operation. Otto is the only facial surgery robot in the world to have been approved in line with legislation governing medical products. Given such impressive results, do you think that robots may one day replace surgeons? Lth: No, I think thats completely utopian. The surgeon is irreplaceable and will remain so. Even in the future, were not going to see robots operating autonomously. Instead, theyll continue to support surgeons and will help improve the quality of medical care. At the end of 2001, youre going to start marketing a robot system for dental implants. Will dentists be able to afford RoboDent? Lth: Larger dental practices will certainly
been approved throughout Europe and procedures are also under way to obtain approval for its future use in the United States as well. What does the RoboDent system actually consist of? Lth: RoboDent is made up of a standard PC, a small monitor, planning software and a special infrared sensor capable of measuring the alignment of the drill in the patients mouth to an accuracy of a few tenths of a millimeter. Using the PC, the dentist is able to precisely plan the implant. During the actual operation, this knowledge results in an accuracy of half a millimeter. This is because the dentist is able to work with both hands free and with great precision. On a monitor located right next to the patients open mouth, the system shows a 3D image of exactly where the drill must be positioned. In this way, the dentist can fix the titanium pegs so that they are exactly parallel to one another and, in turn, can mount the new implants so that they fit perfectly. As a result, the patient leaves the dentists office with a new set of teeth capable of handling any kind of food within a week. Whats more, the system is so simple that dentists can learn to use RoboDent in just five minutes. Will drills fitted with navigation systems be standard equipment in dentist offices in 15 years? Lth: I think that the majority of them will have this kind of system by 2015. In fact, our estimates suggest that 100 RoboDents will be in operation by the middle of next year. And once a technology has proved itself, it tends to catch on quite quickly.
By the year 2015, most dentist offices will have a robot system for implants.
In 1997, Professor Tim Lth, 35, was appointed director of the Surgical Robotics Lab and Professor of Robotics and Navigation at the Charit Medical Faculty of Humboldt University in Berlin. Just two years later, Lth, an electronics and information technology specialist, received the prestigious Alfried Krupp Award for young academics, which is endowed with 500,000 euros. At present, he is the only professor of medical robotics in Germany; in total, there are only three professorships in this field worldwide.
facial surgery. Fitting artificial facial elements involves screwing small titanium pegs into the patients skull or jawbone. If the surgeon bores out the thread of the screw by hand, its impossible to say in advance exactly how the peg will sit in the bone afterwards. Thats why physicians generally first measure the position of the titanium pegs once all the bore wounds have fully healed and then order a facial be able to afford it. RoboDent will approximately cost 50,000 euros this is onetenth of what you would have to pay for Otto von der Decke. Some patients spend more than 50,000 euros on dental implants, so its only natural that they expect top quality. RoboDent is destined, in my opinion, to play an important role in the dentistry by guaranteeing that dental implants fit perfectly. The system has already
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Working with Clinics
Siemens has succeeded in combining CT and PET data in a single image a decisive step forward in the diagnosis and treatment of tumors. puter tomography (CT) examination provides sectional views of human anatomy, positron emission tomography (PET) provides information on the metabolic activities of tissue for example, the tissue in tumors and metastases. However, PET does not allow for exact anatomical location. Siemens has succeeded in combining the two imaging procedures to provide doctors with reliable indications of any suspicious changes in tissue. As a result, doctors can now more reliably diagnose whether the metastases have spread to the liver or whether the growth in question is benign. CT-PET image fusion is a decisive step forward as far as the identification and treatment of tumors is concerned, says imaging (MRI) scanners are associated with high equipment costs. This is why we are making increasing use of ultrasound techniques. Together with the MITI group, Siemens has developed the worlds first navigational ultrasound laparoscope probe. The device, which has been in use for the last 12 months, can be used for high-resolution examinations of the organs in the abdomen during an operation. Whereas conventional ultrasound-laparoscopes only provide two-dimensional sectional views, sections of organs can now be localized and displayed in three dimensions. We have integrated a navigation sensor into the tip of a conventional ultrasound laparo-
Interdisciplinary cooperation
The Minimally Invasive Interdisciplinary Therapeutic Intervention (MITI) working group was established at the Klinikum rechts der Isar a clinic belonging to the Technical University of Munich in early 1999. MITI is a research association comprising the following members: the Surgical Clinic (Professor Siewert); the Second Medical Clinic (Professor Classen); the Institute for Diagnostic Radiology (Professor Rummeny); the industrial companies Ethicon, Hamburg, Olympus Optical, Hamburg, and Siemens Medical Solutions, Erlangen; the German Aerospace Center (DLR, Professor Hirzinger), Oberpfaffenhofen; the Institute for Medical Physics (IMP, Professor Kalender); and the University of Erlangen-Nuremberg. MITI also receives support for its interdisciplinary gastroenterological surgical workplace project from the Bavarian Research Foundation.
Hand in Hand
Doctors, technicians, engineers and computer scientists at the Klinikum rechts der Isar one of Munich's largest hospitals are working with Siemens to develop the operating room (OR) of the future. The main focus of their efforts is the improvement of minimally invasive procedures and treatments.
Minimally invasive surgery, also known as keyhole surgery, is less traumatic for patients than conventional surgery and continues to grow in importance. For engineers, the challenge is to develop new medical instruments and techniques that take all the intricacies of human anatomy into account. It goes without saying that methods and tools that function perfectly in high-precision tests on a rigid plastic model are not necessarily suitable for the human body, which is constantly in motion. The MITI working group at the Klinikum recht der Isar in Munich (see box opposite) is testing new technologies and procedures in conditions that are as realistic as possible. Siemens Medical Solutions is one of the partners involved in this interdisciplinary group, which was established in early 1999. MITIs main goal is to develop and implement the concept of the operating room of the future, says Professor Hubertus Feussner, a surgeon at the Klinikum rechts der Isar and member of the MITI working group. Our latest project is the interdisciplinary gastroenterological surgical workplace. With this pro-
ject, we want to optimize minimally invasive procedures and treatments. In particular, we hope to make the surgical treatment of diseases of the abdominal and thoracic cavities less traumatic and more efficient than is the case at present. The magic word teamwork is certainly not a meaningless motto here. Not only do independent disciplines such as surgery, gastroenterology (the branch of medicine that deals with the esophagus and gastrointestinal tract) and radiology work closely together within MITI; the group has also established close relationships with companies such as Siemens. Both sides are benefiting from this cooperation. For example, the MITI working group has developed new imaging techniques and navigation systems for guiding instruments, as well as image processing methods such as those for the fusion of different image data. While a com-
Feussner. Using a patient-based coordinate system and our navigation system, we can now accurately locate tissue areas identified by PET and then take an appropriate tissue sample.
etastases that have been identified in the patients liver can be surgically removed. Every step of such an operation must be monitored with the help of imaging procedures. It is important that we use simple and gentle methods in the operating room, says Feussner. Computer tomographs cannot be used in every situation because of ionizing radiation, and magnetic resonance
scope, says Professor Gerd Wessels, project manager at Siemens Medical Solutions and acting head of MITI. Using an electromagnetic field, the sensors position can be defined. Two-dimensional ultrasound images are recorded together with their spatial coordinates and reconstructed to form a 3D set of image data. Surgeons can examine the 3D images on a monitor during the operation and plan what to do next. For example, they can see whether and to what extent a liver metastasis has affected surrounding tissues. At the same time, they can confirm or rule out whether the tumor has infiltrated a nearby large blood vessel. Another advan-
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Working with Clinics
Siemens Integrated Operation System (SIOS) will soon be in use at Munichs Klinikum rechts der Isar.
I n
to function properly, identical image information and therapy planning data must be available in different parts of the clinic. This vision has become reality at Munich's Klinikum, thanks to a combination of modern network technology and Siemens syngo workstations. Says Wessels: Doctors can exchange, discuss and alter their therapy planning data using these terminals. The workstations store all the information, process it and display it on monitors. The same data is available simultaneously to the team in the operating room and the clinical institutes involved. This allows them to conduct professional discussions via the internal clinic network. Alternatively, if someone draws something on a screen, others can follow
B r i e f
Future operating room systems will be characterized by computer technology, high-resolution imaging, IT networking, minimally invasive surgery and robotics. Doctors, technicians, engineers and computer specialists will work together more extensively to advance these developments. Doctors will increasingly plan operations in great detail for example, by simulating virtual journeys through the patients body. This means that each operation will be carefully adapted to suit the individual needs of the patient. An increasing number of operations, minimally invasive operations in particular, will be carried out with the assistance of robots. At present only around 200 medical robots worldwide are in use. Robots increase the quality of medical care because they are more accurate than human hands. Nevertheless, they do not and will not operate on patients alone. Their role will instead be to support the surgeon. Telesurgery and teleconsultation are considered by many medical experts to be questionable because responsibility for procedures should lie with the surgeon. Probably the most far-reaching operating room technology will be in situ visualization. The technology can use a head mounted display (HMD) or semitransparent plate to superimpose computer-generated data on images of the patient. Because these data (3D images of anatomical structures, for example) is displayed in exactly the right size, form and position, the patient becomes transparent as far as the surgeon is concerned. Researchers are developing novel ways of checking for polyps or abnormalities in the lower intestine, esophagus, bronchi and major arteries. Diagnostic procedures in these areas are set to be transformed by technologies that allow physicians virtually to fly through parts of the body. A new field called interactive computer-aided diagnostics is on the horizon. The idea is to allow radiologists to look at, say, 500 CT images in an acceptable time frame, highlight regions that look suspicious, isolate them from the volume data and make measurements. Scientists at Massachusetts General Hospital in Boston have developed molecules that glow at infrared wavelengths when exposed to the metabolic processes in cancer cells. Siemens has developed and tested a device that detects these molecule when they glow. The method holds the potential of allowing specific forms of tumors to be differentiated. Siemens is working with other companies to bring genetic testing products to market. Down the road are microchips that will be able to perform thousands of genetic and eventually protein tests simultaneously. CONTACTS Siemens Medical Solutions: Peter Kleinschmidt, MED GT Fax +49 9131 844-771 peter.kleinschmidt@med.siemens.de Prof. Gerd Wessels, MED GT I / MITI Fax +49 9131 844-771 Fax MITI +49 89 414-07393 Gerd.Wessels@med.siemens.de Siemens Corporate Research: Shahram Hejazi Fax +1 609 734-6565 shahram.hejazi@scr.siemens.com Frank Sauer Fax +1 609 734-6565 frank.sauer@scr.siemens.com LINKS Siemens Corporate Research: www.scr.siemens.com UCLA Medical Center Research News: http://www.ucla.edu/research.html University Clinic Mainz, Dept. of Neurosurgery: http://www-klinik.uni-mainz.de/ Neurochir/english/index.htm Charit Berlin, Surgical Robotics Lab: www.srl-berlin.de Carnegie Mellon University Medical Robotics: www.mrcas.ri.cmu.edu
tage is that we can use the navigational system to define a coordinate system for the patient and use this for all digital imaging procedures, such as CT, MRI, ultrasound, PET, or the positioning of an instrument, Wessels explains. By combining an ultrasound image with the corresponding CT image, for example, we can provide doctors with a more comprehensive view during the examination. everal treatments can be used to remove growths from the gastrointestinal tract, including new combination surgery. With the so-called rendezvous technique, which is currently being refined at the Klinikum rechts der Isar, two or more instruments (flexible
Surgery Through a Keyhole

Although experts agree that the number of minimally invasive operations will continue to increase, it is still difficult to arrive at an accurate prognosis. That's because the healthcare market is regulated by the government, and political influences are constantly changing. Another problem is that because the areas of application for microtherapy are so varied, serious forecasts can only be made for individual disciplines. Professor Ernst Eypasch of St. Hildegardis hospital in Cologne, estimates that some 70,000 80,000 intestinal cancer operations are carried out in Germany every year. About 15 percent of such operations are now conducted in a minimally invasive manner. This figure could reach 60 to 70 percent by 2010. Such procedures result in much shorter hospital stays and faster recuperation, all of which reduces the cost of treatment. Whether this will apply to all operations is not clear, as the Association of Employees Health Insurance Companies has noted that an increasing number of operations conducted are not medically essential.
Percent (Total number of cases in Germany: Approx. 80,000 per year) 70 60 50 40 30 20 10
The number of minimally invasive intestinal cancer operations is expected to rise from 15 percent in 2001 to 60 70 percent in 2010. (Source: E. Eypasch)
2000 2005 2010 Year
endoscopes and rigid laparoscopes) are used simultaneously. The tips of the instruments must be brought together carefully in the area which is being operated upon a very difficult feat, since the surgeons cannot see the instruments. The endoscope, for example, is inside the intestines while the laparoscope is outside. This blind date is relatively difficult to bring about because the wall of the intestines blocks the surgeons view. In the past, surgeons got around this difficulty by moving the tip of the endoscope along the wall of the intestine to make it bulge out a time-consuming process. With this in mind, Siemens and MITI developed a navigation system that allows the tips of the instruments to find each other immediately through the use of position sensors. The images from both the endoscope and the laparoscope are visible on a monitor. Doctors can also see a scale indicating how far away from each other the two instruments are, and whether they are moving towards or away from one another. Reducing the socalled rendezvous times in this way shortens the length of the operation a relief for both doctor and patient. But an interdisciplinary workplace also requires measures that actively include medical disciplines situated at different locations in both the diagnostic and treatment processes, says Wessels. For such a workplace
Rendezvous in the intestines: Great precision is required when bringing the tips of an endoscope and a laparoscope together.
what is happening via their monitors. Syngo workstations also allow doctors to call up CT data sets both as a series of layer images and in a 3D depiction. They can also move around inside these images virtually and determine the best path of access for an instrument. Should an unforeseen situation arise during the course of an operation, doctors will also soon be able to use the clinic network to confer with specialists from other disciplines before deciding what to do. Ulrike Zechbauer
@
LITERATURE G. Rubino, et al, Interventional Magnetic Resonance Imaging Guided Neurosurgery, Siemens electromedica 68, neuro 2000 F. Sauer, et al, A Head-Mounted Display System for Augmented Reality Image Guidance: Towards Clinical Evaluation for iMRI-guided Neurosurgery, Lecture Notes in Computer Science. Contact: frank.sauer@scr.siemens.com
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GLOBAL NETWORK OF INNOVATION
User Interface Design
Heres Where Users Go for Help

