|
1)Introduction
to the InfoTech Industry
The worldwide market for InfoTech products and services
was estimated at $2.0 trillion in 2004, according
to IDC (International Data Corporation). Growth in
this sector picked up, as the global economy rebounded
from the recession of the early 2000s. Software alone
was generally estimated to be a $200-billion global
market in 2004. Hardware and peripherals were about
an $800-billion global market, while computer services
were worth about $1 billion. Worldwide sales of chips
grew to about $218 billion in 2004, up from $177 billion
in 2003, according to analysts at Gartner. In the
U.S. alone, spending on InfoTech products and services
for 2004 added up to $484 billion, showing very healthy
growth.
Early indications are that 2005 will see reasonable
growth in revenues in the technology sector. Meanwhile,
growth in sales of personal computers is robust, both
in the U.S. and abroad. Likewise, sales are strong
for such items as Wi-Fi-enabled laptops and PDAs (personal
digital assistants). The global semiconductor industry
is enjoying healthy growth in the number of units
sold. In the U.S., sales of computers and software
to government and health care sectors are particularly
strong.
While the 1970s and 1980s will be remembered as the
“Information Age,” and the 1990s will
undoubtedly be singled out in history as the beginning
of the “Internet Age,” the first decades
of the 21st Century may become the “Broadband
Age” or, even better said, the “Convergence
Age.” The advent of the networked computer was
truly revolutionary in terms of information processing,
data sharing and data storage. In the ‘90s,
the Internet was even more revolutionary in terms
of communications and furthering the progress of data
sharing, from the personal level to the global enterprise
level.
Today, broadband sources such as Fiber to the Premises,
Wi-Fi and cable modems provide very high-speed access
to information and media, creating an “always-on”
environment. The result is a widespread convergence
of entertainment, telephony and computerized information:
data, voice and video, delivered to a rapidly evolving
array of Internet appliances, PDAs, wireless devices
(including cellular telephones) and desktop computers.
This will fuel the next era of growth. Broadband access
has been installed in enough U.S. households (34 million
as 2005 began) to create a true mass market, fueling
consumer demand for new Internet-delivered services,
information and entertainment.
The promise of the Convergence Age—the delivery
of an entire universe of information and entertainment
to PCs and mobile devices, on-demand with the click
of a mouse—is much closer than it was a mere
24 months ago. Consumers are swarming to new and enhanced
products and services, such as the iPod, which sold
4.5 million units in the last quarter of 2004 alone,
and the iTunes music download store.
Over the next five years, significant groundbreaking
products will be introduced in areas such as storage,
artificial intelligence, optical switches and networking
technologies. (See “The Future” at the
end of this chapter.)
The InfoTech Revolution continues in the office as
well as in the home. The U.S. workforce totals about
140 million people. Microsoft recently estimated that
there are 40 million “knowledge workers”
in the U.S. At least 63% of the entire U.S. workforce
(or 86 million people) uses a computer of some type
on the job daily, in every conceivable application—from
receptionists answering computerized telephone systems
to cashiers ringing up sales at Wal-Mart on registers
that are tied into vast computerized databases. This
is the InfoTech Revolution at work, moving voice,
video and data through the air and over phone lines,
driving productivity ahead at rates that we do not
yet know how to calculate. Our ability to utilize
technology effectively is finally catching up to our
ability to create the technologies themselves. We’re
finding more and more uses for computers with increased
processing speed, increased memory capacity, interfaces
that are friendly and easy-to-use and software created
to speed up virtually every task known to man. Cheaper,
faster chips and more powerful software will continue
to enter the market at blinding speed.
How far does this revolution delve into everyday life?
Consider how InfoTech affects you on a trip to your
favorite retail store. Retail productivity has benefited
tremendously since 1995 from the construction (or
remodeling) of new, more efficient stores with the
latest computerized checkout and inventory control
equipment. Today, you’ll find at least the basics
in computer systems in even the smallest U.S. stores.
Virtually all chain retailers are utilizing “point-of-sale”
computer systems, in which bar code scanners immediately
capture sales information at the cash register, adjust
the inventory in the computer and reorder merchandise
automatically. The more advanced point-of-sale systems
prompt cashiers with suggestions of additional merchandise
that might go well with the items being purchased.
This technology has helped companies like Wal-Mart
and Nordstrom to become giants in their segments.
Retailers that could not match this level of productivity
have been largely forced out of business, since newly
equipped stores show 1.4 times the average productivity
growth of the general merchandise category as a whole.
Retailers are, in many cases, better off closing old
stores and building from the ground up than attempting
to renovate. Now, RFID (radio frequency ID tagging,
a method of digitally identifying and tracking each
individual item of merchandise) promises to revolutionize
retail logistics and drive InfoTech industry revenues
even higher.
