'09 IT Predictions -- the Economy Dominates
Well, we blew it a year ago on the prediction that last month's U.S. presidential election would lead to historic turnout -- it didn't quite hit that mark -- and unprecedented problems with e-voting systems. The problems, it turns out, were for the most part precedented. On the positive side, we nailed the result, forecasting the election of Barack Obama. Not inclined to rest on that laurel (and a few others we also accurately foretold), we've set forth again to find out what industry analysts are forecasting for 2009, and we've talked to sources as well as to our geekiest friends and colleagues to come up with our own set of predictions for 2009.
Absent from this year's list of 10 prognostications is an entry about Microsoft finally buying at least the ad-search business of Yahoo, if not the whole company. We left that one off the list for next year because we still expect it could happen in 2008. With that in mind and in no particular order:
The economy will limp along
OK, no surprise that the economy is going to dominate the news for at least most of 2009, if not the whole year. There's something to this comment from Gordon Brooks: "I'm convinced nobody has any idea" how long the downturn will last, says the president and CEO of Symphony Services, a product engineering services firm steeped in the outsourcing market. He's been talking to bankers, listening to economists and digesting all he can stomach as he navigates his company through the recession. But we'll edge out on the limb and predict that we'll see signs of improvement by midyear, and go with Brooks' assessment that while the whole of 2009 will be rugged, by year's end an upswing will be under way.
That said, along the way we'll find "a purging of our inefficiencies and of things that had gotten out of whack," as Brooks expects. That can only mean more layoffs, and while IT departments overall are more likely to stumble through the recession in reasonable shape, we expect that some market segments, notably hardware and consumer electronics, are going to be hosed for much of the year. We'll leave particular percentage predictions for growth rates, or the lack therefore, to the analysts such as Fitch, which is forecasting no growth to a 3 percent drop in worldwide PC units as companies hold off on upgrading.
But there's good news
Economic downturns tend to drive innovation and also spur rollouts of new technologies and products to lure users to spend money. This has been particularly true over the years in the DRAM (dynamic RAM) market, where companies are focused on trying to get DDR3 out as quickly as they can. They have to get motherboard, chipset and microprocessor companies on board to support new memory chips, so that's what is slowing them down. But we see DDR3 becoming the new mainstream DRAM chip in 2009.
And more good news
Netbooks have generated a lot of buzz (and no little bit of hype) of late as more of the small, low-cost, lightweight, energy-efficient laptops hit the market. That will continue apace, but we also expect that the average price of US$400-$500 will drop to the $200-$300 range. Part of the price plunge will owe to volume production because the price of parts will drop as more netbooks are made.
Long live the iPhone
We're in accord with market researcher IDC that "it will be a grim year for mobile gadgets -- as volume growth flattens in mobile phones, as netbook PCs expand the market but threaten notebook pricing and margins, and as consolidation looms in personal navigation devices." However, we think that the iPhone is going to play a major role -- perhaps single-handedly -- in keeping the smartphone market afloat, even if it's going to need to be thrown a life preserver along the way. (That's meant metaphorically and not as a prediction that smartphone makers will be next in line for government bailouts.)
Oh, and we also think that IDC's prediction that portable media player shipments will show a first-time drop is spot-on, given market saturation and that there are only so many ways to improve on the players that will induce people to buy new ones.
Sun Microsystems will find a new CEO to replace Jonathan Schwartz. We're torn between the view that he'll be ousted and the view that he'll decide it's just time to go, but either way we don't believe he'll be Sun's CEO at the end of 2009, if he even makes it past the first quarter or so. And Sun will cease to exist in its current incarnation, perhaps being part of a blockbuster acquisition, perhaps going private.
Time Warner unloads
Time Warner will manage to unload America Online, either by spinning it off as a separate company, selling it, or using it as the basis of a joint venture formed with another company.
Windows 7 will be released
Microsoft hasn't announced a launch date for Windows 7, and while earlier indications were that it would be out in early 2010, company executives have recently hinted that it could be out around the end of 2009. With continued sluggish adoption of Vista -- not to mention ongoing inroads by Linux, notably in the low-priced PC market -- and a warm reception to a beta demonstration of Windows 7 at its Professional Developers Conference in October, we think the hints will become reality and Microsoft will release the OS late in 2009. We'll also be so bold as to predict it will be a vast improvement over Vista. Well, OK, maybe that's not so bold because, you know, how could it be worse, right? But even so, the Microsoft portion of our crystal ball is telling us that Windows 7 will be well-received and help Microsoft regain some of the OS edge it lost in 2008. (But Linux is still going to nip at Microsoft's heels.)
Well, last year we wanted to resist an entry on virtualization; this year it's cloud computing we'd like to deny, the two being kin and all. We agree with Oracle CEO Larry Ellison that the jargon is "complete gibberish" and the definitions encompass that which already exists and doesn't actually need a label. But we digress -- the point is that companies will keep moving toward software-as-a-service and cloud storage models as they aim to cut costs. SaaS and cloud-based vendors will haul in new customers and post profits. Meanwhile, "private clouds" will loom on the IT horizon as companies less comfortable with letting someone else manage their data and provide related services will set up clouds behind their corporate firewalls. Some of the more headline-grabbing merger and acquisition news of 2009 will occur with vendors focused on the cloud and with SaaS providers. Google and Amazon.com will continue to be particularly aggressive and will target smaller players in acquisition deals.
Always a step ahead
Cybercriminals will find ever more malicious ways to vex us in 2009, what with the success of infecting PDF (Portable Document Format) and Flash files with malware. Ever-more-sophisticated Trojans will emerge in 2009 to swipe data and wreak havoc. Along those lines, sometime during the year, a major online retailer will be nailed with a serious security breach that exposes credit-card numbers and personal data of thousands of customers because some people just never learn from the past.
Security vendor Finjan predicts that the number of people participating in cybercrime will continue to rise -- no surprise there -- but in a more alarming twist says the increase will occur "with an increasing number of unemployed IT professionals joining in." To that end, more news headlines involving networks being held hostage by disgruntled former employees are in the offing.
About President Obama
Assorted industry groups have inundated President-elect Obama with lists of what they think he should aim to accomplish as far as technology issues go, and even though the man surely has plenty on his plate to deal with, we're going to buck the notion that not much will be accomplished regarding technology or cybersecurity and the like as 2009 unfolds. We predict that a more technologically savvy president will push such issues more to the forefront than they have been. He'll trust in the first-ever U.S. CTO to run with the ball and get some real work done. Along those lines, a top priority will be shoring up U.S. federal cybersecurity defenses, and real, serious improvements will happen within the first six months of the year.
He'll appoint a new U.S. Federal Communications Commission chairman who will shepherd through net neutrality rules to keep broadband providers from blocking or restricting customer access to Internet content. Wider broadband access and adoption will actually happen rather than being talked about all the time as some grand dream, with an administration in place that "gets" the pivotal role of the Internet and actually uses technology. (But we haven't the foggiest idea what he and his family will name the puppy his daughters have been promised.)
(Dan Nystedt in Taipei, James Niccolai in San Francisco, Nancy Gohring in Seattle and Juan Carlos Perez in Miami contributed predictions.)