I attended the Calgary road show event for Deloitte’s 7th annual Technology, Media & Telecommunications (TMT) this morning at the Calgary Chamber of Commerce. Sorry about the length of the post… lots to talk about!
To be clear about the title of this blog post, Deloitte did not at any time actually endorse, or even talk about, Techvibes.com. I was simply emphasizing a point they make that the future of media is Techvibes.com-like online entities (see #1 under Media Predictions below).
There were about 100 Calgarians in all sorts of ski gear that braved the -30 degree weather to attend. The road show was in Vancouver yesterday morning… of the 100 people signed up to attend, only 20 showed up. As Rob Lewis, fellow Techvibes blogger said in an email to me yesterday: “I was scheduled to go to the Deloitte road show event in Vancouver this morning but we had a rare snowfall and the city shut down. We’re not nearly as tough as you Calgarians! Brrrrr.” ☺ I’m not sure we’re tougher (although more use to the cold!) – maybe the turnout is yet another indicator of Calgary’s simmering high-tech scene that I keep getting excited about.
The Canadian version of Deloitte’s 2008 predictions were entertainingly delivered by technology pundit Duncan Stewart, Deloitte’s Director of Research (also President of Asset Management Firm: www.dsam.ca). Most of the words in this post are Duncan’s, and I’m using poetic license to paraphrase ’cause I was typing as he spoke. Everyone can read a copy of the Three Reports on Deloitte’s 30 2008 Predictions, and the more targeted 15 Canadian predictions… these are my live notes on what was said, punctuated with some of my own thoughts, o’ course. These predictions are to have impact on the next 12 months, not crystal ball predictions of 10 years from now. And, they focus on the bottom line; i.e. predictable outcomes that are commercially viable. That alone makes me stand up and take notice. Now, without further ado, here are Deloitte’s 15 2008 Canadian Predictions:
1) Digital data protection.“My PC or Smartphone is disposable, but what’s stored on it is priceless.” As PC and cellphone prices drop, the value in them is based on the priceless data we’re all storing (including the 200 hours we spent ripping our CDs into MP3s!). Duncan mentioned that Vancouver-based Absolute Software is one firm capitalizing on laptop security and theft … it’s seen it’s stock price go from $5 to a high of about $20 in the last year.
2) From anonymity to authenticity. Users are happily exchanging anonymity on the Internet for usefulness. In the light of Facebook success, we’re no longer just fictitious avatars and usernames, we’re now ok with our real identities online. Interestingly, about half the crowd in Calgary had Facebook accounts. The biggest issues here are fraud, predators and manipulators.
3) How to manage talent when legacy becomes the future: everything old is new again. IT departments need to keep their COBOL programmers … an HR strategy is required to retain the large base of skills and institutional memory for institutions. Personally, I disagree that this is top 15 technology issue / opportunity, and frankly, it seemed self-serving as Deloitte’s is pushing it’s consulting for talent strategies(of course, they paid for breakfast, so they can plug all they want). Duncan added a good geeky point: “Cobol is the only programming language created by a woman.” Grace Hopper. Hmmm … didn’t know that.
4) The flight to privacy. How well do we want the Internet to know us? Balancing user friendliness with security. In order for the Internet economy to work, “I don’t want to enter all my information for every single transaction I do.” What have you agreed to when you enter this information (every company has their own value system and uses for data)? At the same time, companies like www.nebuad.com are betting that people like being watched by presenting advertising directly related to what they are reading … for example, readers looking at environmental content are more likely to see ads with a hybrid car vs. a hummer.
Duncan notes that, interestingly, one of the issues of the current Hollywood writer’s strike is based on the clash between media and technology. Writer’s want to get paid for when their work goes on Youtube or is downloaded as a Podcast, but the studios don’t exactly know how to monetize it all to pay them. My personal thought is the studio doesn’t want to pay them, they shouldn’t use the content … pretty black and white, if you ask me.
