Just a year ago, for the first time, I established my own 10 predictions for 2009. Before doing the same exercise this year, I decided to go back and review how they had pan out. I leave you as the ultimate judge, but feel I did not do too badly. The challenge now is to do at least as well this year.
I have participated in several conferences where the uptake of the economy was discussed. Whether it is already there, or will appear during 2010 is still open, however 2010 should be a better year than the previous one. Not difficult you will argue. So, with that in mind, let me propose my predictions. As last year, I have five that are business related and another five technology. Let's start with the business ones:
- As the economy takes up, many companies will have difficulty to manage their supply chains. Indeed, in reducing costs to a minimum, many have reduced safety buffers, making them more dependent of suppliers. I am not sure they already recognize that, but as demand picks up, the ecosystem will be stress tested. In particular, because the variability will remain in the system as long as there are uncertainties left. As the US and Asia pick up faster than Europe, imbalances will appear in the supply chains, making their management challenging.
- Towards the end of 2009, we have seen a number of mergers and acquisitions. That trend will continue as some companies are still sitting on large piles of cash, and as the stock market is still reasonably cheap. Companies will continue taking advantage of the situation to complement their portfolio and improve their competitive advantage. The high tech industry, in particular, should be subject to further consolidation as the go-to market mechanisms change.
- Recovery will be slow with growth rates under the 3%, resulting in further cost cutting throughout the year. Redundancies will continue at least through the summer as companies try to get their costs in line with Wallstreet expectations.
- Outsourcing will continue, but the list of target countries will increase. Environmental and logistics cost considerations should favour countries closer to the EU and the US, while the increase in costs in China and India make other countries more competitive. The concept of "right sourcing" is becoming increasingly popular.
- Despite the failure of the Copenhagen conference, the environmental efforts are there to stay. There are at least three reasons for this, first reducing energy consumption reduces cost, second, moving to greener energy reduces dependency from oil, and third, an increasing amount of countries realize that pushing for cleaner technologies foster innovation and the creation of new business opportunities.
Let me now focus on the technology related trends.
- To improve operations of their leaner supply chains, companies will increase collaboration with their suppliers and customers alike. Using unified communication and collaboration, business exchange services or community clouds, they will build closer links with the partners in their ecosystems, linking them in an integrated community. This could be one of the first enterprise applications of cloud technology.
- Although the Cloud is there to stay, the hype will diminish as issues become more visible. A major security breach is likely in 2010 as hackers turn their attention to this new technology. The official start of Microsoft Azure will be a bright spot. Seeing how the platform differs from Amazon and Google will indicate where cloud computing is going as this is the first platform solely architected for cloud.
- Enterprises are increasingly intrigued by the concept of cloud, but where SMB is moving to the public cloud, enterprises will migrate to private clouds, which can be on-premise or located in service providers datacenters. The concepts of utility computing and private cloud should merge over the year. The more advanced may "spill over" in the public cloud to source peak capacity needs, hence create what is getting known as "hybrid cloud".
- Manufacturing Execution Systems are back on the picture, and their integration with ERP is on the agenda. As companies continue streamlining their operations, the integration of the factory and the supply chain becomes mandatory. A new term, Manufacturing Operations Management, will start appearing in 2010 and take an increasing importance as companies increasingly look at their operations in a holistic manner.
- Last but not least, business intelligence will continue to be on the agenda of IT departments, but it will increasingly be focused around addressing specific business problems, and may as such take many names. Supply Chain Visibility, Product Track & Trace, Warranty/Quality Management and internet monitoring are some of the names that will be used. Increasingly information will come from outside the companies boundaries, being it suppliers, customers or the net itself. In that process, social networking will move up on the radar screen of companies with a strong brand.
I do not have a crystal ball unfortunately, so my predictions are worth what they are. They are mine, and do in no way reflect HP's ideas. Tell me what you think, do you agree with me, or do you see others?
On a different note, let me wish you a Merry Christmas and Happy New Year as 2009 is winding down. May 2010 bring you a lot of satisfaction, and I do hope to count you as a reader next year again.
Earlier this week I was at RFID World in Las Vegas. Even though it is not the main RFID trade-show in the US it was interesting for a number of reasons.
Tag vendors appear to have recovered from the price reductions of the last few years and seem to focus high quality/yields and high volume (very high volume) opportunities.
RFID readers form factors are exploding clearly and I was able to see north of 30 types of readers/antennas combinations made specifically for a particular situation/use case. This includes SDIO/CF, small PocketPC based devices, creative use case based antennas and cool looking form factors from Samsung (yes they do have UHF readers) and several others I can’t even describe.
This is all goodness for the industry which now has to provide answers to a larger number of requests and opportunities in what was before considered fringes or niche areas, not big enough to justify hardware investments.
This new wave of hardware push is going to enable software vendors and system integrators’ to provide solutions in more areas and continue the acceleration of the adoption of RFID.
Do you have in mind a reader form factor that does not exist yet?
In one of my previous posts, I referred to the WWF report "The potential global CO2 reductions from ICT use". Last week I had the opportunity to talk to one of my colleagues who collaborated with the WWF in this report, and we started a very interesting discussion on the use of IT to reduce companies' effect on the environment.
IT consumes 2% of the world energy, and although it is important to reduce that one, there are the other 98% and according to the report, 37% comes directly or indirectly from the industry. Our topic of discussion turned around how we could use IT to help reduce this amount. There are three clear areas that we came up with, first, the manufacturing process itself, second transportation and third the use and recycling of the product.
I remembered a conversation a couple years ago where somebody told me a CPU chip would go two or three times around the world prior to being delivered as part of a computer at your doorstep. Frankly, is that really needed? Could we use simulation software to optimize the manufacturing process, ensuring that, while maintaining the lowest possible cost, we can reduce the CO2 emissions.
Many of our factories are automated today, and they use MES (Manufacturing Execution Systems) to understand and optimize their operations. But those systems do not take environmental concerns into account as they exist today. This is another area we should work on.
As part of research for a greener IT, HPLabs has focused on effective cooling methods for computers and racks. In doing so, they managed to reduce the energy usage by up to 40%. Now, many manufacturing processes require to be cooled. Could some of the approaches developed by HPLabs being used for those processes? Although there is no clear answer today, it's worth asking the question and looking at potential opportunities for piloting. Now, you may argue this has little to do with IT directly, and you are right. However, if it helps, that's the most important isn't it.
At HP we are using a design for the environment (DFE) approach in product development, identifying the actual implications of the product under development to the environment. Simulations during the process allow us to anticipate future consumption and other key data items. Here again, IT can help understand what is required to develop a loc carbon product.
I realize I have only scratched the surface here, but am looking at your inputs and ideas. This subject will be core and center in conversations between manufacturers in the near future, so let's prepare ourselves.