ITC Issues and Trends for 2008    (Click here for a PDF version of this report) In 2006, we made a similar type of series of predictions in turbulent times. Our accuracy for the year was the highest we have ever achieved. 100% partially right and 67% completely right. While we thought that 2006 would be turbulent, the economic, social, political, and business upheavals we see from the beginning of January 2008 makes 2006 look like a ripple in a stream As we enter in 2008, we see a growing potential for world economy stagnation and possibly as well, facing a recession, (or worse), a much greater diversity between rich and poor, threatened conflicts in many countries including Europe, and IT evolving so fast that new ideas now get launched in less than a year, and becoming obsolete before the next. Competition is shifting from within the US and Europe to between it, Asia and India (or both), and major political directional changes occurring not only in the US, but also in Europe (UK, France, Italy etc.), Palestine, Australia, and even within India, China and Japan. The 2008 Olympics are almost upon us. The world impact between the 2008 and 2012 games, we believe, will be even more startling than between the 2000 and 2004 games. Social issues and the environment, both soft issues, begin to dominate both personal and business decisions across all sectors including IT and Telecoms. Gen Y (also known as the " Millennials”) are the 18-29 year olds the Telecom, and IT industry see in 2008 as the new “ baby boomers” to sell new methods, products and services just coming on stream. But they are worried about jobs, debt and the status of the world. Their uncertainty will stifle new take-up and any concept where value for money is not clear. Their interest and viewpoint will be critical in any new impacts on the economy, business stability or world politics in upheaval. As the IT strategic model has so rapidly changed, so has Telecoms and by 2010-12, that change will be complete. CEOs still working on the old revenue and profit model who haven’t moved by end 2008 will be too late to cross the conceptual and financial bridge of change. Like a rubber duck in a fast moving stream, we are, today, less sure of where we are than we have ever been since 1900, or where we are really going. Nonetheless, we give our 12th edition of our ISSUES and TRENDS forecast for 2008 (in no particular order): China and India to collide and coalesce on offering services (India) versus products (China). Broadband household penetration slows, but expands the peer-to-peer business and content relationships held together by IT portals, social websites and blogs. New mobile connections begin to trail off in developed countries as saturation and multphones (per user) decrease, as growth continues on developing continents. Apple, Nokia and the video and DVD content market fight over distribution control. Mobile revenue rises do not offset the fixed voice and data revenue losses. Telecom operators still hanging on MMM (millions of minutes a month), revenue models see the grim reaper approaching. Digitalisation forces open new spectrum as analogue TV shutdown begins freeing up spectrum for new players like AT&T and Verizon in the US and a mix of small and medium service provider players in Europe (many not carriers). Wholesale networks move to niche market capacity needs (geographic and sub industry) and to growing security and throughput balance needs. The shifting global economic balance of power will influence future IT & Telecom development growth in favour of China, India and Asia, to the determent of the US and European players. The "low cost" PC begins to broaden the IT user base in developing and third world countries, just as the "low cost" car and "low cost" critical survival medicines begin to impact the same world, with both the advantages and disadvantages being highlighted to the players for future response reactions. The battle between web TV and IPTV pitches the entertainment industry versus the web provider’s web cam, peer-to-peer and home healthcare applications with no winner in sight. The impact of reduced roaming charges forced by the European Commission marks the beginning of an even bigger EC/Telecom’s battle on pricing, with more revenue reductions for mobile text, data, video and more realistic prices for users. Open wireless Wi-Max gets mixed results as health and environmental impacts are raised along with demands for greater reach and low capital expenditure. Triangulation by Wi-Fi does for wireless users that GPS on mobile so far hasn’t achieved, more location based services for finding and being found. Spam and Fraud management reaches a “make or leave” necessity for mail users with their service providers. Music and TV viewing rights remain a major source of conflict between writers, content, producers and distributors. Advertising revenue rather than downloads is the key. Telecom providers without a real strategy for growth through real diversification from existing shrinking network based voice/data revenue models, face network revenue/profit meltdown by 2009 based on their lack of speed in progress moving network and users to higher speed downstream Broadband, VoIP networks, new applications, gaming, new peer-to-peer content and progressive "eyeball" advertising as traditional voice revenues continues to decline. Video revenues still limited to web cam until new revenue sources and applications grow. TeliaSonera stands to lose its network altogether as other regulators and carriers watch the impact for their own situation. ISPs gain a new prominence as service