Plunkett Research Reveals 10 of the Biggest Trends in the InfoTech Industry
Houston, TX. May 29, 2009
Plunkett Research uncovers the 10 biggest trends in the InfoTech industry. These trends will dictate the wave of progression in this fast moving industry as reported in Plunkett’s InfoTech Industry Almanac, 2009 edition.
“The InfoTech industry is galloping into globalization at a very rapid rate,” says Jack Plunkett, CEO and Editor of Plunkett Research. “Research, development and manufacturing of components and completed systems have grown quickly in the labs and manufacturing plants of India, China, Taiwan, Korea, the Philippines and Indonesia, among other lands. Computer services continue to move offshore quickly, particularly to the tech centers of India. Asian PC brands are gaining strength, including Acer and Lenovo.”
Plunkett’s 10 Biggest Trends Affecting the InfoTech Industry:
1) Memory and Storage Needs Soar While Miniaturization Lowers Prices - The unstoppable trend of miniaturization is fueling tremendous product innovation. This trend generally leads to better products at lower prices, in addition to devices that use less energy. Miniaturization interacts perfectly with the trend of convergence—where voice, video, data, telephony, entertainment and more are converging for use on digital devices. In turn, technology consumers will need more and more amounts of memory and storage. Phase change memory, introduced in 2009, is a memory chip technology that stores data by causing material to alter from a crystalline phase to a disordered phase. Nanotechnology will enable ever-increasing levels of storage on smaller and smaller devices. Another storage wonder is the holographic optical disk, which not only stores data on its surface, but also in volume throughout the depth and breadth of the disk.
2) Small, Cheap Computers and Netbooks Sell - The sales of laptop computers surpassed the sales of desktop models for the first time in 2008. Laptops are expected to make up about 55% of all computer shipments in 2009. Consumers who want to make a lower total investment, including those in less developed nations, offer a sizeable growth market. Another market for lower-priced PCs exists in less affluent homes and in situations where a second or third computer is needed for a household. By early 2009, small, lightweight laptops called netbooks were the increasingly popular choice of consumers looking for low-cost alternatives to full blown PCs or laptops. Netbooks typically offer small screens of 10 inches or less, weigh about three pounds, have no optical drive and run on inexpensive processors such as Intel’s Atom (which sells for about $35 to $40, compared to $150 for a traditional laptop chip).
3) India and China PC Markets Targeted by Manufacturers - In India, the government eased tariffs on imported PCs and parts in 2007. Microsoft estimates that Windows-equipped PC prices in India fell from $500 to $350 since 2005. Indian PC sales are forecast to grow by 13.7% to reach 11.1 million units in 2009, largely due to a surge in laptop sales, which are expected to make up one-third of the country’s PC market or 3.69 million units. Meanwhile, PC sales in the Asia Pacific region outside of Japan began to slow during the end of 2008 following a period of rapid growth. PC component sales are also declining, particularly in China. Growth is expected to rebound in 2010 by 9%, with another 11% jump in 2011. The good news for 2009 is that sales of inexpensive laptops and netbooks, especially in China, are expected to continue to grow.
4) Supercomputing Hits 1.105 Petaflops - For the past several years in the U.S., the focus of supercomputing has been on the linking of clusters of commodity processors designed for everyday applications. These are known as parallel configurations. In contrast, the Japanese focus has been on specialized, massive single architectures developed for the high-performance market. As of early 2009, the leader in supercomputing is a $133 million IBM system at Los Alamos national Laboratory that’s nicknamed Roadrunner. The system clocked 1.105 petaflops. Of the top 10 supercomputers in the world as of 2008, seven are located at U.S. Department of Energy facilities and nine are located in the U.S. The fastest non-U.S. system is the Dawning 5000A at the Shanghai Supercomputer Center, and is the largest system that operates using the Windows HPC 2008 operating system.
5) Open Source Systems and Software are Backed by Major Software Firms - Long-term commercial operating systems such as Windows and UNIX continue to face serious competition from Linux. The increasingly popular Linux is a free and open operating system spreading through corporate data centers like wildfire. The phrase “open source” is used to denote the fact that the vital programming, or source code, underlying the software is open to all programmers at no cost. This makes it easy for a programmer to adopt or modify the code for his or her own purposes and then to share any changes or improvements with the programming community. Many companies that were previously contracting with Microsoft or Sun for costly operating software packages have replaced them with far less expensive Linux operating systems. Open source hardware and software spending reached $21 billion during 2007, and is expected to grow to $49 billion by 2011. It’s an uphill battle, however, since Microsoft’s Windows XP or Vista was still loaded on 87% of the world’s PCs in late 2008 (according to Microsoft), and Linux expenditures account for only 4% of the $242 billion spent annually on software.