imitate 7% read 7%
The Fine Art of Listening to the Customer

Ever tried using a new cell phone or computer program and wound up being totally frustrated? Customers often wonder why some products are easy to use while others defy logic. The secret lies in making things simple and, above all, listening to the customer.
Separated by a one-way mirror, experts at the User Interface Design Lab ob-serve a user's reactions to a possible new product.
Recently, Siemens Corporate Technologys User Interface Design (UID) Lab inaugurated a third center in Princeton, New Jersey its sister labs are in Munich and Beijing. The facility is located at Siemens Corporate Research, which serves as a global center of competence in four core technologies. The concept behind the UID labs involves a common sense approach have people use products, whether cell phones, kitchen appliances or computer tomograph (CT) systems before they go out the production door. Sounds logical, but the person who should have been consulted the user is often left out of the picture. When we established the first usability lab in Munich, the prevailing assumption was that the customer would
adapt to the product, notes Dr. Heidi Kroemker, who heads up Siemens User Interface Design Labs worldwide. We had to work hard to make development engineers realize how important it was to consider user interface design and usability engineering in the very early stages of product development. Arnold Rudorfer, Manager of the Princeton Lab, has worked closely with UID Lab counterparts in Munich and Beijing on user interface design projects for Siemens companies. A few months ago he began working with Siemens Information and Communication Networks (ICN), a leading provider of integrated voice and data networks for enterprises, carriers and service providers in the U.S and overseas. Headquartered in Boca Raton, Flori-
da, ICN wanted to redesign a prototype B2B (business-to-business) Web site to make it more responsive to customer needs. Specifically, they wanted to streamline how their U.S., German and British customers purchased telecommunications equipment and services online. Our goal was to make the customers interaction with the B2B site as easy and simple as possible, notes Rudorfer. Answers to problems should be available in a couple of mouse-clicks not 10 or 20. How could we simplify navigating the site so that customers found it easy to use? Knowing that UID Labs had specific experience in helping other Siemens companies on user interface design projects particularly on e-business Web sites ICN turned to the UID Lab.
From past experience, UID experts knew that using a customer-based approach was key to gaining user acceptance. Further, the Labs interdisciplinary skills including computer science, engineering, physiology, linguistics, design, and psychology provided a unique background for solving users problems. As a result, a detailed strategy for redesigning the B2B Web site was drawn up and approved by ICN and the UID Labs. Interview sessions with both ICN and their customers to find out how they interacted, plus on-site customer workshops would address usage issues. The customers we visited were impressed with the way Siemens accepted their ideas and input, and a little surprised that we would actually fly people in to listen to their suggestions, Rudorfer said. After completing the interviews, customers participated in focus groups at the Princeton lab to help identify the right set of functions and content for selected tasks. Additionally, UID experts helped uncover how the user expected to interact with the web site. In this way, Rudorfer said, we were able to focus on what was most important to ICNs customers. Because the customers were helping design their Web site, the Princeton experience was very positive someone was listening to what they were saying. Following the focus group sessions, UID researchers were able to design a well-defined set of functions, plus expected information and content, for a screen layout of the B2B Web site. Most of the improvements suggested by the users were adopted. Service reports needed to be streamlined. Normally, the customers account manager would need several days to compile a report that listed all customer inquiries. Implementing UID suggestions reports went from three days to three mouse clicks ensuring not only quicker responses to concerns, but more satisfied customers. Quotes for small equipment orders were also speeded up by installing an online quote calculator. By providing estimates automatically, this time-consuming process was reduced from five days to some five minutes. Additionally, ICN simulated online equipment orders to uncover how easy or hard it was to
place an order using the B2B read & try 16% prototype. The UID Labs philoINDIA sophy is to find out what works or doesnt from the trial & error 16% customers perspective, which ask friends 54% is why subjects are often video taped behind a one-way ask friends 10% mirror. After the customer is imitate 25% taped using the product read & try 14% whether web site or CT CHINA system the user and UID researcher review the tape. Sessions such as these help to trial & error 26% ask vendor 25% fine tune the product. Within the B2B project, blue prints of the final user interface the ask vendor 5% screen layouts were designask friends 7% ed and evaluated in several trial & error 7% iterative steps. These resulted read 47% GERMANY in several important improvements. Finally, the usability inspections and tests helped to fully validate the UID Labs read & try 32% design strategy. Today, ICNs B2B Web site is being impleimitate 5% mented, with U.S., German trial & error 36% ask friends 18% and British customers expected to go online at the same I TA LY time later this year. UID Lab analyses not only benefit read & customers, but also the comtry 18% pany, explains Dr. Kroemker. read 23% An average savings of 30 percent in development costs can Those who've examined be realized using the Labs experts and faciliusability studies for cell ties, and in some cases that figure may be phones know that product even higher since cost intensive improvemanuals are next to useless ments are no longer necessary. To date, in China and India where more than 100 products have been tested in most people ask friends the UID Labs, including washing machines, or sales people for help. cell phones, software, hearing aids, comExactly the opposite is true puter tomographs, automation devices, and in Europe. And nobody even power plant maintenance units. The reads instruction manuals UID Labs close cooperation with customers more carefully than the and across cultural and geographic boundaGermans. ries whether in Munich, Princeton or Beijing is helping Siemens find out from actual users what their likes and dislikes are. If good listening skills are something of an art form, then Siemens seems to be raising user interface design to a fine art. Guy Pierce
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E-BUSINESS
Electronic Money in 2010
Money
In the future, SmartCards will be used for all kinds of payment transactions. As a result, cardholders will no longer have to remember a PIN number. A fingerprint will be sufficient to identify the user. Automobile purchases via the Internet? By 2010, this could be commonplace, thanks to portable computers with flexible large-format displays, virtual-reality headsets and secure data transfer links.
Digital
Paying in Bits and Bytes

Money will become increasingly immaterial in the years and decades to come. With the advent of ever more refined technologies, a large percentage of payments will be conducted electronically via the Internet, a SmartCard or a cell phone. As a result, transactions involving bills and coins will become something of a rarity.
their biotech company. Still out of breath but relieved that theyre going to make their flight, they now stand at the entrance to the airport wondering what to do. At last, a business trip where I can get some shopping done, says Bach. Well, go ahead then! Brown replies encouragingly. After all, its your wedding anniversary tomorrow. She turns to the taxi driver, who is waiting patiently for his fare. The bill is paid electronically, with the taxi driver first dialing up the number of Browns account and then entering the amount to be paid. A second or two later, her cell phone rings and she confirms the sum by giving her code and speaking a few words so that her voice can be identified. Her bank then transfers the money automatically to the taxi company. Brown gives the driver a five-euro coin as a tip. She has to laugh at the expression of surprise on his face. Its obviously been some time since he handled cash. Nevertheless, hes quite happy to accept a few units of a leading international currency. By now, Bach has located a perfume store. He hesitates in front of a shelf stocked with hundreds of perfumes. On the lookout for something special, he eventually spots a
Payments for minor purchases, such as parking, vending machines and taxi rides will be possible via cell phone.
scenario
Shanghai Pudong International Airport, June 2010: Ill just pay the driver, Cynthia Brown calls to her colleagues, who are already hurrying into the airport building. She takes out her cell phone and hastily dictates to the taxi driver the number of her virtual account. The presentation at the venture capital company had taken somewhat longer than expected. And then the traffic was horrendous if only theyd taken the Transrapid! Now its only 25 minutes till take-off and despite the reservation, things could be tight. Its okay! calls a voice from behind her. The planes been delayed for two hours, says Markus Zoller. Oliver Bach, his tie still draped over his shoulder from running, breathes a sigh of relief. The three colleagues have been in Shanghai to raise money for
2010
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E-BUSINESS
Electronic Money in 2010
scenario
box that stirs a vague memory. Suddenly he realizes that hes looking at a perfume his wife has always wanted. At the cash desk, Bach produces his SmartCard, which the sales assistant promptly draws through a card-reader and hands back to him. To confirm the transaction, Bach presses his thumb onto a small field at the edge of the card, which acts as a fingerprint sensor. Seconds later, a low peep verifies that the card is being used by its rightful owner. The only thing left for Bach to do is to confirm the amount, and the price will be deducted from his credit card account. Satisfied, he wanders back through the departure hall. At another store, he sees the latest book in the second Harry Potter series: Harry Potter and the Ghost of Cambridge. Whats more, its on sale for the equivalent of only 25 euros! Bach has already bought the book in Germany, but he remembers it being much more expensive. He takes out his SmartCard, identifies himself and, using his thumb, scrolls down through the entries on a small display. Searching through last weeks transactions, he quickly finds what hes looking for: at his favourite Internet outlet, he paid 35 euros for the book. Since his brothers birthday is coming up, Bach decides to buy it again. In fact, he decides to take three copies. After all, many of his friends would be delighted to receive the book as a gift. Zoller, meanwhile, is busy studying the display on his personal digital assistant (PDA). At the moment, he only has eyes for his new car. In the last few minutes, he has received a message from his car dealer's software agent informing him that the design study is now ready. Zoller uses the broadband service on offer at the airport and selects a 10 megabit per second connection to the Internet. After calling up the dealers website, he opens up his very own personal page, where all his specifications for the new vehicle are listed. Zollers new car will be a 100 kW gasoline model, capable of traveling 100 kilometers (62 miles) on 4.5 liters (1.2 gallons). And although he hasnt opted for one of the new fuel cell hybrid models, the vehicle will be equipped with the very latest multimedia system. The gleaming red convertible will also sport beautiful pale leather upholstery. Zoller has, in fact, been able to choose just about everything for the new car right down to the specific details of the dashboard. Now hes going to see the results for the first time. He takes his virtual-reality headset from his briefcase and slips on a data-glove. At the press of a button, the data begins to flow and the car takes shape before his very eyes. With a deft movement of the data-glove, he is able to rotate the sports car and inspect it from all sides. Reaching for the virtual doorhandle, he opens the vehicle and gazes inside. Suddenly, a computerized figure appears obviously the dealers virtual sales representative: Mr. Zoller, let me make you an unbeatable offer: pay now with e-cash, and Ill give you an eight percent discount! Thats the kind of deal thats just too good to pass up. Zoller therefore clicks on the pay symbol in order to debit the sum from his virtual account. The computer now creates a link to his bank, and special software encrypts the data transfer. Bach looks over his shoulder with interest: Is that secure? he inquires. Sure, Zoller replies. Youd need a quantum computer to crack an elliptical key with 512 bits. Thats the equivalent of RSA with 15,000 bits and quantum computers havent been invented yet. Bach is confused but nods in admiration. Meanwhile, Zoller enters the sum, clicks on the payment symbol and shuts down the bank program. Any success? asks Brown. Ive bought myself a silk dressing gown with dragons on it. Zoller looks up. Not bad. But take a look at this. Ive just bought myself a new car. At that moment, a melodious noise from his PDA signals the arrival of a v-mail. The short video clip shows a delighted car dealer informing Zoller that the money has now been transferred. With his order already on its way to the factory, Zoller will soon be able to follow the different stages of production via the Internet. He smiles, and folds up the computer and puts it in his briefcase. Let me buy you both a drink, he says. How about a Shanghai Surprise? Its a new creation and anyway, weve got lots of time before the A380 leaves. Norbert Aschenbrenner
The Long
Electronic transactions can be made using a wide range of processes some successful, others less so. In fact, companies are still investigating what form of digital money will be most acceptable to customers, how best to encrypt personal data, and which standard is likely to gain worldwide acceptance.
Road to
ldorado
search and Technology Management at the Ludwig-Maximilian University in Munich. But it was too complicated. People wanting to use the system to pay for goods online first had to identify themselves at the post office. Then they had to install special software, file a digital certificate and generate digital coins, which they sent to the bank. The bank validated the coins by debiting a corresponding sum from the users account and then sending the coins back. Basically, potential users had better things to do and gave the new digital money the cold shoulder. A similar fate befell CyberCoin, a rival product to CyberCash GmbH, at the end of 2000. Once again, the procedure was too complicated. Customers will only go to such trouble when they know that they are using an accepted form of payment, says Henkel. People just arent prepared to go through a complex procedure every time they want to
By the end of the 1990s, digital money seemed headed for a bright future, largely at the expense of bills and coins. Bank experts were already beginning to think up ways of how to control money supply in an economy in which cash would become peripheral (see Interview, page 44). But the initial euphoria has subsided. Although new electronic payment systems are continually finding their way to market, no system has made a breakthrough. For a while, it looked as though eCash the successor to DigiCash would make an impact on the German market. Although the digital money system from eCash-Technologies was backed by institutions such as Deutsche Bank, it never really caught on with customers and was discontinued in May of this year. Technologically speaking, it was a highly sophisticated process, says Dr. Joachim Henkel from the Institute for Innovation Re-
purchase something online. Henkel also claims that most people dont understand how digital money works. Thats not so surprising given that electronic money on a hard disk remains an exotic idea for many of us. Correspondingly, most e-commerce purchases in Germany still involve such standard procedures as cash on delivery or payment on account. Indeed, while U.S. and British citizens use credit cards to pay for 95 percent of all purchases on the Net, Germans tend to stop an online transaction when asked to enter a credit card number. One reason for this is anxiety about the safety of using credit cards for online purchases. According to estimates by the EU Commission, card fraud cost 600 million euros last year. Eurocard, a German credit card company, claims that the level of fraud in the Internet is ten times higher than in the rest of the market. Thats why online purchasers often see an onscreen symbol representing a key or a lock a sign that the data will be encrypted. In particular, the large online outlets provide SSL (secure sockets layer) encryption for online payments. This creates a relatively secure link, inaccessible to third parties, between the server and the customers PC. However, even this system has a substantial drawback: online traders have no way of checking whether customers have really entered their own personal data. Customers wishing to use the SET (secure electronic transaction) standard as developed by Visa and Mastercard must first obtain certification from their own bank. This comes in the form of a special encrypted electronic wallet, which is sent to the online outlet to pay for goods. With the current version of the SET standard, the electronic wallet is stored on the customers PC. In the future, however, plans call for this to be administered on a secure server. An even safer option would be to place the wallet on a special chipcard (SmartCard). But users would then need a card-reader, which currently costs around 100 euros. The security argument alone isnt enough to persuade people to buy one, says Knud Bhle, who monitors the development of electronic payment systems internationally at the Institute for Future Technological Research in the
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E-BUSINESS
International Activities in the Field of Electronic Money
Spanish city of Seville. Customers arent ready to pay for a card-reader yet. Henkel is also skeptical. Most people wouldnt even know how to install one, he said. Nevertheless, Bhle believes that SmartCards will boost online business in the medium term. His optimism is based on the fact that planning for the introduction of such cards is well underway. By 2005 at the latest, all credit cards will be fitted with microchips for encrypting data. That will give people an
Internet Purchasing Power
1999
7 million online purchasers Average annual volume of purchases: 490 euros 72 million Europeans online
9% purchasers
2004
Source: Forrester Research, Inc.
65% purchasers
131 million online purchasers Average annual volume of purchases: 1774 euros
201 million Europeans online
According to a study by Forrester Research, the number of online purchasers in Europe will rise sharply in coming years. By 2004, some twothirds of Internet users will probably buy goods via the Web with a PC, cell phone, PDA or TV. On average, they will spend 1,774 euros a year a powerful argument for developing electronic payment systems.
incentive to install a card-reader in their PCs, says Bhle. He also believes that the government could promote acceptance by allowing people to sign their tax returns with a digital signature and submit it by e-mail. German legislation on digital signatures has already created the basis for online dealings with public authorities. A 1997 law was conceived to give digital signatures the status of a supplementary ID card. In May 2001, German law was modified to conform to EU guidelines introduced in January 2000 for a European-wide standard in this area. Use of an electronic signature, for example, makes it possible to determine whether a text has been manipulated during its journey through a data network. However, hackers still manage to crack even the most secure software with the help of so-called Trojan Horses. Therefore, it will be some time before you can send your attorney sensitive documents via e-mail. Paying small amounts of money via the Internet is much less problematic. Indeed, as soon as PC-based card-readers become standard, special cashcards will provide a convenient way of making micropayments. In Sweden, Finland and Belgium, for example, it is already possible to reload a SmartCard via the Internet and then use it for online purchases. In contrast, this feature is barely used in normal retailing in Germany, where some 20 million cards with a rechargeable wallet function are in circulation. Part of the problem is that too few outlets accept the cards, and with 20 different, incompatible systems throughout Europe, standardization remains a problem. For instance, its impossible to reload a German card from a Spanish cashcard terminal a frustrating experience for tourists. Experts are forecasting a bright future for billing systems. Here, users first install a special software program that enables them to make small payment transactions using a computer mouse. The amount is then charged to the customers telephone bill, to the bill from their Internet provider, or to some other established account, says Bhle, adding however, that New firms are at a disadvantage here, since they first have to develop a relationship with the customer. Such a billing system is offered by In Medias Res.
The companys product, Net900, is licensed to Deutsche Telekom, which uses it under the name of Click & Pay net900. Even simpler are prepaid Internet cards such as the Paysafecard, which is designed to make online payments not only safe but also anonymous. Not surprisingly, such cards are principally used to pay for Internet pornography. As a rule, the cards incorporate a secret number, which users first have to scratch free. This is then entered into the online payment form. A PIN code is also required in some cases. The central computer at Paysafecard checks to see if the balance credited to the secret number covers the purchase. This fall, DeTe CardService, a Deutsche Telekom subsidiary, will launch a rival card known as MicroMoney. But such payment systems have a big drawback, as card suppliers generally charge online retailers a fee of five to 35 percent per transaction. In the future, cell phones could also replace small change. In Finland, they can already be used to purchase drinks from vending machines or to pay at the laundromat. There are also various cell phone-supported payment procedures in Germany. With the Paybox system, for instance, customers provide their cell phone number with their order. The retailer communicates this number and the amount due to Paybox. Within seconds, the customer receives a call and is asked to enter a PIN code to confirm the purchase. Finally, Paybox withdraws the sum from the customers account and transfers it to the retailer. Here again, too few retailers have shown an interest in using the system. Meanwhile, engineers continue to work intensively on new systems. In France, some cell phones from Motorola and Sagem are fitted with a second slot for a special chipcard to be used for payment. Another variant has the SmartCard already integrated into the cell phone. Bhle is now working with Visa and Nokia to test such a model. If we can speed up the payment process and increase the number of businesses that accept the system, cell phones could become an everyday method of payment, says Bhle. One day, well be able to transfer money simply by pushing a button. Gven Purtul
Money Talks
The old expression money talks is truer than ever. A split second after you drop a coin into one of the latest pay phones or vending machines, it tells it all. Size? Weight? Magnetic properties? Speed? Impact sound? You name it. In all, explains Francisco Ibaez, R&D Director of Siemens Elasa in Zaragoza, Spain, the world's biggest producer of public telephones, coins have to run a gauntlet of 22 validation parameters before passing muster. That may sound pretty tough, but counterfeiters still aren't licked. Now, with the impending introduction of the euro probably the most technically advanced metal currency ever produced and a new system from Siemens Elasa that updates the coin validation software in public phones, counterfeiters may finally have to call it quits. The 1- and 2-euro coins, for instance, will have such a complex inner structure that, once dropped in a pay phone, their unique signatures will be nearly impossible to duplicate. Great, but how are telephones that are used to gulping Deutsche Marks and Drachmas suddenly supposed to acquire a taste for euros and know which is which not to mention identify fakes? After all, as of January 1, 2002, pay phones throughout Europe will have to accept euro coins in addition to national currencies, and by March 1 they will have to go on an all-euro diet. The answer, says Ibaez, is a unique feature developed by his team that allows service providers to teleprogram the latest phones for new coins. The provider, whether its Italy's Italtel or Spain's Telfonica, will simply feed the new validation parameters simultaneously into tens of thousands of public phones, which are now being produced at a rate of 500 per day at Elasa. The program can also be used to fine tune the parameters used for accepting existing coins in order to make them even more proficient at recognizing fakes. And what about the so-called cashless economy? Hogwash! says Ibaez. We see that where there are phones that offer coin and card payment systems, eighty percent of payments are made with coins. Evidently, money will continue to talk at least for a few more years. Arthur F. Pease
Tomorrow's pay phone. Siemens Elasa is now testing its WebPhone. Outfitted with a 12 tempered glass monitor, built-in video camera, ADSL line, and the latest payment validation technology, the phone is designed to provide what cell phones can't and to reverse declining use of public phones.
Inside the New Euro Coins

