Year-end prognosticators have their work cut out for them. Most predictions made a year ago were undone by events few actually foresaw. Now things are as uncertain as ever. 2009 could bring a healthy recovery, or another financial crisis could set us back even further.
So rather than specific predictions, it seems more sensible to look at current trends that could shape the tech industry next year. Here are five that, barring further upheavals, could separate the strong companies from the weak.
Big names get bigger. Bad news for startups: Capital and customers alike are seeking the safety of well-known, well-funded names. Take a minute and think of the most respected names in tech. Google? Apple? Amazon? Whether they finish the year higher or lower, the more stable they look, the more they will outperform the broader market. They will have a larger share of attention, and possibly sales.
That won’t be the case for all big companies, especially those slow to update their business models. Microsoft may be aggressive about moving into newer markets, but its core operating-software business may be a drag on growth. Nokia and Motorola have lagged in innovation for years, and must catch up this year or risk falling into oblivion.
The netbook lifestyle. Netbooks are looking to be a big trend in 2009, but it’s unclear whether they’ll be as popular as handhelds and PCs, or a thin niche sandwiched between them. Their fate depends in large part on applications that make them as useful as their bigger and smaller siblings.
Acer is emerging as an early leader in netbooks, but HP, Lenovo, Dell and possibly Apple are competing as well. Who will lead in netbook apps? It’s up for grabs. Google and Apple could take it, as could longer shots like Yahoo and Microsoft — or even a small company not yet on the radar.
Companies get virtual. CIOs plan to spend 2 percent less on IT projects next year, a survey by UBS suggests. Spending on virtualization software will rise 6 percent (down from 10-percent growth in 2008), although UBS cautions it still isn’t a priority in many IT departments.
That could change as CIOs wake up to the efficiency — and potential savings — that virtualization can bring. VMware rules this niche, with Citrix also a player. IBM, Oracle and Microsoft will try to grab market share, but it may require them to alter their licensing terms and cut into profit margins.
Cloud over privacy. It’s not much of a prediction to say cloud computing will advance in 2009. But that could make this a make-or-break year for privacy issues. Yahoo and Google have taken baby steps toward protecting privacy, and how they and others act will turn the the cloud into either a safe place for personal data or a hostile one. And how secure we feel in the cloud will in turn affect the companies building it.
On a separate but related note, 2009 also looks to be a crucial year for net neutrality, so the fate of the individual on the Internet may be cast in stone by year’s end.
Business models sink or swim. Several new business models have emerged this decade, among them VoIP, social networks and online video. But with a few exceptions, they haven’t been profitable. 2009 could be something of a crucible for them. Companies offering products or services for free will be tested as ad dollars remain scarce.
The pressure will force companies to be creative about monetizing technologies that have proved popular. Those that simply won’t bring profits will survive, there just won’t be any publicly traded companies behind them.