Predictions, as the famous nuclear physicist Niels Bohr put it, are very difficult – especially about the future. So it seems particularly dangerous to wonder what the main technology trends impacting the smaller company in the next 12 to 18 months will be.
In telecoms, the future probably won’t be in third generation (3G). Yet why not? Take Vodafone’s popular Live service. It’s likely to simply morph from a 2.5G service to a full 3G one. Operators are wary of the hype, but that doesn’t mean they’re not increasing the power of bandwidth, which impacts your plans for mobile applications.
GSM will evolve into 3G says the UMTS Forum, a consortium of network operators. Another industry group, the Global Mobile Suppliers Association, representing around 500 global GSM network suppliers, says 200-300 GSM networks are already packet-switched; that is migrated to the backbone need to support a third-generation infrastructure.
There is one argument that says there’s no innovation left to hope for, in any case. The extreme – or maybe just provocative – version of this point of view is Oracle head Larry Ellison, who this summer raised quite a few hackles with his suggestion that “Silicon Valley is dead”.
The logic here? The IT industry has reached maturity, and what we’ll see from now on is the consolidation of suppliers and an increasing trend to on-demand computing – the notion that users will treat computing as a utility they plug into and use as they need to, without bothering much about where it comes from or its inner nature.
That’s a valid point of view, as explored in an intriguing article published this May in the Harvard Business Review called ‘IT Doesn’t Matter’. But even advocates of this extreme perspective privately admit it’s probably a good way off yet. Instead, suggests Ian Pearson, resident futurologist at BT, concepts like utility computing “are at least 10 years off yet” for any size of company.
But what about the topics we read about in the IT press that seem to be occupying everyone’s attention? Things like Web Services, Grid or Blade computing, storage virtualisation and service-oriented architectures based on either Microsoft .Net or Java J2EE seem to be all the rage.
The reality is that most IT departments are waiting for the economy to recover before they spend money on existing technology, let alone fancy new stuff. In October, IBM’s chief financial officer told Wall Street that technology spending has ‘stabilised’, but executives are still being cautious in their spending.
You should be less focused on the distant horizon and on technology that has passed through larger companies and is now battle-hardened and ready to use by you, says Bob Honour, systems marketing manager for 3Com.
“Quite rightly, SMEs tend to lag behind rather than be bleeding edge when it comes to technologies. Now some bigger companies have made these things work, it’s time to start exploiting them.”
Forward-looking companies like yours should be looking at the security, speed, future requirements and growth of your network, as well as innovative solutions such as voice over IP (VoIP) and wireless that will change working practices and allow you to compete on a level playing field with larger businesses, Honour adds.
Gigabit Ethernet, a technology that used to be solely the province of big companies, is a prime example. In the past 12 months entry level costs have plummeted to less than £25 per Gigabit port. “If you are already using Fast Ethernet it is likely that you are also using bandwidth-hungry applications, so moving onto Gigabit Ethernet would be the logical progression,” says Honour.
He sees technologies like virtual private networks (VPNs) as well as WiFi, as being ripe for the taking for the smaller company. “I also am sure that converged networks [VoIP] are set to explode, which will usher in a whole wave of exciting new applications around unified communications.”
John Coulthard, Microsoft’s head of small business, agrees. “If you think back even two or three years, high-speed networking and server hardware and server software technology was the province of mid-market companies and enterprises, armed with big budgets and highly skilled IT professionals or those small businesses fortunate enough to be able to afford to pay the entry price.”
Coulthard adds: “With the technology and price/performance advances we have seen in the past couple of years, we can now place all of this business value into the hands of small businesses at a price they can afford and a move them from a position of technology exclusion to inclusion.”
And don’t forget about government. Initiatives like so-called ‘joined up government’ may be less talked about but there’s still a clear commitment to get more UK companies working and selling to each other online, and for business to report back to the state in electronic fashion.
Coulthard says: “We will see increasing trends for online integration like tax returns and forms, contracts and payments, auctions and tendering. Government wants to take the cost out of doing its business – if small businesses don’t get it right, the costs will be stuck on the small businesses’ bottom line.”
But don’t think the only thing you can learn from bigger companies’ use of IT is what kit works or doesn’t work. Next year could also be the year you learn from their way of doing business, says Enrico Camerinelli, programme director, technical services, at analyst firm Meta Group.
“It’s surprising, but often the most rigid organisations, the ones most resistant to change, are smaller companies,” he warns. “These people are coming under increasing pressure from both customers and suppliers, and resistance to change is no asset in these circumstances. Look to stories of how bigger companies are re-engineering themselves and adapting their strategies.”
A similar suggestion comes from John Snyder, vice chairman of this year’s Cambridge Enterprise Conference, an event that gathers start-up hopefuls in the UK’s tech sector. “Outsourcing is no longer just an option for big companies, but everyone,” he says. “I see a revival of technologies like application service provision, through renewed interest in companies like Salesforce.com, and a greater willingness to spend money by users on these solutions as they see that they can help drive down total cost of ownership (TCO) across the board.
“SMEs who may have outsourced only payroll should look at outsourcing areas like invoicing next.”
Predicting the future can be hard. So let’s agree to look back at this document in 12 months’ time and see how much of it is completely wrong. After all, that’s the fun of working in the IT industry.
3Com’s small business suite can be found at http://www.3com.com/solutions/en_US/small_business/index.html
BT futurologist Ian Pearson’s provocative views are at www.btinternet.com/~ian.pearson
What’s coming: the experts’ views
No two IT experts or visionaries contacted for this article came out with a consistent list of what’s to come. But here are the trends that seemed to emerge:
Wireless – and wirelessness
The growth of WiFi (wireless LANs) seems unstoppable. Though Bluetooth seems to have spluttered, expect big drives from telecoms service providers to offer as much cable-free access as they can in 2004. When and how people will pay for it seems to be still open to question, but suppliers are adamant that computing on the go will be the next big thing (or one of them).
Broadband is coming – some, like BTOpenworld, would like to say it’s here already. This will impact both users of the web, who will expect better sites and services as the general standard of the experience improves, and smaller companies, who have not yet developed compelling websites or even ecommerce
You can expect applications providers to spend even more time and money next year trying to sell you cut-down versions of their enterprise resource planning, supply relationship management and integration software. This is a good thing, according to people like Enrico Camerinelli of Meta Group: “Bigger customers are starting to oblige you to work with them through these kinds of methods, so now is a good time to learn how to use them properly. There are also very affordable systems from companies like Microsoft with its Navision solution that should be evaluated. I also see revived interest in electronic trading hubs.”
It may well be worth looking at VoIP if you haven’t already. A twist on this idea is revival of using the Internet itself (as opposed to private networks) as a phone network – check out internet telephony sites like www.skype.com and www.vonage.com. Another possible new trend, say some, is more use of instant messaging as both a low-cost communication and customer support tool.