Channel Partners

December 22, 2009

11 Min Read
How Will Communications Technology Be Transformed in the Next 10 Years?

“The communications technology will continue to focus on mobility and customization for all end users. Therefore, wireless, in any network will garner attention.”

— Philip Josephson, Founder, the Law Office of Philip Josephson

“Technology in 10 years will be about the integration of video into daily communications. We have the beginning of this today with higher-end telepresence-type solutions. Have you ever seen anyone on Star Trek making a landline telephone call? Video communications coupled with mobility will be the way our children communicate. In addition, I expect improvements in mobile device form-factors facilitated by unrollable/foldable screen technology. This will allow the mobile device to morph into a personal computer at will.”

— Steve Hilton, Enterprise Research, Analysys Mason

“Everything will be CRM-based and in the cloud. Nothing will any longer be manual process. Google wins the game!”

— Vince Bradley, CEO, World Telecom Group

“More services will be offered over broadband/IP connection, which will help in reducing costs and introduce more unified applications like presence detection, IM, video conferencing and cellular integration. All of [these] will drive communication applications. In addition, software as a service will be considered the norm for the masses. (Driven by higher bandwidth speeds delivered over multiple options both wired and wireless.)”

— Dan DiOrio, President, TelcoPro USA Inc.

“That is hard to say, but it is a safe bet it will be IP-based. To me, the bigger question is how will society and businesses get access to communications technology? If companies like Google have their way, communications may become an application with costs driven down based on our willingness to share information about ourselves and our behaviors. I really believe you will see this type of model evolve over the next decade in the consumer and wireless space. Corporate networks, on the other hand, will continue to evolve, but the model in which these services are purchased will continue to be the same.”

— Brad Miehl, President & CEO, MicroCorp Inc.

“Fiber, fiber and fiber. Also, MPLS and other means of converged technology. Starting with fiber, bandwidth and access needs have grown exponentially and will continue to do so. Fiber has been proven to be an amazing ‘future-proof’ medium. The same fiber in place across the ocean and in networks all over the world started at far slower speeds. Suddenly they develop lasers that pulse light faster or utilize different spectrums of light, and speed increases. The fiber never changed … they just pulled the old lasers off and put on the new ones at the ends. Fiber and related equipment/technology will become more of the standard. While fiber itself can handle as much as 14tbps, readily available commercial equipment started at 45mbps and kept increasing to now where the relatively recent 2.5gbps option is being skipped by most carriers and large customers for the newly developed 10gbps that came out so shortly thereafter. With such large capacities available and such new technologies such as 3D HD television at as much as 2.5gbps … we will start to see the old copper and even Ethernet over copper start to disappear as fiber spreads farther out.

Next, we will start to see MPLS with an overlay of voice, video, data and Internet and other converged networks become more of a day-to-day product. I don’t know if low-end and low-cost hosted PBX and ‘bring your own bandwidth’ SIP trunks and the like will ever reach an effective cost-to-quality ratio. It is still immature, but only because it is forced to run over the uncontrolled public Internet. However, the larger multisite customers will start merging their WANs and LANs and their voice and data. The efficiency, control, scalability and features of these new communications technologies will overshadow current network structures and become more of a norm for the typical multisite customer. I already have customers with California offices where the receptionist can access the overhead paging system in their Maryland office with a push of a button on her phone.”

— Zachary Schechter, President, ZCS Enterprises

“Transport technologies and content delivery systems will continue to evolve and people will continue to become increasingly more dependent on their personal communications devices.”

— Benjamin W. Bronston, Partner, Nowalsky, Bronston & Gothard, APLLC

“[There will be] more wireless and less usage-based services. Convergence of both protocol of traffic and the medium it is carried on will be a significant change. Voice products will be carried much like data packets. Copper T1 access will blur to more fiber and wireless. Ethernet will overtake legacy protocols to carry all types of traffic. I envision the Internet/WAN to become more like a power outlet. You plug it in and all applications work. Hosted or ‘cloud-based’ solutions will continue to grow.”

— Geoffrey Shepstone, President, Telecom Brokerage Inc.

“MSPs are coming in and managing wireless phone networks, voice networks, print systems, desktops and servers. They’re only really scratching the surfaces and probably only penetrated about 10 percent of customers who have made this wholesale transition to managed services. Other services companies are looking to outside vendors to provide include hardware deployment and support, network consulting and integration, IT consulting, desktop management, help desk functions, security, network and firewall monitoring, e-mail management and storage/backup.

CompTIA recently surveyed 200 U.S. companies that rely on managed services providers for some of their technology services. The results suggest that mid-size end-user organizations (companies with $10 million to $99.9 million in annual revenue) are more likely than their small or large counterparts to use managed services. For nearly every service listed, current usage is highest among this segment (ranging from 40 percent to 57 percent). Large size companies ($100 million or more in annual revenue) tend to be the next highest users for most of the various services listed.

We’ll see an even bigger move to hosted applications and virtualization in 2010 and beyond. The managed services market will increase over the next year, according to a majority of IT service providers (84 percent) surveyed by CompTIA. This sentiment is in line with other industry research. Ovum predicts the global managed services market size will be $66 billion by 2012. According to In-Stat, overall U.S. managed services revenues will grow at a steady 7 percent CAGR through 2012.

Also found in the CompTIA research, MSPs believe that their own managed services revenues will increase over the next year. One-half are looking forward to a significant increase. The data confirms IT firms begin offering managed services based on demand from clients and the attraction of high margins.