Anyway, Duncan had another thought about online advertising: is the huge shift in online spending really driving an equivalent amount of businesses … is Google valued correctly? Too hard to tell at this point. Here’s three of Deloitte’s media predictions:
1) Stop the presses! Online is moving to the front page: the whole world is watching … and filming, reporting, writing, arguing, programming and editing. Duncan noted that bloggers armed with their own camera’s and laptops have become a huge force in today’s news, but he also warned that with that notion comes issues in journalistic interpretation (see, the title of this post is meant to playfully reinforce this notion!). However, he says, news sources will be eventually policed by the community of readers (like all good social networks, frankly), citing the example of Korea’s www.ohmynews.com where ~400,000 people contribute and edit the wiki-like newspaper for the 7,000,000 online readers. Duncan also noted that the amount of data available for Mash-ups helps you and I stay way ahead of traditional journalism that needs to target the masses. For example, when “I mash-up a Google map with crime statistics, I can perceive this data in any number of ways that pertain to my specific interests.” In my mind, this is one of the best technology trends there is … traditional media is very much of a closed system. Rupert Murdoch in the U.S. controls 60% of the media and serves the corporations that pays it’s advertising bills … more or less destroying free speech in it’s wake. Vancouver’s www.adbusters.org has been raging against this journalistic integrity “State of Emergency” for some time, including being denied airtime for their paid commercials by pretty well all the major networks.
2) Online piracy. According to Twentieth Century Fox, over half of pirated movies globally are illegally recorded in Montreal. The same technology used for piracy is now helping to slow it down. Duncan states that Waterloo based Sandvine posted a 37,500% 5 year revenue growth from broadband products which include deep packet inspection for ISP’s to detect illegal downloads.
3) Time for music to get tangible. How do you gift wrap and MP3 file? Physical music sales are 20% down in 2007, 50% since 1997. Revenue is up from rock concerts but there’s more opportunity to provide concert goers with flash card music and pro photo memories. Duncan notes that Rainbow from Radiohead had 7M downloads (lots of them free), seemingly as a loss leader … they still debuted as #1 for 3 weeks on the music charts when the CD came out.
Telecom is heading into a downturn for the first time in 30 years. What do the companies do now?
1) How do you capitalize on the $10 mobile phone? Connecting machines to each other and the network makes them more valuable. Cellphones have hit price in-elasticity … further discounting of phones does not drive more penetration. Duncan states that 50 countries in the world have more cell phones than people. So … stop selling cell phones to people … start using them to machines for monitoring, asset tracking, etc… Vending machine for example. “I’m out of cheese puffs!” Coke machine: “I wasn’t used all day … I saved this much electricity ‘cause it was easier to keep the Coke cold.”
2) Giving mobile GPS direction. location, location, location. These are the 3 things that matter most in cellular technologies. Cell phone manufacturers make them with GPS chips, but most aren’t activated. However, just because they can be, doesn’t mean they should be.
3) Gray is good.The ROI from making telecommunication to “Silver surfers”; the last great untapped market for cellphone wireless and Internet. But failing eyesight, arthritic fingers and other accessibility issues will cause companies to rethink their approach.
Green TMT predictions
Duncan discussed “To what extent is green connected to boom times? Will people continue to embrace green at a premium when they are in a recession?” Deloitte’s predictions:
1) The challenge and opportunity of water scarcity. Water is the new oil. Luckily, Canada has lots of both – but not without it’s challenges. Melting glaciers in the Himalayas give the area all their water … however, what happens when the glaciers melt? In addition to our freshwater resources (10% of world’s renewable water serving 0.5% of it’s population), Canada is a world leader in water purification such as distillation and desalinization. But, also a great user … it takes 4 barrels of water to make 1 barrel of oil.
2) From zero to green hero – nanotechnology’s green renaissance. By some estimates, the single biggest users of nanotech today is for environmental applications. Canada is at the forefront of nanotechnology due to leadership by the National Institute of Nanotechnology in Edmonton.
3) The year when LEDs go green. They’re brighter, whiter and offer dramatically lower power consumption, clean manufacturing and disposal, which you shouldn’t have to do since they last so long (17 to 25 years). “Haitz’s Law”: LEDs get twice as bright and twice as cheap every 18 months and in 2 to 3 years, should be equivalent to their incandescent cousins in cost and performance.
4) Getting value from virtualization. Once thought to be the next big thing due to cost savings, better security, better disaster recovery and lower power consumption, companies are slowing their adoption since virtualization is not a one-size-fits-all solution. For example, VMWARE stock is off 30% on slowing sales. Virtualization is declining except in environmental applications, where the energy savings can be a key driver.
5) The living room moves closer to being public enemy number one. Giant screens, especially plasma TV’s, consume a great deal of power (2x to 4x those of their smaller CRT cousins). Xboxes, sub-woofers, you name it … consumer electronics accounts for 15% of energy consumption in homes … going to 50% by 2020. Children should get in on the action; tell you kids about www.energyhog.org.
In the Q/A that followed, Duncan: “Venture Capital spending in high-tech companies in early stages is way down. However, even with the shackles of a lack of good tax credit structure at both federal and provincial level to fund high-tech, we are already a global leader.”