Nickel-brass Nickel Copper-nickel alloy
What Sensors Will See

Microphone (1 sensor) Optical sensors (2) Four magnetic sensors measure the multiple layers
Rolling coins
Special magnetic sensors investigate the outer ring of the coins (2 sensors)
1- and 2-euro coins will be composed of a refined combination of metals. The bimetallic nature of the outer zone and the center, along with the coins multilayer structure, makes it easy to definitively identify the coins. This will reduce the chances that fakes will be accepted by vending machines and pay phones.
It will be almost impossible to fool the euro sensors in new vending machines and pay phones. Sensors not only will monitor the sounds coins make, but will also check their optical properties and distinguish the magnetic differences between the edges and centers of the coins.
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Infineon's FingerTIP sensors are the only microchips designed to be touched after all, theyre there to check your fingerprint.
Paying With Your
Fingertips
works as follows: A payment service provider a cell phone operator, bank or other financial services company, for example creates a special account for the user, who can administer and replenish it at any time using the Internet or a cell phone. Users can make online purchases via cell phone, play lotto or even transfer a sum of money to another cell phone. In each case, the transaction is set in motion by the simple push of a button. For reasons of convenience, small amounts can be transferred without a security check, whereas larger sums the user stipulates
How can cell phones be used to pay bills in a fast and simple way? What features will determine the success or failure of the SmartCard? Will we be using fingerprint ID systems in the future to authorize payments? Whats the best way to encrypt an electronic signature? Siemens and Infineon are working on the answers to these questions and many more.
In the future, we will be able to do many things with our cell phones. But whether downloading a song from the Internet, calling up stock market information, looking at a city map, or just playing a hand of blackjack online the success of mobile services will greatly depend on how secure, convenient and affordable the method to payment is. Today, the problem is a shortage of fast, economical and secure payment procedures for online transactions. Siemens Information and Communication Mobile (ICM) has therefore joined forces with Stuttgart-based Brokat to develop a system that debit amounts ranging from thousands of Euros to just a few cents. Known as Pay@Once, the new system
the threshold require a PIN code. A lack of standardization and common interfaces has thus far hindered the development of inexpensive billing procedures that can function among the various systems at different companies. A team under the direction of HansHermann Wolf, head of Business Development Cooperations at ICM, has therefore been working on API, a software interface for payment procedures. Siemens has also launched an initial cooperative venture with Hewlett-Packard, that offers a special platform for the development of new electronic services and marketplaces that is freely accessible to all programmers. With HewlettPackards E-Speak application, different types of online services can be linked. This means, for example, that a company providing online games would be able to send a free game voucher in a short text message to the cell phones of loyal customers. The interface to E-Speak is, however, only the beginning. Siemens and Hewlett-Packard have also set up a consortium known as the Payment Group, which will develop a standard interface for mobile payment transactions. Were holding talks with all the big names in this sector, says Wolf. But its not enough to develop mobile applications and payment procedures compatible with various systems. Crucial, too, is to ensure that they are accepted by customers. Thats why Rainer Jaschhof and Dr. Axel Findling from Voice Data Integration Projects at ICM are working on a range of scenarios for making Pay@Once as simple and convenient as possible. In the electronic world, where an online customer might download, say, an MP3 song, the easiest way to handle identification and payment is on the basis of the customers cell phone number. In the real world, transponders might also be used. Each of these tiny microchips has a globally unique code that can be transmitted to a receiver via radio. They thus provide a simple means of identification for initiating a payment transaction. The devices can be integrated into a chip card, key-ring, wristwatch or cell phone. Anyone wishing to purchase an item from a vending machine, for example, would
simply hold his or her transponder near the machines reader unit. The amount of the purchase would then be automatically debited from a prepaid account. Of course, the vending machine would have to be connected to Pay@Once via a mobile radio operator. Such a scenario can be varied at will. Moviegoers, for example, could use the system to reserve and pay for tickets in advance. At the entrance to the movie theater, customers would simply point their transponder at the reader unit, and a seat number would be displayed and a ticket automatically printed. As an alternative to the cell phone, chip cards could also be used to make electronic payments. Known as SmartCards, these minicomputers come with a processor, RAM and up to 128 megabyte of permanent memory. They are so powerful that they will soon be able to support several applications, so that one and the same card might serve as an ATM card, credit card, drivers license, and electronic wallet. Although the Euro will give us a unified currency throughout much of Europe, the problem is that the various platforms in individual countries remain different, explains Marina Mutapcic, who is in charge of payment systems and e-business applications at the Chipcard ICs business unit at Infineon Technologies AG. Imagine traveling by train from Munich to Paris with an electronic ticket loaded onto your chip card. To be able to read the card on both sides of the border, rail operators would need to use standardized infrastructure and operating systems. Thats why Infineon has joined forces with other industry leaders to support a range of open standards, such as the Multos (Multi-Application Operating System for SmartCards) and JavaCard, a kind of Linux for chip cards. A European-wide standard still also has to be established for the Geldkarte (cash card) before it can be used throughout the continent. Crucial to all such standards are the issues of data security and encryption procedures. All confidential data stored on chip cards including those that function without any contact must be perfectly secure against forgery, theft etc.
There are a number of pilot projects now under way for testing non-contact chip cards as electronic tickets in local public transport systems, for example (see page 62). There are also plans to use the same contactless technology for cash cards. Reloading such a card with more money would then take only a fraction of a second, says Mutapcic. Ultimately, chip cards will develop into genuine systems on a card, capable of independently processing operations such as authentication, identification, and information display. Indeed, there are already initial prototypes capable of displaying the current balance on a Geldkarte.
Fingerprint identification. SmartCards are still too thick to fit into ATMs, but thinner ones are on the way.
The next step might be to integrate a scroll button onto a card, says Mutapcic. This could provide access to a record of previous transactions conducted with the card. Somewhere further down the line is the idea of integrating a special sensor that would enable cardholders to voice-activate different functions. Then, for example, the spoken command Bank would eliminate the need to scroll down through the card display to the corresponding application. Very much a reality, on the other hand, is a biometric sensor known as FingerTIP, which Infineon already produces. The sensor is used to authorize access to a computer mouse, for example, and the company also plans to integrate it into a chip card. FingerTIP, as the name suggests, is able to identify a person
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on the basis of his or her fingerprint. All thats needed is for users to place their fingertips on a special chip consisting of 65,000 tiny capacitive sensors. These can measure the exact distance between the surface of the chip and the skin. This information is used to determine the precise pattern of the grooves on the fingertip; the resulting data is compared with reference data encrypted on the card. Were now working on a project to put a FingerTIP sensor thats 30 micrometers thick onto a standard-format chip card, Mutapcic explains. The problem with current cards featuring the FingerTIP sensor is that they are still too thick to fit into the slot of a normal card reader. When fitted in a cell phone, the FingerTIP sensor can also be combined with another biometric technology voice recognition. According to Dr. Bernhard Kmmerer, head of the Center for Human-Machine Interaction at Siemens Corporate Technology in Munich, the use of multiple biometry will not only
E: y2=x3+ax+bmodp with a=2 b=98041560852373919804497702945164778239981033357 p=1461501637330902700854608783655214859383685196123 consisting of 10146150163733090270085460620150685408864185482153 points.
At the same key length, data-encryption using elliptical curves offers a much higher level of security than the conventional RSA method, which is based on resolving the product of two large prime numbers into its constituent factors. Equivalent protection can thus be achieved with a much shorter key, which means more efficient encryption and faster data transmission.
ePayments: Welcome to the Virtual In-House Bank

Developed by Siemens Financial Services (SFS), ePayments is a virtual bank that enables medium-sized, internationally operating companies to process all their payments via the Internet using standards that are uniform worldwide. The system utilizes the UN / EDIFACT data format that is well known to experts. Users dont have to worry about either interfaces or complicated converters. Customers can generate payment orders directly in their Web browsers, append an electronic signature and dispatch it, via a secure data link, to the virtual bank. The great thing about the system is that with internal company payments, the entire process from drawing up the payment order to recording that the payment has been processed is fully automatic, and thats e-business par excellence! says Willibald Schmeiser, head of Cash Management Solutions at SFS. Siemens has been using the system with great success for a number of years and has likely achieved a unique level of automation in this field. Today, Siemens companies worldwide process internal payments exclusively with the ePayments system -- an annual volume in excess of 60 billion euros a year. One major benefit is that the company can avoid expensive foreign transfers. Instead of having to use correspondent banks to make cross-border payments, it can use its own accounts at the virtual bank. Actual processing of the payment occurs in the country where the recipient is based a procedure that translates into substantial savings. In addition, ePayments also serves as a global liquidity management and payment authorization system as well as an account management system able to calculate accrued interest. Account holders worldwide have access to account information via the intranet or the Internet, where full functionality will be achieved by the end of this year. At that point, Schmeiser would like to market the ePayments system to external customers. Acting as an application service provider, Siemens would then be able to offer medium-sized companies a range of services such as cash management, management of internal and external payments, and management of internal bank accounts. Whats more, such services would be provided with a level of simplicity and functionality that is as yet unavailable on the market.
Siemens' Virtual Touchscreen is able to recognize the contours of hands and fingers. As such, it offers a new way of authorizing access to public terminals.
boost security but also make mobile terminals more user-friendly. With the help of the FingerTIP sensor, for example, authorization to use a cell phone could be regulated
B2B: Checking Customer Credit Ratings Online

