Top 10 Trends for 2007 High-Tech Markets:
1. The OS matters. With open source, mashups and mobile players all creating different and incompatible platforms, we believe the software platforms of the future may be layers that run across all those competing operating systems, with Adobe’s Apollo and Microsoft WPF/E both key players, coming to market in the first half of 2007. That is unless Apple, Nokia or some other mobile provider provides an OS that runs across everything.
2. Did you talk about Microsoft Vista at your New Year’s party in 2005? In 2006? And just weeks ago as we began 2007? One of the most delayed OS projects in history, some people say it marks the end of major operating system releases. I disagree, but mostly because of economics, not technology. MSFT will continue making OSs for some time, and we’ll be talking about this again in 2012.
3. January brought us the amazing sight of the demo god in action at yet another Mac World. Steve Jobs showed us what hardware design and software practicality will look like. But the iPhone is only one of a slew of new devices coming in 2007. Their fate, like the iPhone’s, will depend on how well they combine hardware and software into a complete system, something that most technology companies do very poorly. But Apple could succeed.
4. Will this be the year when the carriers’ huge investment in wireless mobile data finally pays off? No it won’t, not in the sense of revenue growth that justifies all the investments made in high-speed wireless. But 2008 is starting to look more promising, because of the open business model that Sprint is building around a high- speed wireless technology called WiMax. The main barrier to mobile data growth is bad business models, not bad technology. If Sprint follows through on its promises, we might finally get what many of us have been wanting — a gigantic hot spot with seamless coverage in every US city.
5. Google bought YouTube in 2006, and many (many!) other web companies wait in line to be the next acquisition. But the acquisition signals an important change. Google has crossed the Rubicon – and as it gets bigger, it has to make bigger and bigger moves in order to maintain its growth rate. This leaves it vulnerable to search specialists who will redefine and segment the search category into context-based search.
6. Sue Decker will be an executive to watch at Yahoo. The former CFO is now CEO-in-training while Terry Semel says they’re in a position of strength. If Yahoo is to be resurrected, it’ll need to compete differently (and change the rules, probably) regarding how search and advertising relate. This will change company fundamentals and possibly the industry. Yahoo represents a brand on the edge. We’ve talked of some of the challenges facing the company; it’s only going to get worse unless they figure out their core asset of who they are.
7. Jonathan Rosenberg of Google tells a story about the day he was in the car with Sergei driving away from an interesting company they’d visited. Jonathan was hesitant about the company’s revenue potential. Sergei said, “We’ll buy it or build it, and then monetize later.” The Internet is creating entirely new ways of making money, including advertising, subscriptions and what we could call the ancillary effect. Advertising costs a lot less to build a business around than traditional stuff. These aspects will change what is made, and how it’s sold. Watch out or someone could literally take your business away from you before you even notice that it’s happening.
8. Mobile, mobile, mobile. Get going on mobile apps, mobile marketing. It’s the future.
9. Companies like HP, Microsoft, Oracle and IBM are all working with SOA or SaaS business models. And while it sounds really good, all of us should remember that ASPs died a tough death when the bust happened. And so with SaaS, we discuss who is left exposed when the music stops. We expect SaaS to become less sexy because it’s still very hard to make money from this model.
10. Anyone focused on world events recently saw a shaky cell phone video from Iraq redefine the political agenda. As consumers, communication technology is changing our privacy, security and our experience of the world. And as companies, we will need to redefine what we think is our “go-to-market mix”. We need to move past the 4 P’s to the 360-degree marketplace. This puts big pressures on the meaning of a brand in the modern age.
And if we haven’t given you enough to think about, I want to share one more thing.
While Wikis, RSS feeds, Blogs, mashups, etc. are all good buzzwords and add value in their own right, I am seeing a much broader social and business strategy trend. It’s what I’ve termed “Permeable Corporations” and the idea is this: Once we had boundaries in our world regarding what users knew (so they couldn’t price shop), what developers created (so we could own the platform), what users said (so we worked closely with and controlled the media), or on the number of partnerships we engaged in (to create exclusivity). But that is all fading away.
In this era, we have permeable markets: users freely share information worldwide, developers build on each others’ work and innovate faster, and engaged consumers freely share their enthusiasm with others. Advertising and traditional media no longer have the same value (i.e. Hillary Clinton’s soft campaign launch via the Internet).
Where we once had walls between companies and their strategic partners, we now integrate, and together create something even stronger. I’ve heard the former CEO of GE, Jack Welch, call this “boundarylessness.”
I think that’s part of the equation. But I think what really matters is how permeable we allow our firms to be — how well we allow and encourage engagement (between users and users), collaboration (between developers and our own engineers), and connection (between companies and consumers). It’s social as much as it is technology.
Post 9/11, our sense of what matters has changed. Across the world, but especially in the US, people are buying homes, getting dogs, and staying connected on mobile devices. People don’t want to feel walled in. They want the freedom to experience and connect meaningfully with others.
Happy New Year and I hope yours is off to a great start!
- Is SaaS the key to cloud revenues? (gigaom.com)