More than 600 predictions were released by analysts this week in ICT industry research reports that identify a long list of trends, forecasts and estimates ranging from the top technologies for the year 2010 to growing tensions in the telecommunications industry as a result of convergence.
Analysts also predict a significant slowdown in IT spending in coming months and warn business users to beware; the next Y2K is on its way.
In 2008, telco networks will underpin digital communication, and the credit crunch will drive Asia-Pac acquisitions of global telcos with the mobile GPS industry undergoing rapid transformation.
According to Ian McCall, lead telecommunications partner for Deloitte’s Technology, Media & Telecommunications industry group (TMT), most of the contention in the past was around which protocols and technologies will set the scene for the foreseeable future.
However, these issues have now faded in the era of convergence where digital content is ubiquitous and the platform debates are of little consequence.
Releasing Deloitte’s annual global report, Telecommunication Predictions -Trends 2008, McCall said there will continue to be skirmishes on the platform front.
“The most interesting issues facing the industry surround the emerging battle between players from the telco and media industries and the developing world and the developed. It is going to be an interesting few years of competitive tension,” he added.
Deloitte’s Telecommunications Predictions 2008 claims telecommunication companies’ share of revenues from new media is likely to be disappointing. “In Australia, telcos need to make a fundamental decision on how they should monetize the demand for new media,” he said.
“There are two clear strategies in the market today: those that are staying chained to their incumbency as carriage companies and those that are transitioning into media services companies.”
Stuart Johnston CEO of Eclipse, Deloitte’s online advisory and implementation practice said that the development in technology with traditional media companies may also create opportunities for them to bypass telco’s completely and deliver rich content. “Developments such as this are bringing media companies into the competitive landscape for telcos,” he said.
While the credit crunch may put a brake on the pace of private equity driven mergers and acquisitions activity in 2008, this combined with suppressed global equity prices is presenting value acquisition opportunities for strategic buyers.
“Many telcos with strong balance sheets missed the opportunity to buy cheap fundamentally sound assets in the post-tech wreck period of 2002 and 2003,”according to McCall. “The smart buyers seem to be the leading operators in emerging markets moving to leverage their market capitalization and cash reserves to acquire operations in ‘developed world’ markets.”
The report also states that the steadily falling cost of mobile technology has driven an increase in its functionality. However, McCall points out that the incorporation of new functionality in an old product will not automatically drive value creation.
He believes that the mobile industry’s attempt to develop specific applications and combinations of mobile handsets and GPS may just prove this point. According to McCall, GPS technology used in Australia is well on its way to becoming a mainstream success.
Also this week S2 Intelligence Pty Ltd, released The Future of Business 2008 – 2018.
The author, Dr Bruce McCabe, said by 2010 video will invade every aspect of working life. In many occupations, from service technicians to construction workers, wearable digital cameras will run continuously through the workday.
Moreover, six out of 10 workers will have stopped deleting documents, files, images and recordings, and will keep everything as an indexed, searchable extension of their memory, for the rest of their life.
Five years from now, McCabe said the majority of call center workers will be measured not just on volume of calls but by machines that listen in and interpret the customer satisfaction in their conversations.
Leading governments will prepare new legislation using Wikis and beware the next Y2K is coming.
“Within two years, most big businesses will be on their way to spending three times as much on systems for carbon accounting and sustainability reporting compared to what they spent on Y2K,” McCabe said.
The 180 page report contains 500 predictions and draws on over 800 interviews and 2,000 secondary sources.
In addition to the changing tech landscape, new research from Compass Intelligence predicts an economic slowdown which will lower business expenditures on IT products and services.
Annual spending growth on services will decline from 5.3 per cent growth in 2007 to 3.9 per cent growth in 2008. The slowdown is expected to be temporary and by 2009, growth should increase to 4.8 per cent.
Compass analyst Amy Cravens said in the past there has been a strong parallel between total growth in the economy and growth in IT spending.
“IT budgets are vulnerable. As corporate spending tightens, IT budgets are quickly impacted as they can be easily downsized,” she said.
The chief strategist at Compass, Kneko Burney, said the first half of 2008 may prove to be more difficult for infrastructure providers, where customers will hold off on non-essential investments until the second half of this year.
“Additionally, infrastructure vendors, namely the high-end systems vendors, can expect an onslaught of competition from managed services providers,” he said.
“There has never been a better time for managed services than now.”
There are some areas where growth is likely including outsourcing services which Compass Intelligence identified as the strongest area of spending growth in 2008.
The research firm anticipates an increased growth rate for 2008 at 9.8 per cent.
Mid-sized business will have the greatest spending growth in 2008, increasing 5.9 per cent over 2007.
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