2009: The year ahead in the US

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2009: The year ahead in the US

Predictions are notoriously difficult to make in the IT industry, but here are half a dozen anyway. Some may be wrong, some will be right, but all are based on experience of how the industry works.

Contraction

There is no doubt that next year will be one of the toughest business climates since the 1930s. Getting capital is going to be difficult, companies aren't buying and even consumers, the mainstay of Western economies, are going to be holding onto their pennies.

We've already seen a drying up of venture capital for start-ups, and this is going to get worse before it gets better. One of San Francisco's leading venture capital firms recently held a meeting of the companies it had invested in, and presented an unusually stark image. On entering the office the attendees saw a gravestone with 'Good times RIP' on it.

It's not just start-ups that are going to have it rough. Companies with too much debt, or with sales not expected to kick in for a few years, are going to have a very tough time indeed. Life is going to be difficult in the IT sphere, perhaps not as rough as retail or the finance industry, but it isn't going to be pleasant.

Goodbye Palm

Palm used to be the dominant force in handheld devices, but the company is now on its way out. This year at the Consumer Electronics Show in Las Vegas, Palm is expected to show off a new operating system that it hopes will turn its fortunes round. In my opinion it won't. Palm is dead in the water.

The problem is that the company is fighting a war on two fronts, which as Germany and now the US have found, is a losing proposition. On the consumer side the iPhone is taking sales from Palm left, right and centre, and there is very little the company can do about it. Apple is sexy, Palm is not.

BlackBerry rules the business roost, meanwhile, and is hammering Palm. Research In Motion has built a solid fan base with very usable hardware and software to match. Palm has no answer to this; it makes OK devices, but nothing special, and offers poor software integration with server technology.

Palm may have thrown away one of the biggest advantages in the industry due to poor management and desultory design. It will probably last past 2009, but I'm willing to bet that management are already looking for a buyer.

Vista dies

Microsoft has already signalled that it has pretty much given up on Vista. Businesses can't afford the software (and the hardware upgrades it requires), consumers aren't keen and no amount of advertising will help that.

From a business perspective most IT administrators aren't too down on Vista, it seems. There are a lot of good changes in server tools and security that make Vista a good option. But not good enough. At a time when money is tight, it's difficult to sell the board on the idea of the cash needed to upgrade when profits are tanking and funds dry up.

What makes it harder is that Microsoft has given up selling Vista and is now promoting Windows 7 like crazy. We won't see workable Windows 7 code until the tail end of 2009, but Redmond is doing its utmost to make sure that admins realise that XP is not going to be around forever and, if Vista isn't palatable, Windows 7 will be.

Apple falters

Apple has had a very good run over the past few years, but this will change in 2009. While the iPod and the iPhone have been great cash cows, they have changed the company somewhat. Apple is now more focused on consumer electronics than it has ever been, and consumers just aren't buying any more.

Meanwhile, the company has made little inroads into the operating system sphere. Its market share is up, but not by much, and in the enterprise market Apple still isn't trusted to produce code that runs well on servers. Outside specific industries, Apple is not the software of choice and will not improve on that margin while it continues to pander to the consumer space.

The other elephant in the living room for the company is Steve Jobs. While he inspires staff like no other, he isn't going to be around forever and when he steps down Apple's share price is going to take a major hit.

Unlike Bill Gates, Jobs hasn't paid much attention to the question of a successor. He's looking healthy but, after a brush with cancer, everyone's waiting for the announcement that he's stepping down. When he does, and it's unlikely to be next year, the company will be rudderless and it'll take an extraordinary person to keep the company on an even keel.

Web 2.0 takes a hit

For the past few years we've been hearing about how user-generated content, or Web 2.0, is the next big thing. But when people are fighting to keep their jobs and put food on the table, the amount of time they'll spend adding content to other people's web sites will drop.

For the likes of YouTube there will always be bored teenagers willing to upload video, but Twitter, along with smaller blogging sites and social networking companies, are going to feel the pinch.

Sooner rather than later investors are going to ask for a return, and all these areas have very little to offer. Advertising will be tougher to sell, and no social networking site has yet managed to get sufficient capital out of its users.

Green technology

President-elect Barack Obama has made a big deal about how he's going to get America back to work. This may be true, but don't expect much relief for the technology industry.

The main thrust of government spending isn't going to be on technology jobs, it's going to be on converting blue collar manufacturing jobs to maintaining the national infrastructure: bridges, roads and buildings. There are going to be precious little funds allocated to white collar IT workers.

While there will be funding for things like solar cell technology, power management software and electrical grid control, don't expect a flush of funding for traditional industries. The cupboard is bare at the US Treasury, and money is going to be very tightly rationed.

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