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| TOP 10 Trends |
May 2, 2005 |
By Peter Wolchak
Nanotech will take off, viruses will go wild, RFID will transform entire industries and Wi-Fi will get even hotter, but not in public settings. That’s a quick snapshot of 2005, according to Deloitte Touche Tohmatsu’s Global Technology, Media and Telecommunications Industry Group.
The group recently announced its global top 10 tech predictions for 2005, and stated that this year will be a “very exciting and daunting time.” It will be exciting because technology is set to create significant efficiencies and business gains for companies, but on the daunting side many individuals and firms do not possess the knowledge or expertise required to deal with some of tech’s darker sides, like malware, spam and digital crime.
The first step is for business people to educate themselves on up-and-coming technology, said Garry Foster, a national director at Deloitte in Toronto.
“The technologies that made our list this year touch our daily lives, and people don’t realize it,” he said. “These also really affect businesses, and again people don’t necessarily realize that.”
The 10 predictions are an interesting look ahead at what you may have to manage between now and New Year’s.
1. NANOTECH ON MAIN STREET
THE SITUATION: Nanotechnology, the control of individual atoms and molecules within a manufacturing process, is one of the most talked about but least understood developments, according to Deloitte. That is about to change, because the technology of the very small is set to become a mainstream business and consumer reality.
THE OPPORTUNITY: Nanotech is already used in many businesses. If you buy a pair of stain-resistant Dockers you’re buying a nano product, Foster said. “If you pour water on them it just rolls off. But cotton doesn’t normally do that, so what they’ve done is changed the atoms, through nanotechnology, to make the fabric stain resistant. Another area where we see a lot of use of nanotech is in the pharmaceutical industry, in the development of ointments that will only affect the cells that need it and not all the other cells. Again, nanotechnology changes the atoms of the ointment, effectively making them smarter.”
But if your company doesn’t make pants or pharmaceuticals, this isn’t essential to you, right? “While it will be more prevalent right now in those industries, this is coming soon for any industry or product that employs chemical compounds, and that’s basically everything.”
THE ADVICE: Deloitte believes nanotech will soon become a “cornerstone of every manufacturing industry and is already revolutionizing a wide range of products — from computer hard drives, to sun block cream, to car tires.” That represents both an opportunity and a threat to businesses.
“People need a better understanding of what this is and how it can improve the products or services a company delivers, because the competition will do that even if you don’t.”
2 VIRUSES RUN WILD
THE SITUATION: On the upside, the explosive growth in connected technologies — such as cellphones and Wi-Fi networks — means people are enjoying an historic level of intercommunication.
On the downside, those advances create gaping opportunities for viruses and other attacks, such as spam, SPIM (unsolicited instant messages), Voice over IP (Vo IP) spam, malware and blue-jacking, which is when a Bluetooth-enabled device gets hit with something nasty.
Take SPIM. At one time, the only people involved in an instant messaging exchange were those invited to be there, “but people are figuring out ways around that, so suddenly there are ads popping up while you are using instant messaging,” Foster said.
Or there’s Vo IP spam. “That’s a real concern. You know those anoying calls from telemarketers that come in at 6:00 at night?
They will be much easier to make once your phone is coming in over the Internet. You could start having broadcast messages hit your phone, in exactly the same way e-mail spam works.
“Vo IP is still very much in its infancy, so hackers haven’t really turned their attention to it yet because there aren’t enough Vo IP phones out there, but when there are...”
THE OPPORTUNITY: There are two. The first is for evildoers, who will cost businesses billions of dollars in lost data and downtime.
The second is for providers of IT security solutions, mobile operators, handset makers, service providers, and systems integrators, Deloitte said, who will make billions fighting off the first group.
THE ADVICE: “Companies simply need very strong policies to ensure protection of all their information, and they have to upgrade their systems and protection constantly. That’s just the nature of business today,” Foster said.
“The worst thing a company can do is say ‘Well, we’ve got the latest virus protection, we’re done now.’ This all has to be constantly upgraded to the newest and best. It’s the cost of business.”
3 ID WARS
THE SITUATION: This year will see the rise of electronic forms of identification as governments move to replace paper-based IDs with digital products. These will include passports, ID cards, and bank and credit cards. This entire effort is aimed at halting fraud and identity theft, and to speed up the process of identification and authentication.
THE OPPORTUNITY: Okay, but look back at number two for a minute: with the prevalence of viruses and other security threats, are we ready for electronic IDs? “You can’t start from the premise that what we have is secure and reliable; that’s a fallacy” Foster said. “Paper IDs are not infallible, and electronic IDs will be more secure.
