BUSINESS
Year in Review 2008: Top tech trends (part one)
30-12-2008
by Sylvia Leatham
Our top trends for 2008 are a mixed bag of good news tempered by some very bad news.
Recession recession recession
The overarching trend that 2008 will be remembered for is economic recession. Earlier on in the year, companies were euphemistically 'adjusting strategies' in the face of 'macroeconomic headwinds', but by year's end almost everyone had succumbed to using the 'R' word as the realisation set in that the downturn wasn't going away. While the IT sector was cited early on as one of the more robust markets, nearly every tech market segment felt at least some pain during the year, as the banking crises widened, oil prices rocketed and consumer spending faltered, sending the world economy into a tailspin. Tech giants like Dell, Sony, Yahoo, Canon, Sun Microsystems, eBay, Oracle, AT&T, Fujitsu and Toshiba were among those feeling the pinch, with many cutting profits, forecasts and/or jobs. German software giant SAP threw in the towel on making forecasts altogether due to market uncertainty, while chip behemoth Intel shocked the market in November with a revenue warning. Indeed, the bellwether chip sector felt the reverberations as key industries tremored, with PC market-watchers forecasting slower growth until 2010 and the mobile phone sector registering a downturn in shipment volumes for the first year since 2001. Meanwhile, consumer electronics also took a hit, as the spending slowdown bit right into Christmas, traditionally the busiest time of the year for electronics retailers.
Here at home, Ireland won the ignominious accolade of being the first country in the eurozone to succumb to recession, when September figures showed that GDP had declined for two consecutive quarters. In spite of pockets of job creation in the tech sector and Government investment in research and development throughout 2008, by year's end there was one tech company's name on everyone's lips, as the cost-saving jobs axe hovered ominously over our heads: Dell. For months workers at the Raheen plant in Limerick have been waiting to hear if Dell's restructuring plans will include a move to close its Irish manufacturing arm, which is staffed by around 2,000 people. And of perhaps greater concern is the effect any closure might have on the wider economy, as between 10,000 and 15,000 jobs are thought to rely indirectly on the PC maker's presence in Ireland. (For more on Dell, see our 'losers' list elsewhere on ENN.ie.)
Who let the data out?
It seems that 2008 was the year that data loss came into its own, as incident after incident revealed carelessness, misfortune and neglect, often in the unlikeliest of places. Early on in the year, the records of over 171,000 Irish blood donors were compromised following the theft of a laptop from an official in New York. Then in April it emerged that Bank of Ireland had been subject to the theft of four laptops, containing details of tens of thousands of customers -- an incident compounded by the bank's failure to report the theft to the Data Protection Commissioner until at least six months after the event. Bank of Ireland made headlines again late in the year, due to the loss of a memory stick with information pertaining to 900 customers. The DPC itself suffered mild embarrassment in May as erstwhile blogger Damien Mulley, in what one presumes was an effort to prove a point, managed to leak the contents of its annual report by tinkering around with the DPC's website.
But the star player in data loss this year had to be the Government, which lost portable devices at an alarming rate. Statistics released in October showed that 19 laptops, three desktops, nine Blackberrys, four portable storage devices (and probably a partridge in a pear tree) had been lost across government departments in 2008. And, as security experts everywhere tut-tutted, such incidents went from bad to worse as, almost inevitably, it emerged that the data in question had not been encrypted to protect it from falling into the wrong hands. To paraphrase Wilde, to lose one laptop may be regarded as a misfortune, but to lose thousands of people's personal details looks like carelessness.
Netbooks: the crossover hit
As the PC market slipped into the economic mire in the second half of the year, one bright star ascended from the gloom: the netbook. Like the little engine that could, the netbook -- sometimes called an ultra-mobile portable device or mini-laptop -- was an unlikely achiever; but its phenomenal rise has been reminiscent of the early days of text messaging, when no one but teenagers were expected to make use of this after-thought feature. Netbooks were originally created for the 'emerging markets' of regions like Africa, Latin America, and Central and Eastern Europe, with a lightweight design, budget price tag, and no-frills functionality. But this was the year that PC and laptop users from all over the world and from all market segments fell in love with the go-anywhere convenience and nice price of the netbook, catapulting the device into a prime driver of the PC market.
This year, the netbook market is expected to reach a whopping 14 million-plus units, according to a study by research firm DisplaySearch, which notes that the market stood at less than 1 million shipments last year. This forecast vastly improves upon an August prediction by Taiwan-based Market Intelligence Centre, which predicted the market for mini-laptops would reach 8 million units in 2008. In a sign that the trend is here to stay, all of the major PC makers hitched their wagons to the netbook train this year, with Dell, Hewlett-Packard and Lenovo all rushing to bringing products to market. Little-known Taiwanese PC maker Asus, the company credited with kicking off the netbook trend with the launch of the Eee PC last year, is still miles ahead of its larger rivals, however, with a 30 percent market share, according to the DisplaySearch survey, while Acer now controls 38 percent of the market. The ascendance of the netbook is in sharp contrast with the shrinkage of the wider PC market, which is expected to grow a paltry 3.8 percent next year, according to IDC, which in December pruned its 2009 forecast back from an earlier prediction of 13.7 percent growth.
We're cloudbusting
Another hot trend that came to prominence in 2008, and that's set for even more attention in 2009, is cloud computing. One step beyond Software as a Service (SaaS), cloud computing enables companies to harness the massive computing power of the data centres belonging to the likes of IBM, Microsoft and Google -- at a fraction of the cost and with minimum hassle. The appeal of the cloud for end-users is its on-demand model, allowing smaller firms to access IT applications hosted on the internet as and when needed, as a kind of pay-as-you-go utility. In October, research giant Gartner named the cloud as one of its top ten tech picks for 2009, saying it would allow companies to grow rapidly because IT functions can be delivered 'as a service' over the net. Indeed, Microsoft implicitly acknowledged the shift away from the desktop and into the cloud with the October launch of Windows Azure, a collection of hosted services that will run inside its network of data centres, offering online versions of software such as its SQL Server database.
But not everyone is yet convinced by the cloud, it seems. A November survey of Irish firms by virtualisation provider Citrix revealed that opinion was divided: 46 percent of IT decision-makers said they had no plans to start using cloud computing, but 44 percent are either currently doing so or hope to next year. Interestingly, 82 percent of those questioned believe there are some risks associated with cloud computing, with anxieties around security, bandwidth, IT governance, and loss of data control. Still, the cloud seems to be the way forward, and earlier on in the year tech giant IBM announced that it would set up Europe's first cloud computing research centre in Dublin, at its Innovation Campus in Mulhuddart.
Look out for part two of our top tech trends Year in Review feature, and keep an eye out for our 'winners' and 'losers' features elsewhere on the site.
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