Tech Predictions for 2009

We started the year wondering who would win their respective primaries, whether
the nation needed new laws to protect “network neutrality,” and
whether anyone in the cell phone industry could top the iPhone. We ended the
year with a new president, a tech industry in disarray and a new cell phone
from Google.

Along the way, rapidly rising gasoline prices should have spurred new interest
in telecommuting, but it didn’t. It should have inspired AT&T, Verizon
and Sprint to do a better job of finding a new and improved smart phone to compete
with the iPhone, but it didn’t. It should have led to a little more respect
for Windows Vista, which in spite of the goofy television ads is shaping up
to be a strong and secure operating system; but it didn’t.

Instead, we got the following: a WiMAX debut that turned out to be less than
impressive; the hacking of Sarah Palin’s e-mails; Comcast slowing the
downloads from BitTorrent; a Yahoo! that didn’t want to merge with Microsoft,
but in retrospect probably should have; a Yahoo! that tried to do a deal with
Google, but likely won’t be able to; and a new generation of smaller,
lighter sub-compact computers that road warriors seem to like even if they do
have tiny screens and keyboards.

In short, it was a typical tech year in the midst of a very unusual economic,
social and political environment.
As for us, the lab rats at Kent Associates took their best shots at a forecast
for 2008 and did a little better than in years past.

2008 PREDICTIONS & RESULTS

Prediction: Energy-efficient lighting will catch on.

Actual Results: We personally hate the things, but, my word,
how they have caught on. Their popularity was spurred by legislation that
phases out the old luminescent bulbs in favor of the new fluorescents; a modest
reduction in energy consumption; and the fact that the new generation of energy-efficient
bulbs are better, brighter and produce better lighting than their predecessors.

Score: 1.0

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Prediction: Payroll Services Will Become Less Lucrative.

Actual Results: We hate to concede this, but we were dead
wrong. Yes, there is more competition than ever from software packages,
banks and other sources. But accountants have hung on in this niche for
far longer than we ever thought would be profitable, and made money doing
so.

Score: 0.0 — (Note from Greg LaFollette: I told
you so!)

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Prediction: Free Wi-Fi will be available in more places.

Actual Results: Availability is way up, but so are the problems.
I mean, you can get Wi-Fi reception with your burger at McDonald’s these
days. The problem is that you can’t do any serious work with this kind
of connection due to security concerns. Therein lies the tradeoff.

Score: 1.0

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Prediction: There will be a technology scare backlash.

Actual Results: It’s just not that scary out there,
and the public seems to be growing weary of claims that it is. Viruses are
not eating your computer, there is not a predator lurking on every corner
of the Internet, and your computer has not been turned into a zombie. Practice
reasonable safe computing and ignore the “scareware.”

Score: 1.0

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Prediction: The candidates will not be kind to technology.

Actual Results: While even the new president acknowledges
that technology is important to the future, it is not likely to be the focus
in 2009. The continuing war on terror, the economy, and social issues at home
have all pushed tech onto the back burner.

Score: 1.0

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Prediction: Home technologies will move to the forefront.

Actual Results: It’s not the last mile that counts,
but rather the last 30 feet. We’re already seeing a renewed use of
Bluetooth, interconnections between portable and home devices, and better
convergence between the PC and the TV. Consider DirecTV’s new utility
to view recorded programs on the PC desktop; the integration of mini-card
readers into televisions; and the first implementation of femtocells for
cellular reception.

Score: 1.0

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Prediction: Macintosh computers will lose some of their luster.

Actual Results: Poor Mac. What luster it once had as the
“counter-culture” computer has long since worn off, and today
it is the computer of choice only for a small minority of users. Stable, solid
and innovative in a myriad of ways, the Mac still can’t compete with
Microsoft’s market share, the market power of third-party applications
and the fact that it is harder to tinker with. Still, they are not as dead
as I thought they would be last year.

Score: 0.5

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Prediction: Bluetooth will actually work.

Actual Results: It is safe to say that without cellular
headsets, Blue- tooth would have been dead by now. But the cellular revolution,
state laws mandating hands-free mobile use and new applications to interconnect
mobile devices with home theaters is breathing life into this platform.
Not to mention better performance and more consumer acceptance.

Score: 1.0

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Prediction: Video on demand will become viable.

Actual Results: Most of the cable companies now offer video
on demand, and more than three dozen other services are up and running, including
Hulu and Amazon.com. They are not yet perfect, and the selection is not yet
good because Hollywood can’t easily sort out the contractual obligations
and payments involved (for example, what to pay the descendants of Cary
Grant for royalties on his movies). Still and all, this was the year they
became services of note.

Score: 1.0

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Prediction: Internet connections will be awful.

Actual Results: We don’t want to seem churlish,
but when did “unlimited” become “only as much as we want
to give you?” Not only are the networks limiting bandwidth, video
pirates and kiddie downloaders can slow the average connection to sludge.
The answer may be tiered pricing or more capacity, but broadband these days
can seem little faster than the old days of dialup, and that’s simply
not acceptable.

