Wednesday, March 07, 2007

A Ring with many Corners?

The current jostling for position in the mega-tech world of Google, Microsoft, etc. is beginning to look a lot like a boxing ring but with more than four corners. The convergence of the internet, communications, entertainment, media, personal space and more will see some interesting face offs and alliances in the future. Increasingly it is no longer a hardware race but one of competing ideas, knowledge, know how and initiative.

Proof of this is Apple Computer Inc. dropping the "Computer" from its corporate name this past January.

Increasingly the profit margins on hardware wil shrink (even on iPods!) while new sources of revenue will take over. Companies like Dell will become the dinosaurs, providing cheap computers and peripherals. Companies like Google will challenge the likes of Microsoft with web based office software. The music industry will eventually cave in on digital rights management (DRM) and see their turnover and sales grow again. Personal space on the internet will continue to explode, first blogging, then photo-sharing, now videos, what next?

Those companies that can predict the "what next?" will be those who can innovate and not stay stuck in the ruts of yesterday's glory days. Here are my predictions:

Google will continue to be the pathfinder but will find life increasingly difficult now that it has become part of the establishment. Expect competitors and governments to file law suits at regular intervals!

Apple has demonstrated it has a pipeline of symbiotic products and services and the ability to negotiate those all important alliances. It's biggest challenge is to dispose of DRM (something Steve Jobs says he wants to happen soon). And keeping the hardware and operating system under one roof doesn't seem to be such a bad idea after all!

Yahoo will benefit simply by being the number two to Google. But it is likely always to remain number 2.

Microsoft has the inertia of ExxonMobil and will not fall too far. But, as pointed out in one of yesterday's posts, Microsoft shareholders cannot be happy with no growth. There's a big difference between not falling and growing.

Dell, HP, Sony and others will have to do something very different in order to maintain position. They are no longer proactive players in the tech world.

The media, in general, is facing up to the changes in the way its content is being distributed. Some media companies will do a lot better than others. Those with vision, but not necessarily television.

Telecommunications will continue to change the way technology is used. The iPhone may be a watershed in this respect but not much more than that. Expect hand held technology to be the next spurt of technological change, such that a 2007 iPhone will likely look decidedly quaint by 2010! As to those multiple button phones - who knows where they will end up!

Media companies who believe their customers are crooks will quietly fade away. DRM is on its way out. Senseless barriers like DVD Regions will disappear eventually. The media companies who made the early alliances (Disney, for example) will likely lead the pack into the new world.

That's my brief look into the crystal ball. I won't be right, of course, but I probably won't be too far wrong either!