While many private purchases on the Internet are paid for by credit card, payment in the business-to-business (B2B) segment generally still occurs offline. As a rule, bills are printed out on paper and delivered to purchasers. In Europe, we still dont have uniform e-business procedures in the area of company finances," says Martin Breuer, head of Marketing & Sales at Siemens Financial Services (SFS). Capaxx, a new service and software package developed by SFS, will change all that. It consists of three main components: online credit rating, confirmation of financing, and inexpensive processing. Capaxx checks out the purchasers creditworthiness just seconds after an online order is made via an electronic marketplace. Here, SFS employs its own database, which uses information on around 300,000 Siemens customers worldwide and receives all the latest online updates from credit inquiry agencies. The system first decides upon the creditworthiness of the purchaser, Breuer explains, then, if there are no problems, it issues the seller confirmation that the order will be financed up to a total of 1.5 million euros. Capaxx, the worlds first fully automatic online credit-rating system, is now being tested at an electronic marketplace known as Vertacross. Meanwhile, Breuer is busy developing additional applications. In the future, for example, customers will themselves be able to stipulate the terms of the financing deal and the grace period. Capaxx may also have a future in the areas of leasing and mobile payments. Here, cell phone operators could use the system to check customers creditworthiness and manage outstanding debts.
quickly and conveniently by means of a fingerprint check. Access to an electronic wallet could also be controlled through an additional method, thereby offering even greater security. One possibility here would be to have users identify themselves through their voice by repeating numbers generated at random, says Kmmerer. This would protect the system against fraud through tape recordings. Verification would then proceed on the basis of the pattern of sounds produced, with the reference data encrypted on a chip integrated into the cell phone. For ATMs or vending machines in public places, however, such a method is prone to disturbance from background noise. An alternative would be biometric recognition using the contours of the palm and fingers. Kmmerers method here is based on Siemens' Virtual Touchscreen a computer fitted with a tiny camera that enables it to recognize hand gestures. This means the users hand can be positioned at will on the screen. And to ensure that the system cant be outwitted by a wax imprint, users are also required to open and close their hands. We thus have a groundbreaking approach in the field of dynamic hand-contour recognition technology, says Kmmerer. But it does demand a lot of processing power, as the system also has to take account of variations in the position of the fingers. To work properly,
the ATM would have to be equipped with a computer powerful enough to undertake such an analysis and then compare the result with reference data stored on the users SmartCard. Encryption is not only relevant for personal information on SmartCards or biometric data for authorization. To ensure that a payment order whether by cell phone or SmartCard is properly and securely processed, an electronic signature must be appended to the data involved. Here, Dr. Heribert Peuckert, head of the Center for Security at Siemens Corporate Technology, has more to offer than the protection provided by the conventional RSA method, which most encryption keys are still based on. Some 20 years old, the RSA method requires the resolution of the product of two very large prime numbers into its constituent factors. Were working on second generation asymmetrical cryptographic methods, says Peuckert. Such procedures are based on elliptical curves, which offer a much higher level of security at a shorter key length than RSA methods. Were in a permanent battle with hackers, Peuckert says. At present, RSA encryption with a 1,024-bit key is regarded as secure, but our method can achieve the same level of protection with just 160 bits. On the Internet, a 512-bit RSA key was recently cracked with the help of parallel-computers, and ex-
perts are predicting that even 1,024-bit RSA keys will cease to offer sufficient protection in a few years. At that point, 2,048-bit technology will be required. Unlike RSA keys, the level of security offered by elliptical curves increases exponentially with bit-length, says Dr. Erwin Hess, an encryption expert on Peuckerts team. For example, an elliptical key 200 bits in length will provide the same security as a 2,048-bit RSA key. Similarly, elliptical keys 256 and 512 bits long would offer the equivalent of a 3,000 or 15,000-bit RSA key. Substantially shorter as they are, such elliptical keys not only require
less memory but also lead to much faster ways of encrypting or electronically signing messages. In addition, the size of the electronic signature always corresponds to the bit-length of the key with which it was generated. The result is that transmission of a digital signature based on elliptical curves involves a smaller volume of data. As with the recent technological advances in cell phones, SmartCards and biometric technology, the development of such security procedures indicates that digital money could be in for a bright future despite today's teething troubles. Michael Lang
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B2B Sales by Region in Billions of US$

4,000 3,500 3,600 2000 3,000 2,500 2,000 1,500 1,000 500 0 North America Asia/Pacific 480 255 96.8 220 72.5 188 Europe
Source: Gartner Group 2001
Internet Commerce is
Boosting Demand
Electronic money is really nothing new. Money was already being wired by telegraph in the 19th century. What's different today? Electronic money in the sense of a wire transfer has, in fact, existed for a long time. But that only involves access to credit balances at a bank. In other words, were talking about the transfer of money on account or deposit money. Something similar occurs with a credit card or a bank transfer. Today, the term e-money means something different namely a unit of value that is stored on a particular medium and can be used for all kinds of payments. Its actually a completely new form of money that supplements cash and money on account. The units of value on the storage medium act as a pre-paid bearer instrument. Value is transferred from chip (or hard disk) to chip (or hard disk). It is no longer merely the transfer of information used to settle accounts. Instead, purchasing power is embodied in the electronic units. And that is completely new. What forms does e-money take? For a start, there is card-based e-money. The European Central Bank defines this as plastic cards (SmartCards) whose chips store real purchasing power, paid for by the customer in advance. In other words, its a type of electronic wallet. There is also softwarebased e-money, which involves special PC software. Here, the electronically stored units of value are transmitted via telecommunications networks like the Internet or mobile radio networks for cell phones. Cards are not involved in the process. In principle, though, card-readers can be used to turn card-based money into a means of payment on the Internet. Net money refers to any type of e-money that is transferred through
networks, meaning it can be card-based or software-based. In the future, such distinctions will become increasingly blurred. It would therefore be best to speak simply of e-money. What are the advantages and disadvantages of e-money? E-money definitely facilitates payment in certain areas. It can be used to pay small amounts economically, but without the need for cash in retail stores or at automatic vending machines, for example. Although credit or debit cards (such as the EC card) are also suitable for this purpose, their use is too costly for payments of just a few euros. Another key area is the Internet, where payments of very small amounts could experience a strong upturn, as people can pay anonymously in a simple manner. Of course, e-money harbors risks as well. Like cash, it can be lost or destroyed. It also gives rise to a new type of counterfeiting risk. Whereas counterfeit cash can ultimately be identified by the central bank, electronic units of value could be copied illegally. Afterwards, it might not be possible to identify them as counterfeit. Other disadvantages arise from possible malfunctions of the system if the card doesnt work properly, for example. Issuers of e-money could also go bankrupt, of course, which would reduce consumer confidence. Initial experience with electronic money has shown that developments have thus far taken a rather subdued course. Why? As I said before, e-money is particularly suitable for very small payments. In the case of larger amounts, only payments through banks offer sufficient security. E-money is also a typical network product. As a result, the utility for the individual increases with the total number of users (as with telephones). A critical mass must be reached, and this has not yet happened. There simply arent enough users and acceptors of e-money in other words, customers and merchants. In addition, people tend to change their payment habits only gradually.
2001
2005
2,408
1,700
for E-Money
Hans Bauer, a director at Germanys Bundesbank, began working at the Frankfurt-based central bank in 1979. Since 1990, he has been in charge of credit sector analyses. Besides dealing with bank business structures and earnings trends, he handles the monetary policy aspects of banking supervision and payment transactions.*
(*This interview reflects the personal opinions of Mr. Bauer, which may not necessarily reflect the view of the Bundesbank in each case.)
B2C E-commerce Sales in the U.S. (in Billions of US$)

7 6.4 6 2000 5
Source: Forrester Research/NRF
6.2
2001 4 4 4.2 4.2 4.4
4 2.8 3 2 1 0 3 Jan 3.4 Feb Mar Apr May 2.4 3 3.3 3.4
Jun
Jul
Aug
Sep
Oct
Nov
Dec
What percentage of monetary transactions are already conducted electronically, and how will things develop? The following figures are for e-money excluding the electronic transfer of money on account. In June 2001, the volume of emoney in Germany was 62 million euros. In the EU, it was 140 million euros in mid2000, which corresponded to 0.04 percent of all cash in circulation. It is difficult to make forecasts. I do expect, however, an increase, although its not possible to predict how rapid this increase will be. The most important factors here are the fee and cost structures in comparison with other methods of payment in other words, what a credit card transaction or a cash withdrawal costs. The more expensive those are, the more attractive e-money will become. But emoney already costs something too. There is a fee for the loading process and one for the merchant for every e-money transaction. Does electronic commerce on the Internet offer new opportunities? According to a
The growth of e-business, whether as business-to-consumer (B2C) or as business-to-business (B2B) transactions, is accelerating the introduction of e-money. As the lower diagram shows, B2C sales in the U.S. continue to grow despite the collapse of the New Economy.
well-known study of future trends, the Delphi Report, electronic money will play a crucial role as a means of payment in multimedia networks by 2007. I dont know whether the Delphi Report defines e-money in exactly the same way we do. But there is one assumption I share. If business on the Internet increases, e-money will be used to a greater extent to make payments, at least for small amounts. But even then, the majority of payments on the Internet will presumably continue to be made with money on account. Once again, were dealing with a question of cost and benefit. When an e-money system is installed, high fixed costs are initially incurred. But the marginal costs are very low. The more people in-
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I n
of it to credit institutions and implementing a system of continual monitoring. But convenience is very important as well. The easier it is to transfer e-money, the more it will be used for payment on the Internet. Computers equipped with scanning devices have an important role to play here. Could control over money be taken from the banks? Would companies be able to, in effect, print their own money? In Germany, the right to issue e-money is restricted to banks. At the EU level, non-bank enterprises are also allowed to issue emoney, but are then subject to the regulations of the banking supervisory authorities. They are thus designated as credit institutions, with all the consequences. Obligations involved cover many areas, including reporting, supervision, minimum reserves, the exchange of e-money back into central bank money, as well as direct refinancing at the central bank. What impact will e-money have on central banks? If the demand for cash declines because it is being replaced by e-money, the dependence of the credit institutions on refinancing from the central banks will decrease. This would limit the central banks ability to set and enforce money market interest rates. On the other hand, cash is already being replaced by money on account to a great extent, without any lasting disruption of monetary policy. Furthermore, the minimum reserve requirement also has a big effect on deposits. This rate is currently two percent for money on account, and could be raised if the volume of cash in circulation should decline sharply. In this way, the demand for central bank money could be artificially increased. Another result of e-money could be increased volatility in the growth of the money supply, in other words, unexpected changes in the circulation velocity of money. But the volume of e-money is still much too small for it to present a problem for central banks. Nevertheless, they are watching developments very closely. Interview conducted by Sylvia Trage
B r i e f
The evolution of electronic payment is being influenced by many factors. One of these is the sharp increase in electronic commerce; others include new technical solutions, such as those for secure data transmission. No fixed standards for electronic payment systems have been established yet, however, and many experts remain convinced that e-money will never completely replace cash. But it will make payment easier and be very useful in certain applications, such as payments on the Internet or at vending machines. In general, the acceptance of e-money will ultimately depend to a large degree on how simple, convenient and secure it is and on the level of costs incurred. Generally, a distinction is made between card-based e-money (i.e. SmartCards serving as electronic wallets), and software-based e-money. In the case of the latter, the units of value are transmitted in encrypted form directly via the Internet or cell phone networks. The use of all these methods will increase significantly over the next few years, whether in the form of prepaid cards, SmartCards with microchips for encryption, card-readers for payment on the Internet, or a multitude of payment processes for cell phones. CONTACTS Siemens AG Rainer Jaschhof, ICM Fax: +49 89 636 40524 Rainer.Jaschhof@icn.siemens.de Dr. Bernhard Kmmerer, CT Fax: +49 89 636 49802 bernhard.kaemmerer@mchp. siemens.de Dr. Heribert Peuckert, CT Fax: +49 89 636 48000 heribert.peuckert@mchp.siemens.de Hans-Hermann Wolf, ICM Fax: +49 89 636 41548 hans.wolf@icn.siemens.de Infineon Technologies AG Marina Mutapcic Marina.Mutapcic@infineon.com Deutsche Bundesbank Hans Bauer Fax: +49 69 560 10 71 hans.bauer@bundesbank.de LINKS Siemens Financial Services: www.sfs.siemens.de Siemens Mobile payment methods: www.siemens-mobile.de/pages/ payment Capaxx: www.capaxx.de FingerTIP sensor: www.infineon.com/fingertip FingerTIP applications: www.fingertip.de/default.asp?lang=eng Companies with e-money solutions: www.cybercash.com www.digicash.com www.webtrade.net Overview of electronic payment systems: www.iww.uni-karlsruhe.de/IZV4/ Infoseiten/infosys.html www.verkauf-aktuell.de/ fb0605.htm www.vivowallet.com European Central Bank report on electronic money (1998) (German only): www.bundesbank.de/ezb/de/ publications/pdf/e_geld.pdf Articles with further information: w4.siemens.com/e-desk
volved, the more profitable it becomes. Theoretically, the potential for expansion is very high, because e-money is attractive for everyone for the banks, since the costs of cash handling are eliminated; for merchants, who no longer incur the costs for using and storing cash; and for the customer, who doesnt have to worry about having enough money or the right amount of change. It is hardly possible to conceive of economic life today without cash. Yet, the Bank of Finland has published an opinion poll showing that one out of every three persons believes that e-money will replace cash by 2010. What do you think? I dont think that e-money will one day replace cash entirely. At most, it will replace it to a certain extent, perhaps more so coins than bank notes. The reasons for this have to do with the unique properties of cash, which are as yet unsurpassed. Cash is legal tender; there is an obligation to accept it; it is widely circulated and absolutely anonymous. To some extent, innovations also have a cannibalistic effect, in that they replace not only cash but also other instruments of cashless payment. Net money, for example, could partially replace the credit card as a means of payment on the Internet. Moreover, it is becoming more and more popular to pay with the EC Card as a debit card, a development that will probably reduce the future role of cash or e-money.
E-Money is attractive for merchants, banks and customers