6) Web Services, XML and .NET Grow - Web services provide a standardized way for one computer system to talk to another—whether it’s across a local area network or via the Internet. Web services allows for software of any type on one computer to pick up data that is tagged with a special language known as XML (Extensible Markup Language) from another computer. While web browsers allow users to access data on the web using protocols like HTML and HTTP, new web services protocols enhance the online experience by allowing computers to interact with one another. XML allows greater functionality and the interchange of data from computers running different operating systems and programming languages. One of the primary protocols in use by web services is SOAP, or Simple Object Access Protocol. SOAP is an XML facilitator, through which different computer systems can communicate. These protocols are enabling companies to make their content and functionality available anywhere.
7) Cloud Computing, Software as a Service (SaaS) Point the Way to the Future - Many InfoTech industry observers believe there is a trend toward downplaying the role of software that is installed on the desktop, relying more on Internet-based applications. This trend is called Software as a Service (SaaS). Cloud computing is also gaining traction. Sometimes referred to as “utility computing,” cloud computing uses a cluster of multiple computers networked together, often based on open standards. Cloud networks can consist of hundreds or even thousands of computers. Both Google and IBM are boosters of this technology, and Google’s entire search infrastructure is based on the use of tens of thousands of small, inexpensive servers clustered together in its data centers as “clouds.” Over the long term, the result of these efforts will be a wide variety of software that is accessed only via the Internet instead of the desktop. PCs, PDAs and notebooks may evolve into radically different systems that are better suited to serve the needs of users via SaaS. The sharing of data will continue to simplify in nature, thus introducing new systems and business models that will emerge in step with the spread of broadband access.
8) WiMAX Extends Wireless Range Far Beyond Wi-Fi - A newer standard known as Worldwide Interoperability for Microwave Access, or WiMAX (802.16), is adding considerable fuel to the wireless fire. WiMAX has the capability to deliver extremely fast Internet connections to wireless devices, such as notebooks and mobile VOIP telephones. Due to its long range, WiMAX has tremendous potential as an alternative to traditional cellular telephone service. WiMAX also makes sense for delivery of intelligent transportation systems (ITS) to cars and trucks as they travel down the highway if mobile WiMAX can be perfected. ITS has the potential to provide a wide range of communications and services to motorists, such as alerting drivers to traffic congestion, accidents, construction and other obstacles ahead and enabling drivers to find restaurants, hotels, rest areas, filling stations and other possible stops. However, the fact that hackers could sit as far as 30 miles away from a target is a looming problem. Also, there is the issue of licensing. While Wi-Fi uses unlicensed radio spectrum, WiMAX uses licensed spectrum. The costs and regulatory issues involved in setting up WiMAX systems will be a barrier to entry, requiring more sophisticated startup efforts than Wi-Fi.
9) MIMO (802.11n) Enhances WiMAX, the High-Speed Wireless Wave - The latest leap in wireless technology is 802.11n (Multiple Input Multiple Output antenna technology—also known as “MIMO”), which boasts better operating distances than current Wi-Fi networks. It has the potential to provide theoretical data transfer speeds as high as 500 Mbps (although hardware manufacturers say that practical speeds will likely average around 150 Mbps). MIMO uses spectrum more efficiently without any loss of reliability. In June 2008, big news rocked the wireless world when the WiMAX Forum announced official certification for several products using MIMO in the 2.5 GHz band. This band is important for numerous reasons, including the fact that WiMAX network pioneer Clearwire plans to use this spectrum for its nationwide rollout. The WiMAX Forum further estimated that perhaps more than 100 products using WiMAX would be certified by the end of 2008. By 2011, the number could reach 1,000 from manufacturers worldwide.
10) Services Available via Ultra-High-Speed Broadband are Imaginative, Futuristic - As media center PCs proliferate in homes and fiber-to-the-home and other technologies bring ultra-high-speed Internet access within easy reach of millions of households, imaginations are working overtime for digital product developers who want to sell products and services. One service that is already underway is increasingly superior video-on-demand. DVD rental innovator NetFlix, for example, hopes to be the leading firm in renting movies via online delivery. Delivery of high-definition (HD) television programming via broadband is another concept that is easy to imagine catching on, especially as more and more homes purchase giant HD flat-screen TVs for their living rooms. Ultra-high-speed Internet connections will even revolutionize many types of careers over the long-term. Telecommuting for many types of workers is becoming much more common as professionals such as accountants, attorneys, researchers and engineers are finding it much more rewarding to telecommute when they can collaborate with coworkers, make rapid downloads and uploads of high definition drawings and videos and securely store and access critical files in ultra-high-speed and high resolution. Other areas of the business world that are touched by this technology include the ever growing trend in distance learning, as well as the government and public services sectors that become much more accessible from the home or office.
Additional information is available in “Plunkett’s InfoTech Industry Almanac 2009”, as well as on our web site, www.PlunkettResearch.com.
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