A story that’s been missed out domestically to a great extent is the impact the small-to-medium-type business has on the economy. The small-to-medium business doing business with other small-to-medium businesses was really what kept the economy from dropping off the cliff. So in that sense the IT industry had its smallest level, you know, companies that are less than 100 employees, certainly less than $100 million or $50 million in annual sales, did the business that they provided to their customers, probably kept some of their customers in business and certainly kept them in business.”

— Todd Thibodeaux, President and CEO, CompTIA

“Communications technology will be changed in substantial and probably unforeseeable ways. To the extent that we can project, Internet telephony offerings and wireless services will likely continue to become more sophisticated, often in startling and innovative ways. Internet telephony offerings will continue to give rise to innovative service features and options, paralleling Internet evolution trends and developments. Wireless services will increasingly incorporate computing and enhanced functionality, as wireless phones increasingly move in the direction of PDAs and computing devices. Messaging services and features should continue to evolve and substitute for voice communications.”

— Thomas K. Crowe, Partner, Law Offices of Thomas K. Crowe, P.C.

“Bandwidth requirements will continue to increase and stress current infrastructure including wireless and wireline. I believe prioritization for voice, video and data will be critical to managing network saturation and that we’ll continue to see developments in this area.”

— Adam Edwards, President, Telarus Inc.

“For several years, industry experts have generally forecast the demise of traditional POTS service, to be replaced by wireless and VoIP services. As a general matter, we’ve seen this prediction come to fruition, although wireline service is still alive and kicking. Specifically, the early adopters have transitioned to VoIP in the residential space, and we are seeing rapid growth on the business side as well, although the business sector still lags behind the residential sector in terms of market share. Put simply, I think we are at the beginning of a major wave of new business opportunities for VoIP on the business side. For proof, one need only take notice of the phone systems at many of the national retail chains; more often than not, the stores are equipped with SIP phones instead of legacy PBX systems.

The United States, compared to other countries, has been slow to deploy WiMAX. I don’t expect that to be the case 10 years from now. When (not if) we have coast-to-coast WiMAX coverage, look for wireless VoIP to take a substantial bite out of the cellular market share apple. Consumers will have a wireless VoIP phone, which will replace not only landlines, but will also replace cellular phones.”

— Greg Taylor, Attorney, Technology Law Group LLC

“As mobile devices become more powerful and wireless speeds increase, I anticipate we will see a continued blossoming of their practical business uses. It wouldn’t surprise me to see high-quality videoconferencing capabilities coming standard with most business class mobile devices and networks in the next 10 years.”

— Dave Wallace, President, Aligned Communications

“Wireless technology will continue to drive sales in the communications industry for the foreseeable future. Landline and LD businesses will continue to atrophy as consumers look to cut household expenses by going entirely wireless. Portability of landline phone numbers is making this even easier. On the wireless side, margins from carriers will continue to squeeze the indirect channel making it more important than ever to have a strong business plan that focuses on the most profitable ends of the business. Costs of handset inventory will make inventory management and churn reduction key elements to making money. New smartphone technology will continue to do more and the proliferation of applications will continue. Apple iPhone now has over 10,000 apps, Google Android over 8,000 and Blackberry over 3,000. Companies who can understand and package these offerings to niche markets will do well.

Prepaid wireless solutions will continue to do well as long as the economy is weak which appears to be the case in the short-term. Prepaid offers significantly less income than postpaid on the activation side. The Obama administration’s anti-small business policies will continue to negatively impact the indirect channel in multiple ways. Current health care and Cap and Trade Tax proposals have the potential put extreme pressure on the bottom line and will force many to close their doors or scale back significantly. Indirect channel managers and their employees should be encouraged to call their senators and congressmen and voice their opposition to these programs.

Accessory and service categories will become increasingly important as profit-drivers for independent resellers and may make the difference between staying in, or going out of business for many smaller operations.”

— Mark Landiak, Executive Director, WIBOC (The Wireless Business Owners Consortium)

“The office phone will have disappeared from the desktop with the smartphones and computers processing all communication in a intergraded manner — one number with presence and strong IM technology deployed.”

— Dale Stein, Co-founder, TAG National

“Mobile voice service, which grew at amazing rates to surpass fixed voice in 2003 as the largest telecom service worldwide, will slow during the next five years to a CAGR of -0.6 percent. Mobile voice markets in mature regions are seeing pricing pressures similar to those in the fixed sector and emerging markets, while considerable and healthy, will not be enough to sustain overall growth. Only mobile data, with a CAGR through 2013 of 14.4 percent, has a truly dynamic character within the legacy telecom services portfolio.

Revenue from the total communications equipment market is suffering the most dramatic reduction in the communications market during the current downturn, but is expected to return to a growth trend beginning in mid-2010. Infrastructure equipment has just completed five years of generally steady growth after its historic downturn between 2000 and 2003, but will not return to its pre-recession levels until 2013. The enterprise networking and communications market will show a somewhat faster recovery, returning to 2007 sales volumes by early 2012, while the mobile devices market will rebound by 2010.

Telecom service providers, in responding to today’s challenges, can embark on several strategic approaches, including participation in nontraditional services and moving into managed/hosted services and value-added services; or they can continue with their current core activities, while constantly seeking incremental operational improvements.

  • By 2012, nontraditional service revenue will comprise 8.1 percent of total telecom service provider revenues globally, up from 2.8 percent in 2008.

  • By 2012, managed service revenue will make up 10.3 percent of total telecom service provider revenues globally, up from 5.4 percent in 2008.

  • By 2012, basic and unmanaged telecom service revenue will decline to 81.6 percent of total telecom service revenue globally, down from 91.8 percent in 2008.”

— Tiffani Bova, Vice President of Research, Gartner Inc.

Read more about:

Agents
Free Newsletters for the Channel
Register for Your Free Newsletter Now

You May Also Like