Will there be differences between business-to-business, so-called B2B transactions, and the private use of e-money? I see fewer applications in B2B than in the case of private persons. Payments between companies are already carried out electronically to a very large extent, but not in the sense of our e-money definition. E-money will be used more in the private sphere, from parking lot management and local public transportation to the complete range of vending machine payments. If you pay for your bus ticket with e-money, for example, you dont have to go digging for change. Paying becomes simpler and more convenient. And discounts are already being offered. For example, E-Geldkarte users can get a ten percent discount in some parking garages in Frankfurt. Special discounts of this kind can definitely serve as incentives for using e-money. In addition, programs and services obtained via the Internet will probably not be free in the future. This would be another economically viable field of application for e-money. How great is the risk of misuse? Theoretically, e-money could be used for money laundering or tax evasion. But these risks can be limited by maintaining a bookkeeping log of the payments. In other words, there wont be complete anonymity. Another option is allowing only small amounts to be loaded and transferred, or restricting direct transfers between private persons. All of this is currently possible. But isnt there perhaps the danger of a buyer without secrets? Its almost impossible to achieve both complete security and complete anonymity in an e-money system. The more anonymously a system is structured, the greater the risks are, and vice-versa. In current e-money systems, it is possible to identify the participants, since shadow accounting is normally conducted. But a bank as an issuer of e-money will hardly be interested in where the owner of a certain card has parked his or her car. If, however, more e-money than was previously loaded onto a card flows back from acceptors, then the bank will really want to know who the card owner is. Obviously, someone has succeeded in breaking through the security measures. Here, entries in shadow accounts help to increase security and avoid fraud. And thats in the interest of the buyer as well. How can confidence in e-money be enhanced? The security and reliability of e-money are best guaranteed by restricting the issuance
In order to develop international standards for payment via cell phone, Siemens and Hewlett Packard have established a consortium, known as the Payment Group. Together with other major companies in the industry, Infineon also supports various open standards.
Number of Cards per Capita (1999)

Cards with cash function Cards with credit/debit function Customer cards
3
2.7 2.4 2.0 1.5 1.2 1.3 1.1 1.1 0.6 0.4 0.1 2.5
2.8
1.9
1
0.6 0.6 n. a. Japan 0.5
0
Germany Italy
n.a.
n.a. France
n.a. Switzerland
n.a. United Kingdom
n.a. Canada U.S.
46
Source: Bank of International Settlements
2.2
Many customers remain hesitant about paying for goods or services with e-money because of concerns about security. Indeed, according to an estimate by the EU Commission, fraud on the Internet was responsible for 600 million euros in damages last year in Europe alone. Siemens is working on a number of solutions to this security problem. These include voice identification of users in conjunction with cell phones, the analysis of hand contours at public terminals, and the use of Infineons FingerTIP sensor with SmartCards. Siemens is also developing an extremely secure method of data encryption based on so-called elliptical curves.
@
LITERATURE Peter Fingar, Harsha Kumar, Tarun Sharma, Enterprise E-Commerce, Meghan-Kiffer Press, January, 2000 Paul Richard May, The Business of E-Commerce: From Corporate Strategy to Technology (Breakthroughs in Application Development), March, 2000 Craig Fellenstein, Ron Wood Exploring E-Commerce, Global E-Business and E-Society, December, 1999
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C O O P E R A T I O N
S p e e c h
R e c o g n i t i o n
Wo yo chu zu che (I need a taxi!) says a businessman in Shanghai and his cell phone promptly dials the number of a taxi company. Science fiction? Not necessarily. Up until recently, speech recognition and speech synthesis only worked in conjunction with a few applications. Soon, however, they will revolutionize the operation of all kinds of devices. Just imagine: a brief spoken statement and your cell phone dials the desired number, your washing machine goes into action, or your television comes on already tuned to your favorite channel. To achieve this goal, researchers and developers have to register and process a huge amount of language-specific data, which they then use to adapt and perfect automatic speech recognition systems. And any company that wants to break into the Chinese market with its 1.3 billion consumers must at least analyze the complexities of Mandarin and Cantonese. Siemens is working with leading Chinese universities to drive things forward in this field, says Herbert Tropf, senior consultant at Corporate Technology in Munich and the prime initiator of the Chinese-German partnership. One of the main areas of interest is the further development of automatic speech recognition. Progress here is crucial not only for speech-driven teleservices such as fixed-line telephones, cell phones or Internet telephony, but also with regard to speech-driven interfaces for consumer applications such as televisions, washing machines or personal digital assistants. The second focus is on the development of automatic speech synthesis, especially a systems ability to read all kinds of texts in as natural a voice as possible. Neither of these things are
The Chinese message on the monitor says: "This is a Siemens speech recognition system."
easy, according to Tropf. Computer-based speech recognition is faced with the problem of the enormous range of dictions. In other words, the computer has to be able to deal with differences in both dialect and unclear pronunciation. The situation is further compounded by unavoidable ambient noise. As far as speech synthesis is concerned, we not only have to ensure comprehensibility; we also have to make sure that the computer-generated speech output sounds as natural as possible, explains Tropf. Theres little doubt that people are particularly sensitive and critical in this respect. Another factor that must be taken into account in Chinese are the different inflections in speech. Unlike Western languages, Chinese allows for changes in the meaning of a word through changes in the
process, language and speaker-specific peculiarities such as abnormal vocabulary or coughing noises were filtered out. The resulting speech database is currently being used by another group headed by Dr. Tao Jianhua at Tsinghua University in Beijing to adapt and optimize the key algorithms provided by Siemens for speech recognition and speech synthesis to the requirements of the Chinese language. Whats important here, says Tropf, is that the resulting algorithms are compatible with the hardware platforms in
tive to noise, Tropf adds. Otherwise we cant ensure optimum recognition, and the products error rate would be too high in noisy areas, such as busy streets. The Chinese-German partnership is based on close personal cooperation between some 20 scientists at Siemens and the two Chinese universities mentioned above. They communicate via e-mail, by telephone and, of course, face to face. Tropf, for example, comes to China once or twice a year, and a doctoral candidate from Tsinghua University also spent a research year in Germany. In addition, workshops are held in Shanghai, Beijing and Munich to promote the exchange of information. However, Tropf is also making use of research expertise from outside of Asia. In 1996, Siemens began to set up speech databases in
Mother, Curse or Horse? Its All a Matter of Tone

Chinese can be extremely complex to analyze. The meaning of the syllable ma depends on the tone in which it is spoken.
m a Mother
m Rough
ma Horse
m Curse
ma question indicator
My Phone Understands
Chinese
As in many other areas of work, research benefits from the pooling of resources. Thats why Siemens works with universities in the field of speech recognition systems.
partners from around the world. One example is the companys partnership with Shanghais Jiao-Tong and Beijings Tsinghua
tone in which it is pronounced. The current state of both speech recognition and speech synthesis is characterized by the use of datadriven, non-rule based approaches. In other words, researchers and developers are relying on speech databases. Thats why the initial focus of the ChineseGerman partnership is on a collection of speech samples, starting with the application area of telephony. To this end, Prof. Li Zhi-Zhu and his group at Shanghais Jiao-Tong University (SJTU) recorded approximately 10,000 speakers from all Chinese provinces via telephone using a telephone server. All of these recordings were painstakingly analyzed by students and then phonetically transcribed. During this
the corresponding products like cell phones, for example and that they require only very little memory. The speech database for Mandarin has already been completed and the corresponding speech recognition algorithms are expected to be available before the end of this year. SJTU is currently collecting additional speech data from about 2000 Cantonesespeaking Chinese citizens. Cantonese is spoken mainly in southern China, and in Canton and Hong Kong in particular. Phonetic lexica dictionaries with phonetic transcriptions for Mandarin and Cantonese are essential for the success of a product. We also need improved phonetic models and algorithms for speech recognition that are not as sensi-
EU-subsidized projects with partners such as Philips, Ericsson, Nokia and IBM. Here too, the aim was to register all languages and dialects in Western Europe as well as the most important Eastern European languages. Since then, activities have been extended to include other regions such as the Arabian Peninsula and the Far East. When all these projects are completed, well have an international network of expertise for the automatic processing of spoken commands, says Tropf. In fact, he even goes so far as to make a bold prediction: In the medium to long term, the main focus of speech recognition and speech synthesis research will be the automatic translation of the spoken word. Sylvia Trage
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AGENTS, BOTS AND AVATARS
In the Year 2015
scenario
In the networked world of the year 2015, intelligent software units known as software agents will make life easier for humans by relieving them of routine tasks.
Special Agents
of the Future
Munich, October 2015: Good morning, sorry to disturb you! Michael Schneider rolls over and begins to wake up slowly. The voice repeats itself, this time in a more pressing tone. What do you think youre doing, Ernie, didnt I tell you not to wake me before seven? says the architect. Its only fivethirty. He turns over and closes his eyes again. Im sorry, says Schneiders service robot, who bears a striking resemblance to R2D2 from Star Wars, but our news agent informed me that pilots will be on strike at the airport today, so I instructed your travel agent to rebook your flight to Dsseldorf as a train ticket and postpone your presentation for two hours. Your luggage is already on its way to the train station, a taxi will be here at seven o clock, your electronic train ticket is reserved and your breakfast is ready. Schneider checks his papers again while eating breakfast. The El Greco painting View of Toledo on the wall suddenly disappears, to be replaced by the steel skeleton of a 20story building. The painting a flexible luminescent polymer is in fact an electronic display unit, which now shows pictures of the building during various stages of construction, culminating in a picture of the finished building with a glass facade. Now the hologram, says Schneider, and suddenly a three-dimensional miniature CAD image of the building appears two meters away from Schneiders table. Colored lines show the frame of a filigreed construction that slowly turns on its axis. Up, says Schneider. All of a sudden, it becomes clear that the eight-sided
In the near future, maybe by 2015, everything from home appliances to personal robots will be networked. The key to universal networking will be invisible software agents. They will ensure that devices exchange and filter information, work with each other, and be available around the clock from any location.
2015
50
51
AGENTS, BOTS AND AVATARS
In the Year 2015
scenario
building is actually hollow in its core. The inner courtyard basks in pleasant sunshine. It even turns out that the top floor contains a roof garden. Your taxi will be here in approximately five minutes, says Ernie. Please dont forget that tomorrow is your mothers birthday, and that a table at her favorite restaurant has been reserved for nine o clock in the evening. The flowers have already been ordered; the only thing left for you to do is pick out the present. Okay, and dont forget that the auctions today and I want to buy that rare Who album, says Schneider, as he slips his personal digital assistant (PDA) into his pocket. And remember, dont go over the limit. The auction agent has already been programmed, Ernie reassures him. After climbing into the taxi, Schneider inserts the PDA into the back-
Are Agents for Real?

The automated, computer-networked world of the year 2015 is not a farfetched fantasy. The World Wide Web is one of the driving forces behind this development, and information content on the Internet already by far exceeds that which is contained in every library in the world. Experts believe that the Internet will develop into an inexhaustible source of knowledge in the next ten years, linking people around the world in an information network. It will then be possible for the inhabitants of the Global Village to communicate from any place and at anytime. In view of this, it is only logical to make use of a technology that can automatically process all of the world's distributed data. This involves socalled software agents intelligent computer programs that know their users needs and preferences and can support them in their daily activities, or even serve as personal representatives. Such assistants will plan trips, reserve rental cars, bid at auctions, help job-seekers find employment, and ensure that industrial facilities and shipping fleets make optimal use of their capacity. They will do all this completely autonomously after being commissioned to do so by their users. Companies will be able to automate a range of activities, such as brokerage services, financial administration and customer service, thereby reducing costs and boosting efficiency. Internet surfers, conference participants, or sales consultants who are unable to be present at a specific location will send their avatars out into the computer networks, where they will conduct chats, advise customers in virtual showrooms, negotiate with business partners, play with children or purchase clothing. Use of such avatar technologies and content management systems will make it possible to enhance virtual spaces with almost unlimited amounts of additional individual data. Service robots are no utopian vision. After all, they're about 90 percent software. When equipped with the appropriate radio technology, they are capable of exchanging their knowledge with other systems. Nevertheless, it will be quite some time before we will see an intelligent electronic butler like Ernie, who can foresee developments and react in advance. One big challenge in this respect has to do with language recognition. Our everyday speech patterns, common sense, and methods of reasoning are so complex that it will be a long time before scientists can develop programs capable of producing the required results.
rest console behind the passenger seat. In a matter of seconds, Ernies virtual incarnation turns up on the monitor in the form of an avatar (see page 56) and reads Schneider the latest sports news. Schneiders train is already waiting to depart at Munich Central Station. He settles into his compartment in the ICE 4 and takes out his laptop. Before turning to his current project, he books a two-week vacation in Tuscany through his travel agent a present sure to please his mother. Later, while skimming through his video mails, he comes upon a message from his business partner in Dsseldorf. A change has been made to the design of the building. Schneiders personal agent has already been informed, a fact confirmed when Schneider checks the plans again and sees they have already been updated. Immediately afterwards, Schneiders email assistant informs him that an urgent message has been received from the construction foreman: Three specialists called in sick, a pipe has burst and water is leaking into the basement we cant stick to the schedule! Whats he talking about, mumbles Schneider to himself, as he drafts an e-mail response. Why do you think weve got agents for workforce management systems? They can put a team of specialists together in no time. My agent will send out an order right away. Just tell me how many and what kind of people you need and Ill have a team sent over in two hours. It would be a joke if we couldnt stay on schedule. Schneider leans back and relaxes. When he takes his customers out to the site this afternoon, hell be able to use augmented reality goggles to show them what the building will look like when completed and use superimposed animations to offer them a look at interior details. But thats later; now its time for the fun part of the trip. He activates his PDA once again, and a chess board appears on the display. Schneiders game agent has found him an opponent he doesn't know, but who has a similar handicap. The game can begin. Its Schneiders move. Evdoxia Tsakiridou
in the World of Networked Computers

They work quickly and efficiently and relieve their users of routine tasks. Siemens researchers are developing intelligent software units that can, for example, search for hard-to-find specialists or the best travel connections in a completely autonomous manner.
Invisible Helpers
If Jrg Mller and Michael Berger have their way, everyone will one day have a whole slew of willing assistants to relieve them of tiresome tasks or the tedious search for information. The two scientists from Intelligent Autonomous Systems at Siemens Corporate Technology (CT) have very real plans for their vision. Together with 11 colleagues, they are working on creating an environment in which agents will be able to simplify our daily activities. Agents are nothing more than software units that communicate autonomously with other agents in order to complete their assignments, says Mller. The key difference between agents and conventional computer programs is that the former are equipped with a profile of their users preferences and go into action on their
The Personal Travel Assistant (PTA)
Terminals
At home
Infrastructure
Fixed-line network connection; GSM/SMS, GPRS, UMTS cell phone; Internet
PTA server for agents

