Again, I want to share about Technology Trends for 2008. First in mind, technology touches us all - in every aspect of our life. Our digital lives have been transformed in the past ten years. Computers have digital representations of our personal and work lives embedded in our emails and documents, cellphones connect us instantaneously with family and friends, and websites assist us in the search for information and to complete transactions. Technological change continues to accelerate, providing the visionaries with an opportunity for that little extra competitive advantage which can make all the difference between market leaders and the also-rans. As we look at the various technology trends last year, it is important to understand the underlying forces of change and their evolution in the years to come. This is how new opportunities and business are created. Since change is happening across many dimensions, it is also important to get a who-listic view of the world around us.
In addition, there is a need to develop a perspective that centres around emerging markets. These are the next big growth markets and need solutions which are likely to be different from the developed market. Increasingly, many of the world's largest technology companies are looking to create specific emerging market groups and solutions. The developed world has seen computing and communications evolve through many sequential revolutions: personal computers, local area networks, client-server computing, enterprise software, Internet, next generation of network, mobile phones and broadband. Next questions - what happened in the developed markets over two decades is being compressed in the emerging markets in a few years. This means that more than just technology innovation, there is a need for agility, speed and localisation to tap into the opportunities by technology's newest customers. Is it expensive?
To put this context, take a look at China and the changes that are underway. Cellphone adoption is growing, even China Mobile just announced over the course of the quarter, they added 17.3M new customers, and the phone is morphing from just a voice device to both a possible alternative to a computer and is becoming a fashion statement. Computers are becoming a wee-bit more affordable with the likes of AMD vs INTEL making inroads with cheaper processor. Broadband access is starting to become available at reasonable price points. Open-source software creates an alternative to piracy and non-consumption. Internet e-commerce is starting to pick up again with services like airline ticket booking which remove a pain point in daily lives. Technology is no longer a decision to be just made by the management in the company. It is increasingly going to get embedded in multiple aspects of our lives. It is a weapon that needs to be leveraged by top management not just in the marketplace, but also across the extended enterprise. In this context, it is helpful to step back and take a look at ten key technology trends that we are seeing around us and understand their impact for our personal and business lives.
2008 Trends:
1. Digitisation
Fundamental driver across the technology landscape is digitisation - once things move from atoms to bits, or analog to digital, it becomes possible to do a wide array of transformations which previously were not possible. For example, digital music. For a long time, as the industry has shifted to digital content, it has become possible to not only time-shift consumption via customised playlists on devices like Apple's iPod, but also to distribute it via the Internet for nearly zero-cost, fundamentally undermining the business model of the industry. Something similar is happening in telecom with voice-over-IP. Traditional telcos are realising that the ability to digitise voice and transmit it not over proprietary networks but over the Internet threatens their core business and customer relationship. The digitisation of information and business processes means that countries like China can use their low-cost advantage to offer outsourced services to global organisations.
The process that began with the availability of the personal computer a quarter-century ago is now cutting across the value chain, creating an end-to-end integrated digital flow. From our homes to enterprises, digitisation is the starting point for many disruptive innovations as part of "creative destruction", driving significant changes across industries, bringing not just change but also opportunity in a world that's becoming smaller and smaller. Next Question - cost and security?
2. IT Commoditisation
Back to 2007 - silicon, Storage and Bandwidth are available in plenty. Processing power doubles every 18 months, storage capacity every 9 months and available bandwidth every 12 months. This has been happening for some time now, and is likely to continue for the foreseeable future. The result is there for us to see. Google has built a massive platform with more than 1Mio commodity computers and is in a position to offer free services like email with a storage capacity of 1 GB email. The cost of 1 GB disk space has fallen to just about $1. In countries like Japan and Korea, bandwidth of the order of 30 Mbps is available for about $50... great huh?
