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2009: The Year Of...

More services beyond utilitarian ones will move to the web. Thin clients will grow in the SMB and they are predicted to significantly increase their IT spending in 2009. Both Apple and Cisco are expected to enjoy more profitability from video- and audio presence.

I started 2008 off with Resolutions or In Search of Solutions and stated we would be paying the piper for past financial sins. In light of the ongoing financial storm we all hope to weather; it's with this in mind that again I focus on the status of the economy, money and trends.As Americans' household net worth plummeted, losing an estimated $7 trillion in equity during the past year, you can take notice that money will continue to be tight. Unemployment will likely reach 8% and it may push higher in 2010. Americans reduced their debt in the 3Q of 2008. Turning off the unlimited supply of credit cards, buy now/pay later schemes with zero interest, and tightened lines of credit including home-equity reduction loans (meaning get the loan and reduce the equity in your home) has reached the tipping point. Perhaps the recent downfall of the consumer frenzy to own homes with zero percent loans will teach a simple lesson: you don't buy what you can't afford to pay for and hope to leverage future prices of what you bought so you can buy something else and end up with equity in the gamble. In the old days, they called that getting something for nothing.

According to David Walker, former Comptroller General of the U.S. (1998-2008), the national $53 trillion black hole averages $455,000 per household and it's going to get worse. Government and unrepentant hucksters readily spend other people's money and factor in the recent bailouts, Bernard Madoff's thievery along with the trillions of dollars required to fix the U.S. infrastructure. Consider what Madoff and others in recent history have pulled and who has borne the cost, then you'd also expect public outcry. Instead, it's akin to beating a dead horse: it's true, he won't complain.

Globally, factories are shutting down and corporations are peeling back shedding jobs with even some C-level executives voluntarily forgoing annual bonuses. While Office Depot, Starbucks and others shut down stores, more retail houses may find sustainability on the web. How well they virtualize the customer experience will determine their profitability. Anyone looking for a lead in how to be environmentally correct and profitable can look to Wal-Mart and IBM. Granted, not everything can be virtualized, including a good cup of coffee. The experience factor may not be enough to win sales and sell more widgets unless engineers and marketing folks can get together and put the customer at the center of the "experience." Even then, wowing them won't necessarily sell more, but gluing them to other people in a "human"-like way to conserve fuel and reduce travel time will increase chances of success.

The carriers are tightening up and this is bad news for Alcatel-Lucent, Ericsson, Juniper Networks and Tellabs. I'm not mentioning Nortel because their story isn't over yet and don't be surprised to see more falls from grace by the last quarter of 2009. ADTRAN seems to know something the rest of us seem to be ignoring, and that is the hosted space. Hosted or managed services will quietly ring the New Year in and I don't think they will end with a bust. This isn't to say challenges aren't ahead for them because they are. Funding for hosted solutions can vanish just as quickly as it does for any venture or any carrier as it did for Hawaiian Telecom. The judge handling the bankruptcy cleared them to spend $75M to continue operations. Telecom debt isn't without risk either and in the coming months we will witness others lining up vying for bailout dollars from whomever will listen.

Trends to be mindful of for the year ending 2008? Apple Safari browsers now account for 7% and Apple holds a 6.6% share of the U.S. PC market that is expected to double by 2011. More services beyond utilitarian ones will move to the web. Thin clients will grow in the SMB and they are predicted to significantly increase their IT spending in 2009. Both Apple and Cisco are expected to enjoy more profitability from video- and audio presence. Having a choice of phone (wired or wireless) at least across the pond is quickly becoming adopted as a means of practicality. While we are enjoying the momentary decline of oil prices at the pump, the politicians will be fighting over the prices at the meter. Revenues based on fuel (oil) consumption are negatively impacted and the segmented shifts away from oil to electric and alternative energy won't go unnoticed. The demand for electricity won't falter either - electric powered vehicles are here and they will begin to populate the ranks. Social networking hasn't fully evolved on "social" potential, but when it does, watch out. Businesses flock to use the tool as leverage to boost sales but when social networks turn the other cheek as a force against them or governments, it will be interesting to see the impact.

I also mentioned in the past to leverage mobile and WiFi phones because not everyone needs a desk phone. Apple hopes that consumers unable to afford computers can and will afford iPhones at WalMart. The banks wish that the charge-offs of bad credit card debt would go away but know it will increase in 2009 and continue on in 2010 at record levels. Metal prices have plummeted but not scrap prices - they are still attracting thieves who will steal any amount of copper, aluminum and other metals, and this does have the FBI concerned.

You may agree that adopted solutions must be cost effective and relative and the pressure is greater than last year to perform and deliver measurable results. Look to your customers: know them and what their needs are. In any sense of the meaning "customer service," these two words will carry significantly more weight in 2009. In every area of the global economy, cutting back isn't just in vogue, it's reality. Strengthening the network or infrastructure doesn't mean going into hock to buy the best--to house a Cadillac in every garage. The glut or inability (or unwillingness) to analyze other products and services that do the same things less expensively and more simplistically will come under more scrutiny as will the loss of senses about how to effectively run businesses, governments or networks. You see, someone has to pay and this is an account being called in for reconciliation from being long past (see Pay the Piper).

Everyone is going to feel the wave of compounding interest. Maybe it's fate but I think the Chinese calendar hit it right on the mark when they told us that 2008 would be the year of the rat. Better wishes to you and yours in 2009.More services beyond utilitarian ones will move to the web. Thin clients will grow in the SMB and they are predicted to significantly increase their IT spending in 2009. Both Apple and Cisco are expected to enjoy more profitability from video- and audio presence.