2008 Trends Watch

It’s very risky to make predictions in the tech industry. If we knew for certain what the future would be, we’d all be retired and living on our stock investments.

Besides, the tech industry has a long history of being wrong whenever there’s a consensus that something’s going to happen. Remember the consensus that Apple was dead just before Steve Jobs came back, or that Yahoo (or AOL!) would dominate the Internet just before Google took off.
Some people overcompensate for the risk of embarrassment by making undemanding predictions (witness PC Magazine’s bold forecast that smartphones will improve in 2008 and technology spending might decline). Predictions like that may drive a little web traffic, but aren’t very actionable.

So we sorted through the predictions others have made online, added our own, and compiled this list of the potential changes to watch out for in 2008, and what they mean for your business.

Will the mobile Internet open up?
This prediction is perilously close to an industry consensus — very credible sources including the Economist
and PC World predict that the wireless networks will become much more open to applications and new devices in 2008.

Don’t bet on it. Much of this prediction is based on the 700 MHz spectrum auction in the US, the rollout of WiMax networks, and Verizon’s promise that it will provide open access on its wireless network. Those are all important directional changes, but implementation always runs years behind vision in the wireless business. The WiMax rollout is slowing due to Sprint’s financial troubles, the 700 MHz network will requires years to build out, and it’s unclear if Verizon’s brave new open world will actually be any more open than the existing GSM networks in Europe and the US.
In other words, it’s extremely likely that wireless networks will become more open by the end of the decade, but extremely unlikely that we’ll see a lot of that change implemented in 2008. The implication for businesses: make long-term plans to take advantage of the new networks, but don’t plan on a big revenue spike in the next 12 months.

Adobe Air vs. Microsoft Silverlight
Both Air and Silverlight should start to see broader adoption in 2008, but the degree of direct competition between them has been overplayed. Silverlight is basically an effort by Microsoft to replace Flash, the current standard for interactive graphics on the Web. It is an attack on Adobe’s web franchise. Air is an effort to let web developers create double-clickable desktop applications. It’s an assault on Microsoft’s Windows standard. Adobe and Microsoft are a bit like two brawlers rolling around on the floor in a bar fight, each trying to stick a knife in the other’s most vulnerable spot.
So although there’s a lot of competition between Adobe and Microsoft, the audiences for Air and Silverlight are actually quite different at the moment. The implication: If you’re creating a website, by all means consider Silverlight as an alternative to Flash for your graphics (but be mindful that you’re making yourself dependant on Microsoft). And if you have a web application company, by all means consider Air as a means to give you a presence on the desktop (but keep in mind that you’re tying your site to Adobe). As for the competition between Microsoft and Adobe, it should be very interesting as a test of business strategy, but it’s not likely to have much direct impact on other companies in 2008.

Will Linux on the desktop take off?
This is another prediction that has a lot of supporters, with both PC World and the Economist predicting a big rise in the adoption of Linux by desktop computer users in 2008. We think that’s extremely unlikely in the developed world. Although Linux has improved and Windows Vista has its drawbacks, the PC market has traditionally had two standards: a leader, and an alternate for those who don’t like the leader. The PC and Mac are very firmly established in those roles, and we see no sign of the sort of intense user backlash that would change that in 2008. In the consumer PC world, Linux is a third wheel on a bicycle.

Perhaps in the developing world, where PC prices are a barrier to adoption, Linux may have a role. And perhaps in the developed world, Linux will gradually eat away at the Windows standard over the next several years. But we wouldn’t bet on Linux as a consumer PC platform in 2008.

The rise of Android
By the fall of 2008, the first mobile phones with Google’s Android operating system are supposed to ship. Although we’d love to line up with the people who are predicting Android will be a knockout win, the reality is that there are a huge number of hurdles in Google’s path. Will the OS actually ship on time? Will there turn out to be critical features missing? Will the phones that run Android be compelling? And will any mobile operators be willing to carry them? There’s no way to say. The most likely outcome is that 2008 will be a preparatory year for Android, with the real test coming in 2009.

Implication: It’s good to experiment with building Android applications in 2008, but we wouldn’t bet a company on that platform yet.

The most important trends to watch: The ones that feel like old news
We think it’s likely that the most important trends in 2008 will be the continuations of trends that started in 2007 and before. The iPhone may feel like last year’s news, but the follow-on products may be more impactful as Apple opens up third party development and (we assume) adds 3G data support to the phone. And the web will continue to eat away at traditional software applications and technology business models. Most established tech companies still consistently underestimate how much the web will change the way they do business, and how quickly the change could happen.
Macromedia co-founder Marc Canter predicts that 2008 will be the year in which it becomes obvious that social features belong in all software. From one perspective that sounds like a fantasy — who wants MySpace in their word processor? But if you look at social features as the broad process of using the Internet to engage with your users to add value and get a two-way dialog, Canter’s prediction is very sensible. It’s not as sexy as predicting that Linux will burn down Redmond, but it’s a lot more likely to happen.

(Note: this post was co-authored while at Rubicon.)

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