Score: 1.0

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Had it not been for the bad call on payroll services, we would have had a
solid 9.5. But we’ll have to settle for a full point less, just as we
did last year. Ah, well. On to the year 2009. Here are the predictions:

2009 PREDICTIONS

1. This will be the year of the femtocell. Though it has
   one of the worst names ever for a great tech product, this handy little gadget
   will prove invaluable to small and home offices that suffer from poor cellular
   reception. The femtocell basically connects to your cable or DSL line, routing
   cell phone calls over the Internet instead of through the nearest cell phone
   tower. It acts seamlessly to keep call routing efficient, converging cellular
   and Internet technologies in a way that will make sense for homes and businesses.
   Sprint introduced its version of a femtocell (called Airave, costing $99 plus
   a $5 monthly fee) in 2008; Verizon and AT&T have plans to have theirs
   on the market in early 2009.
2. Windows 7 will suffer a dreary and slow introduction.
   The successor to Windows Vista is already in public beta testing to prepare
   for a launch in 2009. But this won’t be an easy or rapid deployment.
   While Windows Vista has proven more secure than predecessor operating systems,
   it is also bloated and loaded with features that many customers — including
   business customers — don’t want or need. The result is that a
   wide range of business and government organizations have opted to stick with
   Windows XP rather than upgrade. The new Windows 7 will be treated with some
   skepticism in its first year, and while it may eventually prove the path to
   the future its adoption will be slow.
3. WiMAX won’t go much of anywhere. Sprint launched
   the first commercial WiMAX network in the United States in 2008 with a test
   bed in Baltimore. The roll-out was nearly everything Sprint could have asked
   for, and the Federal Communications Commission gave its blessing for a joint
   Sprint/Clearwire project to build a national network based on this 802.16
   wireless technology. There are just two problems with the idea. First, there
   is no appreciable demand for the product, which seems to be most an also-ran
   replacement for Wi-Fi. And the cellular industry has been successful in launching
   its own 3G networks that are somewhat more capable at mobile connectivity
   than WiMAX. Look for Google, Intel and others to back WiMAX, but don’t look
   for it to go far.
4. Technologies for environmental action will move to the forefront.
   Much of the reason that “green” implements for environmental action
   have not reached consumers is that the technology industry was engaged elsewhere
   – building the Internet and figuring out what to do with the iPhone.
   But the gas crunch of mid-2008 refocused the industry on the fact that solar,
   wind and other alternatives can’t work for consumers because they are
   too large, too expensive and too clumsy. That will change in 2009, with a
   raft of better ideas for “going green” that are more affordable
   and less complicated than what we have today.
5. We’ll get a technology czar in Washington. Early
   in his campaign, President-Elect Barack Obama floated the idea of creating
   a cabinet-level Chief Technology Officer for the nation. Though it has not
   been mentioned since, this is an idea so sensible and important that it is
   hard to believe he would not follow through. Since the Congress dismantled
   the Office of Technology Assessment more than a decade ago, the federal government
   has been forced to deal with rapidly evolving technologies with little or
   no independent guidance and no central point from which to make national policies
   to advance technology utilization. I’m all for changing that.
6. Small computers will continue to grow in importance. They
   don’t even call them notebook computers anymore, this new generation
   of browsing and email devices from a dozen or more companies. Asus and Acer
   are battling it out for the 9-inch screen mini-computer market, while Sony
   and Fujitsu are staking out the market for 5-inch screen devices. Any way
   you cut it, these “ultra-mobile PCs” are a growing segment of
   the market that offer lighter weight and a smaller profile. And if they don’t
   do everything that beefier notebooks do, they can be had for about one quarter
   of the price.
7. Tech will get cheaper. Much cheaper. With falling economies
   all over the globe, the people who make the bulk of tech equipment in Asia
   have decided this is no time to be caught with large inventories of either
   parts or finished products. The result is that, starting in late 2008, they
   dumped products into the U.S. market at prices substantially lower than in
   the past. Televisions, stereos, computers, laptops and more can be had at
   prices that would have seemed impossible just a few weeks ago. While consumers
   will win in the short run, this product dumping is almost certain to do major
   harm to U.S.-based companies that include Dell and HP.
8. Google’s android phones will have only moderate success.
   Sure, the early adopters will rave about this new mobile phone platform, and
   it will get high marks from the third-party developers and open-source software
   advocates. But three problems will haunt the Google effort. First, the largest
   cellular network companies will not be in any big rush to let Google’s
   foot in their door. Second, Google is dabbling in a market in which it has
   virtually no expertise – usually a sign of problems to come. But third
   and most critical is that the users of smart phones are a fickle lot who like
   new stuff at regular intervals. Unless the Android operating system from Google
   can re-invent itself every six months, it will be just one of the dozens of
   “used-to-be” phones.
9. VoIP companies will die. To understand why, it helps to
   first understand that Voice-over IP as a technology (also called “packet-switched”
   telephony) is and will be wildly successful as a replacement for the older
   and less efficient telephone systems like PBX. Cisco Systems and other vendors
   will make a lucrative market out of selling these packet-switched systems
   to businesses, and the businesses will save money by making the switch. As
   will the major telephone companies, which have already made the switch. The
   problem doesn’t lie with them, but rather with the independent Voice-over-IP
   companies like Vonage and Skype. Skype was purchased by eBay, but has languished
   (though I have personally used and liked it when traveling overseas). Vonage
   has never gotten out of the venture capital stage of its life, and is unlikely
   to survive the current economic downturn. While this will be the end of these
   companies, it will not be the end of the technology of VoIP.
10. Internet companies will begin a new wave of consolidation.
    The reality is that there is not room in the marketplace for 20 large competitors,
    because this breeds inefficiencies. With fiber optic cabling slowly replacing
    copper wire as the leading method of carrying and Internet signal, look for
    the first signs of industry consolidation among network operators that include
    both cable companies and phone companies. While it is unlikely we will see
    AT&T merge with Verizon, it is not out of the realm of possibility that
    AT&T and Verizon will both seek mergers with major cable companies or
    satellite companies to enhance their Internet viability.

There is more that 2009 will bring, of course. It will include major trends
in accounting software that include continuing consolidation and the move to
Software-as-a-Service (SaaS). It will bring the battle over how to fund rural
deployment of broadband. Flexible-screen monitors may or may not finally make
a debut during the year. And much more.

Like the other major editors from this and other publications, I’ll be
off to Las Vegas in early January to assess what appears there, and to gain
better insights into how the year will unfold.