2009 TMT Predictions: Technology
1. Making every electron count: the rise of the SmartGrid
In 2009, electricity is expected to account for over 16 percent of all energy used . However, the average efficiency of the world’s legacy electricity grids is around only 33 percent. Enter SmartGrid technologies. SmartGrid companies add computer intelligence and networking to existing electrical grids, yielding a consumption savings of up to 30 percent. SmartGrid solutions providers enjoyed 50 percent revenue growth in 2008 and may generate $25 billion in revenues in 2009. Although the global economy may make public spending on SmartGrid unlikely, governments should offer tax incentives as well as consider how SmartGrid technology can reduce non-domestic energy dependence and help make the grid more secure . To conserve costs, profit-oriented utilities and enterprises should deploy SmartGrid technologies even without government support. Major manufacturers and utilities may even want to explore partnerships with or acquisition of smart energy companies.
2. Gadgets for free!* (*subject to contract)
With plummeting consumer spending on high ticket-price goods, bundling products and services for such devices as televisions and computers may help stimulate a stalled market in 2009. But bundling has cons as well as pros for both service providers and manufacturers. Companies should first consider their positioning in a bundling offer, as either the leader or the supplier, and how it will affect their customer support obligations . They should also consider consumer perceptions: a device that is offered nominally at no cost may diminish its perceived worth. Another risk concerns bundling contracts for products such as television and computers—which can still be used regardless if there is a default on the service contract. And in tough economic times, long-term contracts may drive consumers away. Hire-purchase contracts may have more appeal for customers, who could use residual value in a product to upgrade their device.
3. Disrupting the PC: the rise of the netbook
In 2009 the momentum behind netbooks should grow, with new models offering better processors and improved hard drives. Although netbooks have the potential to threaten PC and other sub-sectors’ margins, careful market development and expanded applications offer significant opportunities as well. PC manufacturers should consider the market for premium netbooks , with producers of operating systems developing products designed specifically for netbooks . Other technology companies should take advantage of the inexpensive low-power central processing units (CPU) of netbooks, with home-media systems, digital video recorders, and games consoles capitalizing on the new CPUs. Already wireless carriers are looking to subsidize netbooks as a way to lock in wireless data subscribers. And netbooks can be used by office workers instead of conventional PCs and even replace field force workers’s clipboards or PDAs.
4. Moore's Law and risk
In 2009, over a billion items of personal data may be lost or stolen , due to the proliferation of memory sticks, MP3 players, and the disposal of equipment with valuable information. Work practices such as increased travel and home offices may now be perceived as presenting risk. Companies need to acknowledge this new reality and take precautions. Employees at all levels should be trained in how to minimize data risk. New policies need to be developed that direct the deletion of data, outline the secure disposal of equipment, and discourage personal storage of files. IT departments may also reconsider standard passwords, using more secure options, such as biometric data . Employees should also be discouraged or if required prohibited from working with highly sensitive data while in transit or in any insecure location. And when working with confidential data at home, a locked room may become a prerequisite.
5. The common sense of green and lean IT
In 2009, the outlook for energy remains uncertain and organizations should consider as many options as possible for reducing consumption. One source of ready savings is data centers. If housed in facilities originally designed for humans, data centers should be reconfigured to reflect the needs of machines. A difference of just one degree could have a significant impact on the cost of cooling . Analyzing any forms of power loss could also reveal significant and easily remediable problems. An underperforming power supply could leak over 10 percent of power before it even enters the building . Poorly positioned vents or misdirected cool air wastes energy as well. Companies may even want to consider outsourcing data centers, using facilities with the latest and most efficient technology. But the optimal approach could be to simply cap the size of data centers rather than assuming their inexorable expansion.
6. Downsizing the digital attic
The falling price of digital storage has caused file management to become reckless at many enterprises. If storage space costs next to nothing, then next to nothing is discarded. But while digital storage has become cheaper, the cost of facilities and labor that service storage has risen . In 2009, just the cost of keeping servers powered-up and cooled is forecast to increase by over 15 percent, to $35 billion . But there are ways to control the escalation of storage costs. Technological approaches, such as de-duplication tools, can free up space by reducing duplicate files. Companies can assess the impact of individual applications, especially email, which is estimated to take up 25 percent of enterprise storage capacity . Offsite storage is another option; however, companies need to evaluate third-party providers in terms of regulatory implications and security. Hardware makers can also reorient their sales and integrate software and services aimed at minimizing consumption.
7. Generic becomes the ‘it’ brand
In today’s uncertain economy, a brand that once stood for quality, reliability, and even desirability may now only represent an extravagance. In 2009, companies are likely to become more willing to try out cheaper, unbranded alternatives in attempt to cut costs. But enterprises considering changing suppliers should be sure to undertake a medium-term cost benefit analysis. Using new suppliers can require users to learn a new interface, causing a drag on productivity. Technology device manufacturers should consider how the impact of branding changes in an economic downturn. Manufacturers may need to develop low-cost or generic brands. Premium brands, however, may simply choose to suffer a near-term slump in sales, as dropping prices may cheapen its image in the long run.
8. The digital ambulance chaser gets supercharged
Digital litigation may prove recession proof, or even counter-cyclical, in 2009. The economic outlook may make companies and individuals especially aggressive in their pursuit of such issues as copyright infringement, digital ownership rights by country and industry , as well as worker health and consumer satisfaction. All companies involved with digital products and services should be wary of being caught out by legislation, whether committed against a consumer, an employee, an acquisition, a partner, or another business. If undertaking a swift launch of a product or digital application, companies should ensure that no element could lead to litigation. And any organizations considering M&A or joint ventures in 2009 should consider whether their target might become subject to digital litigation. Technology companies should also monitor how consumers actually use their products and services and the potential for legal issues; actual use can often differ considerably.
9. Social networks in the enterprise: Facebook for the Fortune 500
It looks as though 2009 will be the breakout year for social networks in the enterprise. Large IT companies are planning on spending significant dollars in 2009 on social network applications and are building research centers that focus exclusively on enterprise social networking (ESN) . Some major telecommunications companies are already deploying social networking solutions internally and as part of their global service offerings . Wireless carriers and original equipment manufacturers also see a strong future for ESN tools . Even governments are likely to deploy ESN, both internally and to interact with constituents . But while ESN looks like an easy way to capture value at a relatively low cost, applications are still being refined. Enterprises need to develop social networks so that they engender productivity and balance control with employees’ desire for privacy.
10. Sinners become saints
The volatility that characterized the global economy in 2008 may also apply to some commonly perceived public truths. The formerly vilified nuclear power is forecast to grow by 1.3 percent in 2009 , now perceived as a required source of power in many developed countries . Likewise, regulations prohibiting GM may be rescinded to help feed populations as well as conserve water . So if sinners are regarded more positively in 2009, will some “saintly” approaches become tainted? It’s possible—and governments should bear this in mind when considering all the various solutions to the world’s key challenges. As for a technology perceived as unpopular, its producer needs to take a long-term approach and keep an eye on the skills base should there be rebound. Where a technology has fallen out of favor, indigenous talent may have diminished .
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