Global investment in technology continues. There are more than a billion cellphones around the world, with 2007 seeing sales of more than a billion phones which provide all kinds of functionality ranging from digital cameras, multimedia messaging, FM radio, TV and even some basic computing functions. Again, even in China has wireless data networks in hundreds of major cities with connectivity costs of in minumum (China Mobile vs China Unicom). Seemingly, technology is ubiquitous and everywhere. Or is it? But again - in countries like China, adoption of IT still leaves a lot to be desired. Only the very top of the pyramid uses technology. There are four barriers which need to be overcome for these countries to benefit from the commoditisation of IT: the information barrier, on what technology can really do; the desirabaility barrier, through the availability of relevant and useful software and applications; the manageability barrier, so that IT can be easily deployed and leveraged; the affordabaility barrier, which makes it available at prices that local users can pay.
3. TCO Issues
What is TCO? Term of Total Cost of Ownership - as spending on IT has increased in enterprises, there has been an increasing attention being paid to the TCO in technology. It is not longer just the upfront cost paid for hardware and software that needs to be taken into account, but the overall cost that goes into administration of the systems deployed. As growth has slowed, increasing attention is being paid to the TCO of technology in organisations -- new terminology is 'managed services'.
4. Real-Time Application
The dream of the real-time enterprise (RTE) has been there since the earliest software systems were written. Success has been achieved to varying degrees by different organisations. The challenge is what fuels the various business software companies and the looming consolidation in the industry (considering Oracle's bid for Bea recently). In business, the differentiator is increasingly not in the machines used for production, but in the processes that make up the information refinery. An example of a real-time enterprise is Cisco, which is known to be able to close its books every day. Service-oriented architectures are helping glue the various information silos within the enterprise to create an event-driven platform, built around business processes.
Now, the increasing availability of affordable high-speed network connectivity and its derivatives is letting certain functions within the enterprise interact in real time. The business drivers for RTE technologies continue to drive adoption: Reducing the amount of time it takes for information to be transmitted between functional areas within an enterprise and its supporting supply chain will yield significant business benefits.
5. Security
If there is one single word that is uppermost in 2008, it is security. The proliferation of viruses, spam and spyware have caused headaches aplenty. In addition, the ability to connect various company locations via a virtual private network (VPN) over the Internet also means that data needs to be sent securely. Firewalls, Intrusion Detection, Encryption have all become part of the technology vocabulary. If anything, the emphasis on security will continue to increase in times to come. What we consumers need is a simple, unified protection plan to counter all of these threats. And the computer, software and Internet industries have badly failed us in this regard. They would rather dump the security mess in the laps of users than solve it at the level where a solution really belongs: in the operating system, or the hardware, or the online provider's servers. Next Question - so, anyone up to it?
6. e-Business (raise of dot-com?)
Again, Internet has become a key ally in doing business. A company that neglects its website may be committing commercial suicide. A website is increasingly becoming the gateway to a company's brand, products and services - even if the firm does not sell online(?). Again sample in China (although I don't understand their language), I am seeing an increase in online commerce. The world of e-business is here in full force. And, if we take a look back in the late 1990s when the Internet hype was at its peak, the belief was that the Internet would change everything. Every industry would be transformed. If something wasn't on the Internet, it didn't exist. Then, reality set in. There are many businesses which the Internet has made a difference too. By reducing transaction costs, it has helped consumers get lower prices and forced producers to become more efficient. By bridging geographical barriers, it has allowed companies to open up new markets. Search engines like Google have allowed small businesses to reach out to potential customers far more cost-effectively than other media. Electronic marketplaces like eBay have seen many build businesses around them.
As with any new infrastructure, it takes time for its full potential to be realised. Increasing broadband availability will only accelerate the trend. As the ecosystem around the Internet gets put in place, we are moving closer to the future where e-business and e-commerce become synonymous with business and the commerce, and the "e"-prefix simply disappears. Next Question - when?
7. Collaboration
Productivity emerges from teams of people working together to achieve a common goal. Making groups more productive is the next big challenge that is being tackled by many companies. The focus now has been on tools that make writing - individually and in teams - easier. One of the key requirements - really a very simple one to have, but something so sorely left out in the current system, is a presence indicator. Much like in current IM systems - telling us who's available, who's logged in and therefore present in the office, who I can ping for a query, and ensuring that a response is received. In the case of his organisation, currently, they'd send an email, wait for a response, followed by more emails as reminders, and finally in sheer frustration, pick up the phone and make a call - which can be expensive if outstation (as is the case very often in their line of business) and does not always ensure that they will get a response - what if the person is away from the office? Well, somehow - we aren't there yet, but getting close. A combination of new technologies are coming together to make it easier for us to work together in groups - be it in the workpace or among friends and family.