For example, a passport with fingerprint technology would provide better security than a basic paper passport.”
However, Foster said moving to electronic ID does create new types of potential hacks, as a poor security implementation would increase people’s exposure to electronic identity theft.
THE ADVICE: This technology is available today — fingerprints, iris scans or facial scans, etc. — and companies and governments need to move ahead in this area, because overall the benefits outweigh the risks. As Foster pointed out, anytime someone opens a convenience store that creates the possibility of the store being robbed, but we still need convenience stores.
4 WI-FI HOT, HOTSPOTS NOT
THE SITUATION: Wireless networks — which cheaply and easily distribute network and Internet access — are a great boon to homes and offices, and new uses such as streaming music from a computer to a stereo system or networked control over lights and appliances will only make Wi-Fi more attractive.
However, fee-based public hotspots are a bust for the present, with providers fighting over what is still a niche market.
THE OPPORTUNITY: The hotspot picture is pretty bleak, Foster said. “The problem is, it’s difficult to do for users. If you walk into a Starbucks you have to login, put in your password, and then pay with a credit card, and people are unhappy about typing in a credit card number online. And then if you go to another city or even a different café, you have to set up another account with a different login and different password. And then if you go back to the Starbucks you need to remember its login and password.
“And that is cumbersome and doesn’t work well. I am not sure the public hotspot market is going to be profitable in the foreseeable future. There is simply not a lot of money to be had there.”
But if hotspots don’t fly in public the same cannot be said about more private settings.
“Where it is working well is in a home or campus setting, such as on a university. Also, hospitals are getting in on this convenience.”
THE ADVICE: In business settings, wireless gear is worth buying into, Foster said. “For companies purchasing a laptop, which should last two or three years in a corporate setting, I would not buy one without onboard Wi-Fi, because wireless networks will become extended within companies and you need to be able to connect.”
5 RFID GOES COMMERCIAL
THE SITUATION: Long hyped, Radio Frequency IDentification ( RFID) tags will finally see widespread deployment this year.
THE OPPORTUNITY: By year-end, more than 10 billion RFID tags will have been sold and used worldwide, Deloitte said, and this transformational technology will help reduce waste, limit theft, handle inventory, streamline logistics and increase productivity. And the companies that market RFID solutions will also prosper, with demand for readers, software, tags and training all ballooning.
THE ADVICE: “Any company which has a significant amount of inventory, especially if it’s high-value inventory, should really take a look at RFID and figure out how it can affect their business,” Foster said.
6 MUSIC DOWNLOADS MORE LEGIT
THE SITUATION: Illegal downloads will stay popular (as many still like free) but people will increasingly move to legal music sites, driven by the quality of online music stores, fears about viruses and malware, the continuing popularity of iPods and other MP3 players, and the fact that CD burners are now standard on most PCs and laptops.
THE OPPORTUNITY: This is the year the music industry finally gets off its collective duff and begins to embrace the benefits of the electronic distribution medium.
“When you talk about transformational technology, iPod is an excellent example, because the way people bought music in the past is changing, and changing dramatically,” Foster said. “We’re going to see competing iTunes-type stores on the Internet, and the music industry will simply have to realize that
a lot of the delivery of their product will come through other means — it won’t be HMV but through HMV Online.”
However, the bleeding will not stop and the recording industry will still lose billions of dollars this year to pirates.
THE ADVICE: Companies that sell or produce intellectual property should keep an eye on the music download phenomenon and realize that their industry could be next. Also, illegal downloads can represent a security hazard for corporate networks and businesses should have usage rules for office Internet access.
7 ADVERTISING (ALMOST) EVERYWHERE
THE SITUATION: Advertisers will increasingly connect with consumers by embedding ads using text hyperlinks, software toolbar buttons or even computer graphics in video games, software (particularly freeware), Web browsers and active desktops on mobile phones, Deloitte said. These will be less intrusive than current banner ads and pop-ups.
THE OPPORTUNITY: Embedding can be a shot in the arm for advertisers, but agencies need to be very savvy about ads that capture consumer interest without becoming annoying.
“Advertising drives a lot of things; television would not exist without advertising,” Foster said. “The problem is that as personal video recorders become more prevalent the whole idea of people watching a 30-second ad is becoming less common, so companies have to figure out how to get their advertising to consumers.
Otherwise, the industry is in difficulty.”
But isn’t hiding ads off-putting to consumers?
