iPhone & Social Networks:Tech’s Survivors in ’09

2009 Predictions iPhone, Google, Social Networking and Web Video

Trying to forget 2008 even happened?

You’re not alone. Caught in the fallout from turmoil in the banking industry, the tech sector is reeling from dried-up credit, a timid investment community and a steep drop-off in enterprise and consumer spending.

But don’t be too glad to see 2008 go. After all, it had its bright spots.

Yes, really. Social networking made great strides, clogging many an e-mail box with “friend” invitations and broadening its reach beyond the mainstays of Facebook, MySpace and LinkedIn. Apple’s iPhone emerged as the hot device in 2008 while consumers turned to Web video in droves, paving the way for new businesses and new initiatives by existing players. Meanwhile, Google continued doing nothing to disprove the notion that “Resistance is Futile” when it comes to competing against it in online search.

It shouldn’t be surprising, then, that we’re beginning our annual, week-long look at what’s next in technology with predictions that the big stories of 2008 will again be leading the way in 2009…

…although, not necessarily quite in the way that you might expect.

Social Networking Disappears

Got your attention? Well, social networking won’t vanish as a technology, but as a distinct product category, its days are numbered.

It’s all part of the “consumerization of IT” trend that’s seeing popular Web 2.0 features becoming a more integral part of the computing fabric. Chat, blogging, wikis, user profiles, ratings and more have already found a home in many large companies, with many more on the way.

While there are clearly security and resource issues to be worked out, analysts say that companies need to start experimenting, if not implementing social networking features or risk missing out on a new generation of employees that expect it. And it’s not just the young folk: IDC research indicates more than half of U.S. adults aged 35 to 44 use social networking software.

A recent Gartner report confirms the trend, which it predicts will really start to ramp up in the next three years. By 2012, the research firm predicts more than 30 percent of large organizations will have deployments of social software suites available to all their employees.

The first obvious “victim” will likely be traditional e-mail systems. By 2012, Gartner predicts a whopping 95 percent of enterprise workers will use IM as their primary interface for computer-based, real-time communications, and I would expect that transition to make significant headway in the coming year. Even traditional consumer e-mail is changing to add social features with companies like Yahoo rolling out its “smarter inbox” this month.

One thing you can bet will disappear in 2009 are some of the social networking vendors scrambling for a piece of the online pie. Again, looking out to 2012, Gartner expects more than 60 percent of the current social software vendors will exit the market through acquisition or failure.

But I expect several high profile exits as soon as 2009 as established software players adopt many of the key features more niche players are pitching as separate offerings. And many, this author included, are suffering from community overload. You can only join so many networks without the constant add a friend invitations become a serious annoyance.

iPhone Goes High and Low

Apple has been very disciplined in its less-is-more approach to bringing out new models of what’s become the must-have mobile device of the year. Essentially, there is only one iPhone, with a choice of storage configurations.

But I’m betting Apple is going to have to branch out in 2009. The rumors of a $99 iPhone for Wal-mart seem pretty far-fetched. Apple doesn’t do cheap anything, so I just don’t see that happening. That said, I do think the current model will morph into a lower cost, more mainstream-priced model. Meanwhile, now that the rest of the smartphone industry seems to have caught up with most of the iPhone’s game-changing features – touch screen, easy Web access, etc. — Apple will come up with something even “cooler” at the high end with a new model.

An improved virtual keyboard, or better alternative, would be a good start.

Page 2: Enterprise search finds itself; and will Hulu dance around YouTube?

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Enterprise search finds itself

To the general public search equals Google and its ubiquitous, maddeningly simple search entry bar. But enterprise search is about a lot more than finding a bunch of blue links based on popularity and similar criteria. Enterprise users are looking for very specific internal documents, such as billing information, personnel and customer files and product info. So it’s a lot less about the quantity than the quality of results.

I expect significant innovation in the enterprise search space in 2009 as these companies, including Google, find better ways to present users with the information they truly are after. Microsoft shook up enterprise search at the start of 2008 with its $1.2 billion purchase of FAST (Fast Search and Transfer) and has had a year to figure out its next moves (which it probably needed given the distraction of the on again-off again Yahoo acquisition talks. Look for FAST to have a much bigger profile in 2009.

Other players, like Autonomy, are at the cutting edge of finding results for all kinds of media types – images, video, voice, etc.

Google is making headway with its own enterprise search products, but it would seem to have little chance to dominate as it does the consumer space. “Enterprise search is not a homogeneous market segment,” said Eric Rogge, senior director of product management at enterprise search vendor Exalead. “It’s more like the Balkan states; there are lots of different niches where specific competencies are most important.”

For example, one area Exalead focuses on is the logistics market. Rogge cites the example of a car company that hears about a freight stoppage. “We can help you find out in real time what cars were on that train. We’re offering information retrieval coupled with business intelligence.”

Another example, still in development, Rogge said e-mail could be searched to help analyze sales trends. “You see there’s a drop in sales and it might be helpful to analyze e-mail threads to see which deals went well or not.”

Will Hulu dance around YouTube?

Here’s an easy prediction to make, because it’s become a mainstay of Internet forecasts the past several years: Video on the Web will explode. But several industry insiders have made more specific guesses on what’s to come in online video.

Benjamin Wayne, CEO of online video provider Fliqz, predicts “the death of the online video ad model” in 2009.

Wow, video ads, we hardly knew ye!

Wayne claims video advertising on the Web is a “broken model” that is due to be done in by inventory shortages and what he says is the “prohibitively high cost” of creating effective ads.

Instead, Wayne predicts a shift to subscription-based models, as well as more businesses creating and marketing their own branded videos.

I fully expect the online ad model to evolve, but I don’t expect it to go away anytime soon; Google’s got a lot more tinkering left to do with YouTube to get it right as a thriving platform for advertisers. A big challenge is making sure blue chip advertisers don’t get anywhere near some funky user-generated video like cats swimming in tapioca, though the Jello folks might like that.

Another provocative prediction is from Spock.com co-founder Jay Bhatti, who thinks in the next 18 months Hulu.com will come to dominate Web video at the expense of YouTube. Bhatti claims “advertisers hate user-generated content (just ask Facebook and their challenges making money) and trust the content on Hulu will be of high quality and will make their brand appear to the user.”

He also notes Hulu is already off to the race, projected to generate $70 million in revenue this year — versus $100 million for the more established YouTube, and may well eclipse YouTube’s revenue in 2009.

Hulu has very good buzz. I’ve not only read this, but anecdotally, I can report many people I know have recommended it. But my personal experience has been disappointing. I used Hulu to watch some network shows I missed, which was useful, but found watching a full-length show on my computer, like Heroes (43 minutes), less than satisfying. There’s plenty of room for Hulu to be successful, but I’m betting services like YouTube and others that cater to short-form videos will also thrive.

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