providers. Mobile revenues suffer similar pressures as new pricing impacts and new applications are not able to cover 2008 profit losses from fixed services. Telefonica and its recent acquisition, Telecom Italia begin to leverage its leadership in new business areas, as BT continues to roll out its NGN network, and KPN continue to leverage its markets. Other carriers wait to see what they, Verizon, and AT&T look to in Europe for a counterbalance to US market financial pressures. Microsoft remains under continued pressure from the EC monopolies commission even after losing its appeal case in 2007 and a rejection of its push for new (Microsoft based) standards. Global positioning via Wi-Fi creates a new laptop location and identity business, being overlooked by mobile operators GPS applications. PMR finally gets standardisation across Europe. Digital Radio expands from a niche market. The two dominant influencing application issues for 2008 will be managing risk (versus investment), and security. The loss of personal data and consistent analysis of the business (Sarbane-Oxley/Basel II), now mean corporate survival, not just success. Risk audits will become continuous. Social networking and the users involvement in business processes will be radically addressed with mixed results. Further growth of retail sales via the web, particularly at Christmas, drives retailers to focus growth on Internet shopping as it takes more buyer attention for retail spending. Fibre to the access network gets greater attention as peer-to-peer applications grow and access competition increases. The focus will be business first. As Apple’s market success grows, more hackers will focus on its holes in the software. This will mean a more visible security comparison between Microsoft’s Vista and Steve Jobs’ OSX Leopard. CIO key tasks for 2008 are to ensure satisfaction to current customers, by delivering what they expect from their provider. Budget cuts by 10% or more in 2008, can be expected and global technology growth will slow. Carrier Ethernet will evolve more slowly than service providers believe, in order to ensure deliverable SLA performance and internetworking agreements for end-to- end services. To do this they must successfully replace TDM and Frame Relay services and deliver MAN & WAN services reliably. IP and Centrex, already having a slower than expected growth, will receive an impetus from new business areas like remote health diagnostics. Partner sales will only be enhanced as business benefits are clearly identified. Broadband overselling becomes a key issue as promised speeds and services are not what are delivered. Churn of users to other providers in the mobile distribution market in the UK, leads to fewer distributors fighting over fewer new customers in smaller towns. Rural Broadband deployment, which gets a push from the user groups and the European Commission demanding equality, stalls in the wake of other Economic necessities. The US wireless industry faces a potential decoupling of linking specific phones to a single network provider. An opportunity for Steve Jobs, Google and the US user commentary for programme cross-sharing and lower prices. If it could force mobile prices downward, the EC will be interested in intervening. More cable TV programmes move to the web, like My Space and Wikapedia. Larger computer screens ease the change. The change takes place as converged applications, interactive TV, and managed home networks grow. IPTV is hindered by supplier infighting on how to grow the market. Subscription-free digital services by UK providers ITV and BBC will launch a one off payment for 200 Channel English dominated service, which threaten carrier providers key potential growth markets. Broadcasters like the BBC move into video online sharing so entertainment and amateur programming begin to intermix, viewing time becomes relative, and viewing locations become ubiquitous. Activities by major broadcasters to offer free news to mobile and Apple users, expands the potential new revenue loss to carrier service providers. France enters with mobile TV services. The EC continues to force Carriers like Deutsche Telekom to open competitive markets for its new Video and 3D services, while continuing to push for regulatory super-powers to address this issue, a common European digital radio/video spectrum for transnational services, as well as more cost based basic services. The FLO Forum acts as an independent influence pushing for more rather than less choice. But the commission is striving to flatten individual national biases that favour the local incumbent. Lack of IT skills has created a gap in skilled company IT resources in the UK, Germany and several other EU countries leaving many companies unable to execute major IT plans in 2008. This problem will be too large in the year to be resolved by migration across national borders. The need for more IT degree graduates is acerbated in a period when communication between the IT department (the CIO) and senior management (the board) improves. What do you think? Your comments are always appreciated. Why do we do this? If we didn’t have a position (at least to start with) how can we address many of the complex issues facing the ITC marketplace in 2008? What do we do with these changes? Let us assist your organisation in developing new creative business strategies to help you address these disruptive market changes. After all, we’ve been successfully doing this for over 25 years Contact us now MaceCorp Limited Westerhouse Madeira Road Surrey KT14 6DF United Kingdom Tel: +44 (0)1932 346811 Click here to email us now