Tech Future: Change and Risk from Downturn

From the rise of netbooks to the adoption of SaaS, economic challenges will shift trends and create new risks.


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Posted November 5, 2008

Rob Enderle

Rob Enderle

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The current political climate is awash with the concept of change, with both parties in the U.S. having running on that platform (one, clearly, more successfully than the other). Typically people don't like change, but when you scare the crap out of them – as will be done as the economic collapse removes one in ten to one of five from comfortable jobs – you can get change to happen very quickly.

Over the next year people will be incredibly willing to explore change to cut costs and perhaps preserve their jobs and companies. Let's explore some of the areas businesses are likely to consider which might otherwise be on the back burner.

Virtual PBX and Email Convergence Hosting

This is actually like Kleenex: it’s both the name of a product class and the name of the leading company in it.

A Virtual PBX is just that – a phone service that provides advanced PBX-like functionality from a centralized location for a per-seat fee that and little initial capital outlay. PBXs are costly to buy and maintain, even VOIP PBX products, and back in the 1980s central office products that were similar to Virtual PBXs would have taken them out had they not been regulated. This is because when you can aggregate a number of companies on the same hardware, much like we currently do with Virtual Machines and hosting, you can reduce dramatically the related costs.

Hosted Email has been available for some time. Recently Microsoft itself started stepping into this market. Hosted email has also proven to be a vastly less expensive and generally more reliable solution than on premise offerings. The end goal, however, is to converge messaging into a single integrated offering, something that firms have been working on since the 80s.

Cisco likely has the most aggressive converged offering at the moment. But I expect others will use the current market environment to drive an integrated future that spans desktop phones, mobile phones, email and other electronic messaging, and especially Voice over IP.

Watch companies like Cisco, Microsoft, Ring Central, and Virtual PBX for some of the more interesting moves here, though first-to-market is a consumer offering from TelCentris called VoxOx.

Landline Elimination

Already I am seeing reports of small businesses and homes, in order to conserve costs, eliminating their wired lines and moving to just use their cellular phones. People have felt tied to their wired lines because that was the way they had always done things and, until recently, seemed more than happy to pay for both wired and cellular products. But with hard economic times comes the need to cut costs and redundant services like wired lines flow to the top of this list.

This actually dovetails with the first item because a virtual PBX works well with a cellular phone network of users and even in a big enterprise can provide a similar experience to the old office phone. I expect as we work through next year more and more builders will choose to design using cellular friendly materials and not pull wire for desktop phones.

Netbooks Eclipse Notebooks

This would typically happen very slowly, if at all, but with a massive focus on cost by both consumers and businesses, coupled with the roll out of WiMax Netbooks – which are both vastly more portable and vastly less expensive than notebooks – netbooks should ramp sharply.

What helps significantly is they are less expensive enough to build so that they actually generate better margins than their more expensive low-cost Notebook alternative.

Coupled with a rich set of Cloud-based services (I'll get to those in a moment) these products currently do what buyers have always wanted done, combine small size with a small price, to create the opportunity for a major market change. In addition they have little in the way of memory so that if they are stolen there is little likelihood that massive customer lists will go with them.

While they don't yet ship with TPMs (Trusted Platform Modules) coupled with secure encrypted flash drives or secure on-line services they could actually become less of a risk than their Notebook counterparts. And with integrated WAN or WiMax and products like Computrace or Phoenix Technology's Failsafe they can eventually be made near bullet proof.

Cloud Based, SAS, Hosted Services

Getting stuff off of the desktop and onto a service has been surprisingly slow going, given the advantages of this approach. It does force folks to do things differently but the benefits are massive and the potential ability to recover from disasters significant.

But folks have control issues and the platforms are often not seen as mature. However, with cost concerns now the overarching problem and with these services now starting to demonstrate clear benefits in a number of areas, offerings like Windows Azure are getting lots of focus and that gives us an opportunity for another major market move.

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Tags: Windows, services, Microsoft, voice, Wimax

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