2008 Predictions for carriers

Every now and then, several trends combine at the same time to totally reshape an industry. Indications are that this is happening in 2008: When the dust finally settles (which may not be for a while), the telecom market will be very different.

Here’s how:

–1. Bandwidth appetite skyrockets.

As I’ve noted in previous columns, I’m expecting an exponential increase in appetite for bandwidth — consumer as well as enterprise — over the next five years. But it’s starting already, particularly in the enterprise. Organizations I’ve spoken with recently anticipate triple-digit bandwidth growth for the next year. And it’s often at the edges of the network (branch offices continue to grow at a rate of 10% year over year). That means telecom managers should investigate alternative carriers, WAN optimization gear and branch office products to keep costs down.

2.– Unified communications takes off.

Unless you’ve been living under your desk in 2007, you’ve heard about voice, video, e-mail, instant messaging and presence merging to provide multimode real-time collaboration. I’m seeing these systems move out of the planning stages in 2008. Watch how this affects the growth of companies and product portfolios such as Microsoft OCS, IBM Lotus, and the traditional VoIP players (Nortel, Avaya, Siemens, ShoreTel, Mitel). Not everybody will succeed here — but some will. — Hosting and outsourcing goes mainstream. Virtually all of my enterprise clients are outsourcing something: data centers, VoIP systems, router management, firewalls. And we’re going to see that trend accelerate in 2008. Companies such as Equinix that capitalize on these trends are having a booming year — expect it to continue.

3.– Video ratchets up.

As predicted last year, telepresence has started to pick up steam. But room-to-room video is just the tip of the iceberg. Streaming video continues to grow: AT&T reports that more than half of iPhone users have watched YouTube videos on their phones in 2007 (see next trend). And look for interactive person-to-person video to gain momentum, as well. The big winners? Makers of video gear, but also some unexpected players: The storage folks. Creating, storing, indexing and accessing all that data requires tremendous amounts of storage. IDC recently released a report indicating that storage requirements would outpace storage media within the next few years. Video is a key reason why.

4.– Wireless data explodes.

The folks at Ericsson are predicting nearly 4 billion wireless subscribers worldwide, mostly broadband, by the end of 2008. Interestingly, broadband wireless isn’t just for mobility — it’s also providing alternatives to wired connectivity (including backup for remote sites). And users are increasingly deploying high-bandwidth applications — particularly TV and video — over wireless. Finally, it’s worth remembering Google’s plans to bid for the 700Mhz spectrum in ’08. The impact overall of these trends is to launch a wholesale reshaping of the telecom industry. Telecom managers, take note: It will be particularly important to stay on top of technology trends for the next few years. Fortunately, if you’re reading this, you’ve come to the right place!

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Jim Love, Chief Content Officer, IT World Canada

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