Access to services Value added services Personalization
Services
(examples)
On the move Bus and train timetables Center for current traffic information Information hub: Selection of user-specific information, representation adapted to type of terminal Telematics data Parking space/ garage availability
On a train
In the car
Travel agent
Homogenous representation of information adapted to type of terminal
Negotiations Data selection Rental car agents
Broker for rental cars
The PTA is an electronic travel support program based on a multiagent system. Different modes of transport and up-to-the-minute traffic, hotel and parking space information are linked via various agents and services in a manner that enables users to reach their destinations as efficiently and conveniently as possible.
Broker for parking spaces Parking agents
Broker for hotels
Hotel agents
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AGENT TECHNOLOGY
own initiative. The researchers goals are certainly ambitious. The programmable companions to James Bond have to be just as good as the original hero. They must be able to communicate and negotiate, take the initiative in difficult situations and make decisions autonomously (see box below). Nevertheless, Siemens primary goal is not only to develop the necessary software but also the complete solutions that offer customers competitive advantages. There are already numerous application possibilities in telecommunications, for example, when it becomes necessary to circumvent over-burdened lines or search for the least expensive connections. Or in industry, where autonomous assistants could help out with inspections and maintenance, or take control of complex production processes. What Mller and Berger are attempting to build are modular platforms based on proven network technologies. In addition to services like the Yellow Pages,
these platforms could contain tools for setting up agents and programming them. The goal is to make available an open library of algorithms that can be used by programmers, says Berger. This would make it possible not only to link various agents together so that they can conduct specialized missions, but also to provide them with the equipment they need. particularly successful example of the work along these lines is Siemens HR (Human Resources) NetAgent for the labor market. The Federal Social Security Office in Berlin is currently testing the system in pilot operations, with the ultimate goal of using it to help recruit qualified personnel via the Internet in the future. NetAgent helps companies set up specific job profiles and then automatically searches various databases to find
the right applicants. It not only compares job profiles with information on prospective applicants but also makes a preliminary selection and establishes a ranking of applicants. Not only do employers benefit from digital headhunters an adapted portal can also be used to help young people find an appropriate training program. Prospective trainees enter their professional goals and their resume into a server and are later informed of possibilities via SMS. With a WAP-enabled cell phone, they can also view the number of site hits, activate a job-application function and arrange for an interview.
Characteristics of Agents
Flexibility/mobility: They must be able to function on numerous platforms, networks and operating systems and be capable of solving technical problems without instructions from their users. Transparency/responsibility: If necessary, agents must be absolutely transparent for their users/owners and be equipped with the ability to document their actions (where they were, what they did, and with whom they communicated). Robustness/ability to react: They must be capable of dealing with errors, insufficient resources, low-performance servers and incomplete data as well as being able to solve as many problems as possible without human intervention. They must be able to react in a timely manner to changes in their environment. Autonomy: They must be able to autonomously initiate and conclude their assignments, regardless of whether such assignments are immediate, hourly, daily, weekly or monthly. User-focus: An agent must act in the interest of its owner and complete its tasks as instructed, without any deviations. Adaptability/ability to learn: An advanced agent must be able to change its behavior based on its experiences. Communication: Agents communicate with other agents and, if necessary, directly with humans as well.
ut there are more complex tasks to be dealt with these days than simply finding a suitable candidate for a job vacancy. People are becoming more and more mobile and require tools to help them find the information they need in the shortest possible time regardless of whether the issue is coordinating a service team or planning a trip. Here it makes sense to have several agents cooperate with one another. The Personal Travel Assistant (PTA) is a good example of an electronic travel support service based on a multi-agent system. PTA was developed on behalf of the German Ministry of Research by a group of partners from industry and the research community for use in the MOTIV (German acronym for Mobility and Transport in Intermodal Transportation) project. Siemens was responsible for developing the agents in the project. The goal is to link transportation systems with travel information in a manner that provides users with optimal mobility. Travelers hook up to the PTA server via a PC with an ISDN connection, or through the Internet, a cell phone or a Palmtop with a mobile communications card. They then commission a special agent that does all the rest of the work. The agent searches for appropriate plane or train connections, makes hotel or restaurant reservations, continually provides its customer with the latest traffic information and adapts its activities to the users
needs and preferences. If, for example, the user does not have a drivers license, the PTA will offer him or her a train connection rather than a rental car possibility. Up to date information from traffic management centers e.g. concerning traffic jams, train or plane delays is also provided, and parking guidance systems can be called up as well. All of this serves to help draw up an optimal route that takes into account all modes of transportation. Another complex procedure is to put together a mobile team to perform a range of tasks. Such applications could support telecommunications companies or energy providers in the event of emergencies, or when performing maintenance and inspections. After all, automated workforce management can save money and make work processes more efficient. Here, the experts at CT also have a solution, which was developed within the framework of the EU's project LEAP (Lightweight Extensible Agent Platform). LEAP is based on a scalable platform that is designed for use with mobile terminals such as Palms, pocket PCs, personal digital assistants or cell phones, Berger explains. The scalable platform was developed by Siemens. This technology will now be put to the test. Siemens and several other companies, including Motorola and Telecom Italia Labs, will demonstrate how it can be used to coordinate virtual teams as well. Field tests are already being conducted with mobile service teams at British Telecom (in Great Britain) and the German automobile association (ADAC), which is using the system for its mobile service teams in the Munich region. The management system is designed to autonomously register calls for assistance, such as in the case of a damaged cable or a car breakdown. It then organizes an appropriate team to deal with the specific problem. When doing this, the system must put together the right team, taking into account the skills that are needed, the distance of the specialists to the location of the problem, plus other factors such as overtime flexibility and general
The Multimedia Workplace of the Future (MAP)

Agents
Secure agent platforms I N T E R O P E R A B I L I T Y
Basic components (delegation of rights, certificates)
Biometric authentication (fingerprint, voice etc.)
Cryptographic hardware
Public key infrastructure

(asymmetrical encryption and certificates)
Formal analysis (search for holes in security)
L E G A L
A C C E P T A B I L I T Y
(Data protection/signature law)
MAP users can delegate complex tasks to a software agent. Because agents complete their assignments autonomously, security considerations are crucial. After all, agents do their work on behalf of their owners, performing tasks such as closing contracts and conducting payment transactions.
availability. Another pioneering project is MAP (German acronym for Multimedia Workplace of the Future), which is being funded by the German Ministry of Economic Affairs (BMWi). This pilot project, which began in March 2001 and incorporates 18 partners, involves the development of an assistance system for the working environment, with a focus on the building industry. MAPs main aim is to link all information in a user-friendly system. For example, users should be able to choose whether they wish to enter data via a keyboard, gesture or voice command. MAP also can be used anywhere, as it adapts itself to every environment and terminal.
How do you visualize a software agent? Maybe as a butler (Ask Jeeves ), or a ghost (top of opposite page). Or would you prefer a playful monkey (Bonzi-Buddy , page 56)?
TM TM
Instead of endless blueprints and plans, architects and construction foremen can use a small laptop or electronic organizer to access or update the data they need. They are supported in their work by a personal software agent that glides through the network according to commands issued by its boss, and subsequently provides the results of its efforts. In the ideal situation, the orders issued by voice command should contain the entire chain of research tasks from the search for the least expensive supplier of concrete in the vicinity to the closing of a legally binding contract. But the construction industry is just the beginning. MAP can also be used just as effectively in administrative departments and other areas. Regardless of where it is used, security is a top priority. After all, the agent performs its tasks on behalf of those who issue commands; it conducts negotiations, closes contracts and takes care of payments. Protective measures are therefore necessary
54
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AGENT TECHNOLOGY
Agents can provide assistance to young people who are looking for a job, and even organize interviews. Siemens are doing by installing components such as cryptographic systems for use in authentication procedures for agents, and digital signature programs for users. The process will involve the creation of a high-performance, SmartCard-based public key infrastructure with encryption systems and certificates. Right now, were studying various procedures and protocols, modifying them as needed and testing them, says Fischer. The security technology will be put through its paces until the end of this year, after which it will undergo a field test within the realm of a specially created scenario. The results of this test will then be incorporated into Version 2 of MAP. Control: Users must be able to override the agent at any time. Predictability: Users must be aware of the rules according to which the agent operates.
to secure the integrity of the system and the data. iemens and the Institute for Graphic Data Processing at the Fraunhofer Society were commissioned by the consortium to develop the data security system, since the usability and acceptance of MAP depends on this, as Kai Fischer, security expert at CT, points out. Fischer and his colleagues are currently setting up a special security architecture for mobile agents as part of a subproject and theyre venturing into new territory in the process. Thats because no existing agent platform offers the necessary infrastructure for applications in an open network and electronic marketplaces. The goal of the research being conducted is thus to create tools and methods for analyzing security requirements and subsequently implement the appropriate measures. A range of
questions have to be addressed here. For example, how can disruptive agents attempting to steal data be identified? How can you determine whether or not your own agent has been manipulated? How can you be sure that the actions taken are in accordance with data protection and digital signature law? What rights should be granted to mobile assistants? Should they have some of the rights of their owners for example, to check bank balances but not to conduct transactions? Here, too, a modular platform will serve as the basis for mobile agents. This platform will be able to incorporate security measures and other functions (see box on page 55). There is no standard procedure that can cover all the demands that will be made on mobile agents, says Fischer. That means we have to further develop existing security protocols. And that's exactly what researchers at
Avatars ...
are incarnations of Hindu gods: The word avatar comes from the ancient Indian language Sanskrit. In Hindu mythology, avatars are incarnations of gods that come down to earth to join humans. These days, avatars refer to virtual creatures whose appearance is based on living people or the imagination of programmers. They normally serve as game figures used by players in cyberspace. However, they are increasingly being used by private companies as salespersons and consultants in online shops, and for e-banking applications.
Laws for robots

Scientist and science fiction author Isaac Asimov formulated the famous three laws of robotics, which, according to the computer experts and authors Richard Murch and Tony Johnson at some point, probably all agents will be programmed to obey, The laws are as follows: First law: A robot may not injure a human being, or, through inaction, allow a human being to come to harm. Second law: A robot must obey the orders given it by human beings, except where such orders would conflict with the first law. Third law: A robot must protect its own existence, except where such protection would conflict with the first or second law.
AP users will get much more than just another anonymous software program. In fact, the agent will have a face. But what should it look like? Should it have the appearance of a cartoon character or should it be more human-like? Should the agent be something like an advisor or more like a colleague? Humble or domineering? Nina Sandweg from the User Interface Design Center (UID, see pages 32 33) is addressing such questions. Since the agent will be equipped with the ability to think, decide, react and learn, it will also have to be convincing, she says. A personified agent would certainly simplify interaction, but if it becomes too human, users will at some point come to believe that they are dealing with a real person and will begin to overestimate the abilities of their electronic assistants. MAP agents are therefore put through extensive testing at the Siemens UID lab. That's because the success of the technology will depend to a great extent on its userfriendliness and the level of acceptance it receives. After all, it represents the interface between the user and the system as a whole. One of the ways Sandweg was able to determine the demands that will be placed on agents was through a series of customer surveys. These revealed the most important issues to be:
n certain areas, it may be useful to not only lend the agent a face, but also a body in the form of an avatar, for example (see box, left). These creatures made out of bits and bytes will be an indispensable part of the virtual world. They will show the user exactly where in cyberspace he or she happens to be at a given time and provide information on other Internet surfers at that location. Avatars will play with children and negotiate with business partners. They will sing and read out news. Under such circumstances, surfers may well forget that the avatar agent is ultimately just a robot whose behavior and reactions can be programmed, and may start to believe they are dealing with a real person. Don't laugh. Advanced avatars are already capable of depicting voices, gestures and facial expressions, as well as communicating through blurbs, as in a comic strips. And as young people grow up with artificial stars like Lara Croft or the Japanese pop icon Kyoko Date, it is conceivable that avatars may one day become virtual versions of the users themselves. This would make it possible to conduct international conferences, business negotiations and presentations on an almost completely virtual level as soon as gesturing and multimedia animation techniques are sufficiently advanced. The challenge here is to make the avatars as simple as possible while at the same time ensuring the efficient transmission of data.
Talking heads technology puts speaking avatars on every cell phone. Data transmission rates of just a few kilobit per second suffice.
The MPEG-4 standard could be of assistance here. This coding procedure makes it possible to transfer multimedia data like video, audio, text or pictures much more rapidly over the Internet, says Siemens researcher Thomas Riegel. He and his colleagues have developed an application known as talking heads, which is based on the MPEG-4 standard. The talking heads are actually avatar models that take the form of human heads and are capable of speech and movement. With MPEG-4, a data transfer rate of only four kilobit per second is adequate to control the heads. This means such depictions can be displayed on todays GSM cell phones, provided the receiver is already equipped with a model head. The only problem is that there is still no universal browser with which all possible MPEG-4 components of a multimedia signal can be depicted in any combination. Moreover, holding a virtual video conference, for example, would require real time analysis of the animation parameters for the face something current systems are far from being able to deal with. There are, however, already many application areas for these animated heads where real time processes are not important. These include e-shops, personalized portals and call centers. The majority of the costs at such facilities are generated through the processing of standard inquiries, and in most cases, an agent or avatar with average intelligence
would be able to solve problems or provide the correct answers. Riegel and his colleagues have already improved their application. Their basic face can now express emotions such as happiness, anger, surprise, pleasantness, annoyance and sadness. These preprogrammed gestures would make real time systems unnecessary, since developers can easily adapt the agents facial expression to any given mood. This means we can gradually implement a system that incorporates human communicative behavior, says Riegel. However, higher transmission capacities are required for downloading 3D scenarios with authentically designed figures. The researchers can only hope that UMTS will soon be introduced on a wide scale. The third-generation mobile communications standard provides for a considerably higher data transfer rate than GSM. Riegel believes that, in a few years, youll be seeing 3D depictions on cell phone displays. Paying a visit to a virtual chat room or e-shop with a cell phone will then no longer be a problem. Users will be able to decide for themselves the form they assume in the virtual world and the face their agents will wear. Maybe Emma Peel or Hercule Poirot or better yet, James Bond. Evdoxia Tsakiridou
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International Activities
I n
applications. Over and above that, special emphasis is placed on two ideas: (a) integrating existing systems into the architecture and (b) avoiding over-standardization in other words, establishing the external behavior but leaving the solution up to developers. Most companies are currently limiting themselves to simply observing developments. This is because the market for soft-
B r i e f
Scientists worldwide are working to develop a technology that relieves people of the task of processing data distributed throughout the Internet and other networks. The agents involved are intelligent software units that know the preferences and desires of their owners, support them in their search for information and, when necessary, represent them. In the future, agents will plan trips, reserve rental cars, bid at auctions or help job seekers find employment and they will do all this completely autonomously, and without the need for constant instructions from those whom they work for. Using agent technology, companies will be able to automate activities such as brokerage services, financial administration and customer service, thereby reducing costs. Internet surfers, conference participants or sales consultants who are unable to be present at a specific location will send their "avatars" out into networks. These virtual representatives will then take part in chats, negotiate with business partners or play with children. Agent technology is very complex and the market is still new and not very well organized. There are few general standards. Independent, commercial products are therefore still scarce. Siemens is working on some promising projects that have progressed very far, such as those for tourism, the services sector (insurance, banks) and the labor market. Here's a selection of additional sites where agents are being developed: The University of California at Berkeley plays a particularly large role in the development of mobile agents. The main focus is on e-commerce: for example, purchasing and sales agents, yellow page agents, agents for customer inquiries. (www.cs.cmu.edu/~ softagents/index.html) Stanford University, California, provides agent functions as a package in a Java application or an applet. Researchers are also working on agent communication.(http://cdr.stanford.edu /html/NextLink/NextLink.html) The Artificial Intelligence Research Group at Worcester Polytechnic Institute, Great Britain, is working on knowledge-based systems, multi-agent systems and adaptive machines. CONTACTS Dr. Jrg Mller, CT IC 6, Fax +49 89 636 41423, joerg.mueller@mchp.siemens.de Dr. Michael Berger, CT IC 6, Fax +49 89 636 41423, michael.berger@mchp.siemens.de Kai Fischer, CT IC 3, Fax +49 89 636 480 00, kai.fischer@mchp.siemens.de Nina Sandweg, CT IC 7, Fax +49 89 636 49428, nina.sandweg@mchp.siemens.de Thomas Riegel, CT IC 2, Fax +49 89 636 52393, thomas.riegel@mchp.siemens.de LINKS The Agent Society: www.agent.org A comprehensive list of links can be found at the University of Reading (UK): www.rdg.ac.uk/~ssr96apg/research_ links.html More on agents at the University of Maryland: http://agents.umbc.edu
Creating the Right