The health care industry is undergoing a technology
revolution of its own, as patient records go digital
in standardized formats, and RFID starts to make hospital
inventories more manageable.
For businesses, the stark realities of global competition
are fueling investments in InfoTech. Demands from
customers for better service, lower prices, higher
quality and more depth of inventory are mercilessly
pushing companies to achieve efficient re-stocking,
higher productivity and faster, more thorough management
information. These demands will continue to intensify,
partly because of globalization.
The solutions are arising from InfoTech channels:
vast computer networks that speed information around
the globe; e-mail, instant messaging, collaboration
software and improved long-distance telecommunications
for real-time communication between branches, customers
and headquarters; software with the power to call
up answers to complex questions by delving deep into
databases; satellites that are beginning to clutter
the skies; and clear fiber-optic cables that carry
tens of thousands of streams of data across minuscule
beams of light. Businesses are paving the paths to
their futures with dollars invested in InfoTech because:
1) substantial productivity gains are possible; 2)
the relative cost of the technology itself has plummeted
while its power has multiplied; and 3) competitive
pressures leave them no choice.
Hot Fields within the InfoTech
Sector Include:
- Supercomputers—advances in
technology have created sizzling new computer systems
for research.
- Electronic games—hardware,
software and interactive online game playing.
- Advertising on the Internet, including
paid search engine placement—Google, Yahoo!
and other leading search sites have evolved into
online advertising powerhouses.
- Home networks coupled with media center PCs.
- VoIP—one of the fastest-growing
uses of the Internet is for voice-over-IP telephone
calls. This is leading to excellent hardware sales
for companies like Cisco. The traditional telephone
companies are investing in VoIP at a rapid rate.
In nations outside of the U.S. where long-distance
rates are high, VoIP already carries a significant
market share. Watch for cell phones and VoIP to
converge, as new telephones are introduced that
connect wirelessly to VoIP systems when the user
is in the office and then switch to pure cell phone
access on the road.
- Computer security—e-mail spam
filters and other e-mail management tools, firewalls,
virus deterrents and advanced security software
and hardware. Also, semiconductor manufacturers
are incorporating serious security features in their
chips’ design.
- Advanced data storage—storage
area networks (SANs), RAID disk drive arrays, backup
software and hardware.
- Voice recognition—advanced
software to enable a user to “speak”
to a computer as a form of data entry. This technology
will become particularly useful in obtaining data
or placing e-commerce orders via cell phones.
- Wi-Fi and wireless devices—Palm-type devices,
cell phones and wireless LANs, all sending and receiving
data from other pieces of hardware or the Internet.
- RFID—radio frequency ID tags
will soon revolutionize tracking inventories and
shipments of all types.
- Smaller, more energy-efficient chips—many
new laptops are exceptionally convenient, with easily
manageable weights in the two- to three-pound range
and batteries that can last for three to five hours.
- Open operating systems—Linux,
et al are booming because they are reliable, inexpensive,
versatile and continuously improving.
- Fiber to the Premises (FTTP)—fiber-optic
cable installed all the way through to the living
room is becoming standard in new housing communities.
- Mass Market Broadband—more
than 34 million U.S. homes now have broadband. Eventually,
ubiquitous broadband access combined with very sophisticated
connectivity devices will usher in an extremely
advanced era of integrated media and information
of all types: the Convergence Age. The price of
bandwidth will remain a tremendous bargain.
- Distributed computing—the
creation of large networks of desktop computers
via peer-to-peer systems. The power of such systems
has been dramatized by the SETI@home project. Growing
broadband and connectability advancements mean that
hundreds or even thousands of desktop PCs can be
networked together to use their idle processing
power to create major processing ability for large
projects.
- Grid computing—clusters of
powerful computers are being linked to create supercomputer-like
capabilities.
- Web services, including Microsoft’s
.NET—a code called XML combined with advanced
software tools is revolutionizing the way users
are able to call up, view and analyze data of all
types.
- Video-conferencing and online collaboration—businesses
use online methods to cut down on the expense of
travel and attendance at conferences. Methods for
conducting virtual meetings are rapidly being adopted
by larger corporations.
- Supply chain management—software and databases
that enable executives in purchasing, manufacturing
and distribution to better manage their vital flow
of products and components.
- Flash memory—along with smaller, high-capacity
hard drives. Flash memory device sales totaled about
50 million in 2004, 25 times the total of 2001.
- Health care records technologies—Gartner (a
major research firm) projects health care industry
spending on IT to rise from $34 billion in 2001
to nearly $48 billion in 2006—the second-fastest
area for IT growth after the U.S. Government.
|