“People are used to seeing advertising, so that question comes down to how prevalent it is and how intrusive it is.”
THE ADVICE: “Focused banner ads, targeted at consumers who may be interested in a product or service, is something we’re going to see more and more of, and that’s important for companies to understand.
“Also, say you’re a TV production company, are you going to have a character drinking a Coke or drinking something that just says cola? Well, that depends on whether someone is willing to pay for the embedded advertising, and the truth is we will see more and more of that.”
8 BLOGS AND WIKIS GAIN SPEED
THE SITUATION: Traditional media outlets no longer have a lock on the attention of the public, as blogs and wikis (collaborative Web sites that anyone can modify) become more popular.
However, they do not represent a threat to the revenue of traditional media.
The standard wisdom is that people are busier than ever, yet many spend hours writing and reading blogs and wikis. Why? “Why does the National Enquirer sell? It is sensational and there may not be the same level of scrutiny of content, so it is simply a less filtered type of media,” Foster said.
“Ultimately, blogs and wikis will grow. They will not pose a direct threat to traditional media, but this will nonetheless be a growing trend.”
THE OPPORTUNITY: The downside of blogs and wikis is there is no assurance of quality or accuracy, “but still it is important for companies to realize these do influence people. If there is a blog on rumours around a specific corporation, that does have an impact on the company.
“So companies have to be aware, because more and more eyes are looking at these and there may be rumours about your company out there.”
THE ADVICE: Can businesses benefit from creating their own blogs and wikis? “At this point, I haven’t seen too many who have tried, but we often see many things start out as a non-traditional source and then become the traditional source. Take music downloading: it was for hackers and teens and wasn’t respectable, but now it has become mainstream and respectable. So could you see blogs becoming more traditional in a number of years? I could see that. It may not happen for years and it may need to be handled more professionally, but I could see it happen.”
9 VOICE STILL KING
THE SITUATION: Voice is and will continue to be the primary source of revenue for telecom companies, accounting for about 80 per cent of total revenue, but mobile voice volumes will continue to grow. In fact, penetration is already surpassing 100 per cent in many markets, as consumers pick up a second cell account for personal or data use, and for carriers the lucrative end of the business remains personalization products, including ring tones, real tones, wallpaper and games.
“Because the penetration is very high this industry is not going to grow like it has.
The money now is in the nickels and dimes,” Foster said.
THE OPPORTUNITY: The opportunity picture is still a little fuzzy, as service providers try out different content models. “There’s a really interesting phenomenon right now, in which people are buying 60-inch high-definition TVs and then cellular companies want people to download videos to their phones to watch on a one-and-a-half- by one-and-a-halfinch screen, and that’s crazy. People are not going to download soccer matches to watch on their phones,” Foster said.
“Some people thought there would be large dollars there, but I don’t think so.”
THE ADVICE: The telecom industry is remaking itself (see below) and some companies in that space will succeed while others will not.
Consumers and businesses are in for an interesting ride.
10 VO IP ROLLERCOASTER
THE SITUATION: The vast majority of phone calls will still be made over the traditional Public Switched Telephony Network (PSTN). On the Vo IP side, call volume and the user base is set to jump dramatically, but this growth will be tempered by underperformance on quality, consistency and reliability.
“The difference between this and PSTN is that the barrier is far lower to become a Vo IP provider than it is with public switched. So many companies will offer Vo IP, and the question will become: how well can they manage their customers? If you wanted a telephone line it used to be that you had to call the phone company and have someone set up the line, but now you can walk into a retail store, buy a package and get set up almost immediately.”
THE OPPORTUNITY: The prospects here may not be as bright as some users expect. “A lot of people think that for big corporate deployments there are huge cost savings. But really it’s savings in terms of convenience. Vo IP will give you voice mail and e-mail and everything else, so there will be some productivity gains, but those are hard to quantify.”
THE ADVICE: Proceed with educated caution, especially if you are betting your corporate communications on IP. Many companies are going with a blended approach, in which internal links are Vo IP but customers and partners still call into the firm over the PSTN system. “That’s the trend,” Foster said. “People are still leery of switching their whole phone system over, and one of the issues is there is nothing that you deal with on a day-to-day basis that is as reliable as the Public Switched Telephony Network. You pick up the phone, get a dial tone and dial. Even if the power goes out you are still able to use a phone, but Vo IP is still new and that reliability (of the public network) is a really high hurtle to jump. When people first get Vo IP and pick up their phones and don’t get a dial tone because their Internet connection is down, they are going to start getting frustrated.”
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