Environment for Agents
Although the international research community has been pushing ahead with agent technology since the late 1970s, it has produced very few independent products to date. In particular, the problem of standardization is proving a difficult nut to crack.
Development of intelligent software agents is moving too slowly. There are several reasons for this. For one thing, the issue is very complex, because researchers must unite approaches from various disciplines (artificial intelligence, distributed systems, linguistics and the social sciences). At the same time, agents require an appropriate field of activity, with associated software platforms. These platforms control exactly how much access agents have to the computers they visit. After all, an outside agent should not be able to see or access everything, let alone be able to delete data. There are at least 15 interesting technological platforms, says Siemens researcher Michael Berger. This diversity is precisely what poses such difficulties. Global standards must be created that allow agents to operate in a uniform infrastructure. Part of the problem is a lack of common communications protocols and directories such as the yellow pages from which agents can draw information in order to make decisions. Recognizing this, research institutes and industry established FIPA (Foundation for Intelligent Physical Agents) in 1996. The organization currently consists of approximately 65 members. Another important body is the OMG (Object Management Group), which developed the interoperability standard known as Corba and which also proposes norms specifically for the management of mobile agents and their functions. Members of these organizations share experiences, discuss the next stages of development to be addressed and attempt to establish standards similar to MPEG. The issue here is what the components for the architecture of an agent system should be and how they should interact with each other. Once the architecture has been established, it is simulated in tests to determine whether the proposed system functions and how it should be employed. Appropriate adjustments are then derived from these reference
Agents As Tourist Guides

Since 2000, the European Union has been running a project known as Crumpet (creation of user-friendly mobile services personalized for tourism). The program is a UMTSbased portable tourist guidebook and route planner for individual travelers. Participants include the European Media Laboratory (EML) in Heidelberg, Germany, the GMD research center in St. Augustin, Germany, Queen Mary & Westfield College, U.K., the University of Helsinki and several telecommunications companies from the U.K., Finland and Portugal. The system will provide user terminals with wireless, location-specific, multimedia information. To access the data, users have to commission a virtual agent, which then gets in touch with colleagues to locate the desired information (www.eml.villa-bosch.de).
Avatars and Virtual Conference Rooms

The Avatar Conference, a European Union research project, began in early 2001. Participating research institutes and companies want to create a virtual conference environment in which companies and their business partners can conduct multimedia meetings, conferences and presentations via the Internet. Avatar technologies and multi-user platforms will make it possible for participants to meet in a virtual room, have a discussion, exchange knowledge and information, and make decisions without having to leave their offices. A content management system will supply the virtual conference environment with data accessible to everyone and thus permit simultaneous work on a document, for example. Plans also call for a dictionary and a translation service to be provided in order to improve communication among business partners. Currently, an initial prototype is being created along with design sketches for three-dimensional conference rooms. Project partners include the Fraunhofer Institute for Industrial Engineering IAO in Stuttgart (project coordination), several companies from Europe, and a representative from the U.S. Additional information is available at www.info-engineering.iao.fhg.de.
Enter the virtual conference room and take part in the first avatar conference!
ware agents is still very new and not very well organized. However, those companies that have adequate resources are conducting very extensive development programs in order to stake a place for themselves in the worldwide agents market. In addition to Siemens, these companies include Oracle, AT&T, IBM, Apple Computer and Logica. There are also a number of companies that deal with special tools not only for accessing agents and knowledge, but also for communicating across networks and interfaces. These include Edify, Lotus, Sun, Microsoft, Quasar, MicroStrategy and Hewlett-Packard. Evdoxia Tsakiridou
The Media Lab at the Massachusetts Institute of Technology is integrating agent technology into TV and the Internet (http://agents.www.media.mit.edu/ groups/agents). Pattie Maes, a pioneer in the field, works with electronic marketplaces and agents in mobile terminals as well as addressing social aspects. Carnegie Mellon University, Pittsburgh, Pennsylvania. Agent technologies are made available in many colleges and at over 60 research centers.
@
A comprehensive search list on avatars and bots is available at: http://botspot.com Standardization organizations: FIPA: www.fipa.org OMG: www.omg.org LITERATURE Richard Murch, Tony Johnson, Intelligent Software Agents Addison-Wesley (2000)
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59
S T A R T - U P S
Hear t
sound
analysis
Raymond Watrous, developer of an algorithm that can identify heart sounds and there are probably no statistics are as yet available hundreds of thousands of such avoidable referrals each year. Not to be forgotten, on the other hand, are cases that go undetected. Many forms of heart disease may be asymptomatic for years. Left untreated, however, they may require surgery. gainst this backdrop, Princeton, New Jersey-based Siemens Corporate Research (SCR) has developed unique, intelligent algorithms that can analyze heart sounds and deliver clinical findings. At the patient end of what SCR developed is Tricorder, a prototype system that uses advanced signal processing algorithms to interpret acoustic patterns. "Tricorder analyzes heart sounds and derives tions will produce distinctive sounds caused by turbulent blood flow at given moments. These abnormal sounds are analyzed in terms of their duration and amplitude, says Watrous. Based on all this information, Tricorders patent-pending algorithms can identify the most likely source of the anomalies by determining which phase of heart motion they were produced in. With this technology in mind, the algorithms developers tapped experts within SCRs own business and technical team and at Brooklyn, N.Y.-based telecom company SPEEDUS.Com, Inc. to investigate the possibility of establishing a start-up company. In January, 2001, SCR and SPEEDUS founded Zargis Medical Corporation, which is now located in Princeton. Our goal, says Shahram Hejazi, a Member of the Zargis Board of Directors, is to develop advanced diagnostic products and services to enable primary care physicians to detect heart abnormalities. Based on Tricorder technology, the company plans to develop a product* that captures heart sounds and sends them to a nearby PC. The PC will then analyze the sounds and display a detailed but easy-tounderstand graphic representation of its findings (see figure). Armed with the resulting information, the average general practitioner will then be in a position to make an informed decision regarding the need for referral to a cardiologist. Should there be any doubt, the information including associated sound file could be forwarded to the cardiologist prior to the consultation. Furthermore, plans call for an archive to be established for each patient. This will allow specialists to compare older heart sounds with new ones, thereby providing an objective way of monitoring previously diagnosed conditions. Eventually, the database will become an information reservoir from which cardiologists will be able to interrogate expert systems and extract new data pertinent to their patients.
Its time for your annual check-up. Your shirt is off and youre lying on the examination table with its crinkly paper cover. Finally, the doctor arrives, and the metallic head of his stethoscope is pressed against your chest. He listens carefully for a few moments: contraction, relaxation; contraction, relaxation. Four chambers two atria and two ventricles plus four valves, all working together to pump about five liters of blood throughout your body seventy to eighty times a minute. Theres a lot to listen to. And the sounds are inherently hard to decipher because they are faint and lie at the lower end of the audible frequency range. Furthermore, the sounds of the heart are difficult to discriminate because they are separated from one another by less than 30 milliseconds an exceedingly short time for human analysis. How, then, do doctors distinguish innocent from pathological heart murmurs? The answer is that many of them dont. Numerous studies have shown that extremely high percentages (as much as 87%) of patients referred to cardiologists for evaluation have benign murmurs. In other words, the general practitioner (GP) heard something, but a follow-up examination showed that it wasnt anything to get excited about. That may be good news for patients, but it certainly isnt what efficient medical care is all about. Typically, a visit to a cardiologist, including ultrasound work-up and the cost of a technician, runs from $300 to $1,000 in the United States;
Could Speak
60
If the Heart
important clinical information from them. says Raymond Watrous, Ph.D., a former Distinguished Member of the Technical Staff at SCRs Signal Processing Department and now Chief Technology Officer of Zargis Medical Corporation. Normal heart sounds, explains Watrous, are generated by the opening and closing of valves as the heart contracts and relaxes and by the free flow of blood through vessels and chambers. But if the valves stiffen as a result of disease they can produce a snapping sound that has a unique acoustic signature. Similarly, constric-
A new Siemens spin-off has developed diagnostic algorithms that can listen to heart sounds, identify where they were produced, and interpret their probable causes. Spin-off partner SPEEDUS is working on an Internet-accessible database for archiving the sounds and harvesting information from them.
Tricorder's phonocardiogram shows the results of an examination in four sections. Top: complete waveform showing collective cardiac activity; S1: systolic phase (contraction); S2: diastolic phase (relaxation); and murmur detection. At bottom left is the system's interpretation.
n a nutshell, thats the idea behind Zargis; and marketing studies indicate that the idea will fly. What GPs really want is an inexpensive tool that will help them interpret heart sounds in a simple way, says Silvano DallAsta, Chairman of the Zargis Board. On the other hand, cardiologists will welcome a technology that allows them to concentrate on those patients who really need their help while giving them the ability to refer to a specialized database. With all that it has to offer, Tricorder and its connection to a central archival database may be literally just what the doctor ordered. The arithmetic looks good, says DallAsta, who is also Chief Financial Officer at SCR. Given the number of annual physical examinations in the U.S. and a reasonable fee for service, we see a $2 billion market. Worldwide, it could be several times that figure. Arthur F. Pease
* The information about this product is preliminary. The product is under development and is not commercially available in the U.S. and its future availability cannot be ensured.
61
Patents and Researchers
I n t e r v i e w
diesel-powered generators. One such system uses fuel cell units distributed throughout the ship to supply electricity to a direct-current network that powers electric thrusters via DC/AC converters. For higher speeds, hydrojets driven by electric motors that obtain their power from gas turbine generators will be installed under the ships. One milestone on the road to the zeroemission ship is the Siemens-Schottel Propulsor (SSP), an energy-saving propulsion system that was developed together with Schottel GmbH & Co. KG, a manufacturer of thrusters. Rzadki was able to improve on existing solutions when designing the SSP. Since the late 1980s, electric thrusters have had their motors located in a gondola mounted below the ship. The gondola can be
Patents Potent Weapons

In a satirical novel by Mark Twain, a Yankee from Connecticut is magically transported to the ancient court of King Arthur. After a short time, he becomes Prime Minister. His first two official acts are to introduce a patent law and to establish a patent office, because he reasons without patents, technical development is essentially aimless, much like the random movements of a crab. Patents, he says, protect against imitation, and they thereby represent an incentive for others to create their own superior products. In short, patents get the engine of progress moving. If the Yankee were transported to todays world, he would encounter a patent scene that has changed considerably. Although his ideas are still valid, they have receded into the background. Patents have evolved into a potent weapon in global competition. Very innovative companies, in particular, convert their ideas into strong patents, which they put to profitable use. Indeed, patents are an integral part, a prerequisite, for making Siemens' Pictures of the Future a reality. This section therefore features examples and interviews addressing the trends, successes and problems in the world of patents.
Here Comes the Electronic Ticket