8. Always "On"
I am trying to make sample in Asia biggest nation, China - around five years ago, it would have been hard to imagine that Chineses people would be buying cellphones at the rate of nearly 2 million a month. Similarly, today, it is hard to imagine a broadband China? but that is exactly what we are about to see. The next couple years will see Chinese consumers and enterprises enveloped in ubiquitous, high-speed connectivity from multiple sources - wireless, DSL, cable and satellite (hopefully, not only in big major cities). Complement this with WiFi-enabled laptops and smartphones, and the always-on world is at hand. This will necessitate a change in the not just employees work, but also the interactions between enterprises and customers.
In China, China Mobile and China Unicom (well, only 2 big players *sigh*)'s data services have become very popular with laptop users as they provide instant access from anywhere. Year 2008 will see cellphone sales of nearly next billion. Each cellphone makes its owner instantly connected to a worldwide network. As more and more features are packed into cellphones, they are becoming cameras, radios and TVs, gaming devices, and even computers. Smart radios are being embedded into all kinds of devices. Also, microchips embedded in products are creating an 'Internet of things'. Also, a mix of broadband and wireless technologies are providing bandwidth aplenty anywhere and everywhere. From WiFi to WiMax, Zigbee to Ultrawideband, Mobile-Fi to 3G/HSDPA or even 4G(?), there is no space which can remain unwired and no device which can stay unconnected. Backhaul networks on fibre are creating a world where it is now even more economical to carry voice over packet-switched IP networks. It is a world where, according to one of the Skype co-founders, telcos will become software application providers (hahahaha...)
The world of always-on in a natural manifestation of the convergence of various industries - computing, telecom and consumer electronics. It is a world which telecom- and computing-poor infrastructures like in developing countries can leapfrog to, with the right vision and will. Just like South Korea and Japan has done.
9. Advanced Outsourcing
Since 2007, outsourcing is a fundamental trend, and there is little any US government is going to be able to do anything about it. What is clear is that companies globally are relooking at their cost structures and leveraging the commoditisation that has taken place in IT as well as services to focus on what they do best. It is hard to overlook a 30-70% cost savings for certain processes, but that is just the start. What outsourcing also allows is to also fundamentally redesign business processes. This is what companies like IBM, PwC, KPMG, etc; are onow offering the global majors.
Somehow, the goal is not to replace people. The people are where the creativity comes from. But you take the repeatable, standardizeable pieces and put them in software that we deliver either as products or as specialized services. The humans can apply more of their creativity to the piece that only humans can do. The emergence of Web services is the technological base and the lingua franca that makes the idea of a services stack possible. You have to somehow bridge the world of software to the world of business processes.
10. New Emerging Market as Drivers
Overviewing first phase of the technology revolution over the past few decades has touched the lives of the top of the global pyramid of consumers and enterprises. It is only in the past few years that technology has started making its way into the lives of businesses and families at the bottom of the pyramid - in the emerging markets. Because of the lack of legacy and an inherent need, adoption of some technologies has turned out be extremely rapid. Sample that I have read, in China, about a million computers are purchased every month, as compared to 5 million cellphones. Now imagine what would happen if computers were available at the price points of cellphones. We will then see annual computer sales at 20-25 million for many years to come, making China among the top three markets in the world. What does that mean for the global technology players for whom China has so far been a rounding off error in their revenues and profits? Emerging markets, by virtue of their large numbers, have the potential to be the hotbed for disruptive innovations. They are the new markets which can ignite growth at technology companies. But at the same time, they need solutions which need to be at different price-points from what the developed world has been paying. This is both a challenge and an opportunity.
End of the story - in the world of technology, like time, does not stand still. Innovation and change are the only constants. In Asia, place that I am currently staying, have the opportunity to leapfrog by simultaneously leveraging many of the new innovations that the technology industry is making available. The force of digitisation is at once a threat and an opportunity. The choice is for each one of us to make.Next Question - do you?
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