No change for a bus ticket? No problem. With a SmartCard, an electronic ticket that can be detected in pockets or purses, all you do is get on and enjoy the ride.
Since he left the Semiconductor Group in 1994, Dr. Horst Fischer, 60, has been head of the Siemens department that is responsible for worldwide patents and licenses.
new electronic ticket could well replace the paper ticket invented more than 160 years ago. Those in possession of a long range card can use all forms of public transportation without having to buy and stamp a ticket every time. During the trip, the card is detected by radio signals after every station, even through pockets and purses. The trans-
Bruno Wenger has submitted 21 patent applications. Nor is his creativity limited to his work. Wenger, who is a cooking aficionado, also designed his home. mitter has a range of several meters (hence the name of the card). A radio unit installed in every bus or train car communicates with both the SmartCard and a computer that processes the data. Since detection occurs only en route, cardholders are not billed unless they actually ride. Depending on their preference, they either receive a normal bill or have the charges debited from a pre-paid credit balance. Bruno Wenger, an engineer at Siemens Transportation Systems in Zurich, Switzerland, is responsible for significant advances that have been made in the development of the system. There were some hard nuts to crack, as you can imagine, especially regarding the detection and registration processes and the algorithms. But the authorization,
payment and security aspects are also pretty complex, he says. The system has to deal with many complicated situations. Furthermore, there is no room for erroneous account charges, which would hurt public acceptance. At the same time, the system must be highly reliable in terms of registration, or no operator whether a transportation company, a museum association or a venue for winter sports would be interested in using it. Privacy and data protection also play an important role. In addition, it is difficult to keep the card's power consumption low enough to ensure that the battery lasts for at least two full years. Wenger is justifiably proud of the project's success to date. Our system worked very well in a pilot test in the Basel area in the early summer of 2001, he says. From the very start, our data acquisition was 99.7 percent accurate.
Wolfgang Rzadki designs energy-saving propulsion systems for ships. rotated 360 degrees. It works also as a rudder. Although this design created more room for cargo and passengers, the size of the gondola meant that a relatively large amount of energy was needed for propulsion. Rzadki had the idea of replacing the electrically excited synchronous motor used in this solution with a less bulky, permanentmagnet excited motor. The trick here was to fit the motors rotor with magnets in which torque is created by means of an electric current. This made it possible to reduce the size of the gondola and optimize the propulsion system, which also lowered energy consumption by 10 to 15 percent. An SSP of this type is currently being used in a cargo ship, and two ferries scheduled to enter service in the Baltic Sea later this year have also been equipped with the propulsion system.
As far as Siemens is concerned, has the importance of patents and property rights changed in recent years? Fischer: Patents became success factors in the global competition. They protect a companys own ideas and products from imitations. But as intellectual assets, they also represent a value that is used much like a medium of exchange within the context of license-exchange agreements, partnerships, and acquisitions. In the case of divestments, patents play a substantial role in terms of sales revenue or the concession of mutual rights. Exchange agreements are becoming increasingly important between large companies. Each side appraises the others portfolio. When there is a difference in value, compensation is paid, and the agreements are of limited duration. Do things usually work out peacefully? How often do companies go to court? In the IT area, in particular, innovations often take place in small, aggressive companies. We (and our large competitors) are increasingly under attack here, and we therefore must move to enforce our patents when there is a proven violation. The patent battles Infineon successfully waged against Rambus and Hyundai are a good example of this. Patents often serve as weapons, but in most cases the dispute ends with reciprocal licensing agreements and license payments.
the patent department has developed assessment techniques and a multitude of tools that enable us to steer invention onto the right track. Its a type of innovation on demand, so to speak. Recently, we also began classifying all patent applications on the basis of the quality of the patent. The standards applied here include the effects of the invention on competitiveness and its value for business success. Siemens also holds a large number of patents that it doesnt use itself. What will happen to these? Every corporate unit at Siemens has intellectual property rights that cover fields of technology beyond its own business. That allows for cross use, which in turn greatly enhances the patent positions at other Siemens units. New rules have also been in effect since July 2001, including the rule that our patents should be exploited, and we do in fact take advantage of every opportunity to generate licensing revenues. The Siemens Licensing Center has been the focal point of these activities for the past two years. At Siemens, software accounts for approximately 60 percent of the cost of research and development. Can software be patented? Of course it can. Software patents even account for an increasingly large share of our portfolio. Some groups, such as Automation & Drives and Medical Solutions, have launched special initiatives for such patents. Initial registration of these property rights is increasingly occurring in the U.S., because the legal framework for software patents is very advanced there. This trend is even more pronounced in the case of patents for business models in other words, patents for electronic business solutions. Here weve set up a worldwide coordination and counseling center. Interview conducted by Hartmut Runge
Zero Emission Ship in Sight

Smoke stacks and air pollution may soon be part of the past.
62
PATE N T S
nder the motto Frigate of the Future, an association of eight companies, including Siemens, is developing ships of the future that run quietly and produce low levels of emissions. As part of the project, Wolfgang Rzadki, a Siemens engineer based in Hamburg, Germany, is working on innovative power supply systems to replace todays
What does all this mean for Siemens patent portfolio? That its quality has to be as high as possible, and it has to completely cover all the innovation elements of our business. To this end,
63
Siemens Facts and Figures
464,000 Employees*
of whom 57,000 are involved in research and development. More than 500 locations worldwide almost 150 for R&D (see map)
Auburn Hills Pittsburgh Hoffmann Estates Concord Berkeley Santa Clara Mountain View Sacramento San Jos Issaquah Batavia Seymour Norwood Johnson City Ciudad Juarez Arlington Austin Norcross Knoxville Towanda Orlando Boca Raton London Chatham Windsor Mississauga Drummondville Peterborough Tilbury Hillsboro Danvers Burlington Beverly Florham Park East Fishkill Piscataway Princeton Malvern Wendell Newport News Eindhoven Herentals Gent Brussels Namur Goteborg Bracknell Bristol Dublin Roke Manor Oslo Solna
(* as of June 30, 2001)
Siemens attaches great importance to research and development a key success factor in terms of competitiveness. Over the course of the past five years, Siemens has increased R&D expenditure by more than 50 percent and now invests an average of seven percent of total sales in this area. This figure is even much higher in some areas of the company.
Mohelnice Brandys Brnn Frenstat Zilina Nove Zamky Budapest Szeged Timisoara Amberg Augsburg Babenhausen Berlin Bocholt Braunschweig Bruchsal Chemnitz Dresden Dsseldorf Erlangen / Forchheim Frankfurt a. M. Grlitz Greifswald Herbrechtingen Karlsruhe Konstanz Mlheim Munich Neustadt (Saale) Nuremberg / Furth Paderborn Rastatt Regensburg Ulm Wesel Wetzlar Witten Wrzburg
R&D Expenditures at Siemens

over the past 11 years
(worldwide, rounded off; figures prior to 1991/92 not absolutely comparable)
6 5 4 3
3.07 3.53 3.78 3.89 3.83 3.73 9.6 9.4 9.6 9.3 8.9 8.2 7.8 3.73 4.1 4.65 5.2
5.6
12 10 8
7.6
7.7
7.6
7.1
6 4 2 0
2 1 0
89/90 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 in billions of euros Percentage of sales
Pandrup Kopenhagen Helsinki Taastrup
Patents Registered in 2000

Map of Siemens research and development locations around the world.
Siemens Bosch BASF Daimler Chrysler Matsushita 4000 Beijing Seoul Ichon Tokyo Yokosuka Kakegawa 2000 1000 500 0 Penang Singapore
Siemens is number one in Germany German + European patent registrations
IBM NEC Canon Samsung Sony* Siemens 3000 2500
Siemens Philips Procter &Gamble Ericsson 1500 1200 900 600 300 0
Siemens is number one in WIPO World Intellectual Property Organisation
Porto Lisbon Madrid Zaragoza Sevilla Toulouse Antony Grenoble Montrouge Paris Sophia Antipolis
Osijek Villach Split Linz Salzburg Graz Vienna Treviso Milan Zurich Zug Bronschhofen Mnnedorf
Istanbul Netanya Ramallah Tel Aviv
Bosch
Chang Chun
3000 2000 1500 1000
New Delhi Mumbai (Bombay) Goa Bangalore
Xian Tian Jin Chengdu Nanjing Hong Kong
Shanghai Taipeh
0
*followed by Fujitsu, Toshiba, Motorola Siemens is no. nine in U.S. (patents issued)
Key Company Figures
Annual earnings after extraordinary result Sales in billions of euros
7,901
Siemens is one of the worlds leading companies in the electronics and electrical engineering sector. To ensure it maintains this position, Siemens employs nearly 57,000 of its 464,000 people in research and development. The company's R&D budget for fiscal 1999/2000 totaled 5.6 billion euros. The operative business is divided into six segments: Information and Communications develops products for current and future communication needs. Automation and Control offers complete solutions and services for industrial production. Power builds power plants and guarantees the distribution of electricity. Transportation links transport systems and develops solutions for safer, more environmentally friendly cars. Medical increases the efficiency of the healthcare system through diagnostic and treatment modalities, and Lighting supplies lamps and light sources for all applications.
1,865 469 60,177 1998 68,582 1999 78,396 2000

Company sales rose 14 percent to 78.4 billion euros in fiscal 1999 / 2000.
So Paulo Curitiba Buenos Aires
Johannesburg
Sydney Melbourne
In 2000, Siemens researchers and developers came up with 8,200 inventions or 33 every working day. This is an international record. Almost 4,000 patents were submitted to the German and European patent offices in 2000, making Siemens the top innovator. In the U.S., Siemens ranks among the top ten in terms of patents issued.
Percentage of Sales by Product Age

five years
Innovations are becoming increasingly important for Siemens. Three-quarters of the companys sales come from products that have been on the market less than five years. This figure was only 48 percent 20 years ago.
and less
48 %
six to 10 years
55%
75%
30%
29% 19% 16% 1984/85
more than 10 years
22% 1979/80
6% 1999/00
Fiscal year
64
65
Feedback and Service
Preview Spring 2002
Would you like to know more about Siemens and our latest developments?
If so, we would be delighted to send you more information. Please check the box alongside the publications you would like to receive and fax this sheet to +49 89 636 35292 or mail it to: Arthur F. Pease, Siemens AG, CS C ET, 80312 Munich, Germany. E-mail: arthur.pease@cc.siemens.de Innovations for Tomorrows World (English / German) Solutions for the Cities of Tomorrow (English / German / Chinese) NewWorld the Siemens Magazine, with 20 pages of Research and Innovation (four times a year in English, German, Portuguese and Spanish) Annual Report Environmental Report Corporate Citizenship Report Further information on Siemens innovations can be found on the Internet at: www.siemens.com/innovationnews (international R&D) www.siemens.com/newsdesk (weekly media service on innovations) www.siemens.com/pof (Pictures of the Future on the Internet) www.research-innovation.com (R&D articles from Siemens) www.ct.siemens.com (Corporate Technology at Siemens) my address is incorrect please cancel my subscription to Pictures of the Future Please send Pictures of the Future to (check the appropriate box and enter the address below):
P r e v i e w
TRANSPORTATION Communication Vehicles
Vehicles with Internet access will be the rule in the future. Down the road are comprehensive information systems and safetyenhancing automated vehicle-to-vehicle communication systems.
ENERGY
The Independent Power Plant
Future power supplies will increasingly rely on small, First name, last name Company Street, number City State Telephone number, fax or e-mail networked, distributed solutions. The first commercial, highly efficient and environmentally friendly fuel cell power stations are already being developed.
COMMUNICATIONS
Mobile Multimedia
New technologies open the door to multimedia mobile communications. The next challenge is how to display the growing quantity of information and accomodate larger data streams.
66
67
Publisher: Siemens AG Corporate Communications (CC) and Corporate Technology (CT) Wittelsbacherplatz 2, 80333 Munich Dr. Ulrich Eberl (CC), Dr. Dietmar Theis (CT) Editorial Office: Arthur F. Pease (Editor-in-Chief) Dr. Ulrich Eberl (Editor-in-Chief, German Edition) Dr. Norbert Aschenbrenner Ulrike Zechbauer Additional Authors in this Issue: Dr. Michael Lang, Guy Pierce, Gven Purtul, Dr. Hartmut Runge, Dr. Sylvia Trage, Dr. Evdoxia Tsakiridou Picture Editors: Judith Egelhof Julia Berg
Layout / Lithography: Bro Seufferle, Stuttgart Illustrations: Natascha Rmer, Stuttgart Thorsten Mortag, Bochum Graphics: Jochen Haller, Bro Seufferle Printing: Bechtle Druck Zentrum, Esslingen Translation: Transform GmbH, Cologne Printed in Germany. Reproduction of the articles in whole or in part requires the permission of the editorial office. This also applies to storage in electronic databases, on the Internet and reproduction on CD-ROM.
Further Information: www.siemens.com/pof Picture Credits: Siemens AG/Volker Steger, Siemens AG/photo montage: Bro Seufferle (title), photo archive Preuischer Kulturbesitz (4-5, 22), Bavaria/Getty Images (6-7, 44 l.) neurosurgical clinic and polyclinic at the university Mainz (24), Volume Interactions (23), Berufsgenossenschaftliche Unfallklinik Frankfurt a.M. (25), vision photos, Axel Kull (26), Charit medical faculty of Humboldt university, Berlin (27), MITI: working group on minimally invasive interdisciplinary therapeutical intervention (28-31), Dr. Sylvia Trage (44 r., 46 t.), Tryllian (53), Microsoft (55), Bonzi (56), Fraunhofer IAO, Stuttgart (58). Copyright of all other images is held by Siemens AG. 2001 by Siemens AG All rights reserved Siemens Aktiengesellschaft Order number: A19100-F-P086-X-7600 ISSN 1618-5498

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Pictures of the Future

PICTURES OF THE FUTURE

PICTURES OF THE FUTURE

A look into our future

PICTURES OF THE FUTURE

Pictures of the Future: Technological trends in key business segments

Tomorrows Operating Room

The Electronic Future of Money

Agents, Bots and Avatars

PICTURES OF THE FUTURE

Global Network of Innovation / User Interface Design

Pictures of the Future | Fall 2001

Pictures of the Future | Fall 2001

PICTURES OF THE FUTURE

Pictures of the Future

A process to help shape tomorrows world

Planning for the Future the Siemens Way

Time horizon (varies according to business segment)

Pictures of the Future | Fall 2001

Pictures of the Future | Fall 2001

PICTURES OF THE FUTURE

Pictures of the Future | Fall 2001

Pictures of the Future | Fall 2001

PICTURES OF THE FUTURE

Application service providers

Autonomous service robots

Local servers LEISURE TIME

Global Challenges and Interdisciplinary Solutions

Augmented reality Secure telecollaboration Flat screens Projection computers

Multimedia communication Individual navigation and location-dependent services

Information & Communications Trends

ter -compu Human tion oopera c

Safety ce ssistan Driver as system

ement manag Energy

Global primary Limited es sourc re

on sportati d dal tran overloa Traffic Intermo

Pictures of the Future | Fall 2001

Pictures of the Future | Fall 2001

PICTURES OF THE FUTURE

Automation & Control Trends

Power generation as a by-product of the chemical industry

Service card Distributed power generation

E-business Communication centers

Hydrogen filling station as an energy shop

IT-supported development and after-sales service

Data networks in intelligent buildings

Pictures of the Future | Fall 2001

Pictures of the Future | Fall 2001

PICTURES OF THE FUTURE

Monitoring of health condition and control

Health information and management systems

3D-scan data acquisition and diagnostic support

IT-supported rehabilitation programs

Minimally invasive robotassisted surgery

Electronic toll collection and enforcement

Variable message display

Self-diagnosis/ remote maintenance

Pictures of the Future | Fall 2001

Pictures of the Future | Fall 2001

TOMORROWS OPERATING ROOM

In the Year 2015

The Cutting Edge