Saturday, January 01, 2005

Business Telecom Trends Starting 2005

As 2004 fades and the new year of 2005 begins, let's take a look at what might be in store for us in the near future.

Enterprises have enjoyed a run of increased productivity from their information technology investments and they're not about to let that stop if they can help it. I expect expansion of computer networking, including intranets, extranets, virtual private networks, remote access workers, and even the dreaded outsourcing. At the same time, the cost of wide area network connections continues to fall. This opens a window of opportunity for the small and medium size businesses that have been envious of enterprise level connectivity to suppliers and customers. Now smaller organizations can afford to link their stores, restaurants, field offices, shops and warehouses with fractional or full T1 lines. The stampede for everybody to be networked is beginning.

Did you notice what happened this Christmas shopping season? Consumers spent about $9 billion online, an increase of almost 25% over last year. Absent was the usual whining and hand wringing by the major bricks and mortar retailers. Why? The Internet is now their domain. Literally. Just as merchants added mail order operations to get more customers decades ago, they are now getting firmly entrenched with online stores. I noticed this year that companies have become vigorous to the point of snarky in protecting their trademarks. Up until recently, many traditionally offline businesses considered Internet sales a nice bonus and were glad to let independent Internet affiliates sell what they could on a commission basis. Now the principals want it all. More and more affiliate agreements prohibit bidding on keywords or even actively promoting company names or trademarks in search engines. That's a sure sign e-commerce has gone mainstream.

VoIP is a piece of the technology puzzle, although it seems to be getting all the attention lately. As more and faster network connections are put in place, it doesn't take long for somebody to see the potential savings in avoiding telcos for intracompany phone calls. VoIP makes the most sense when wiring new offices or adding more phones than your PBX can handle. You gain the benefit of bypassing toll charges when you call your own phones even hundreds or thousands of miles away. There is less wiring with computers and phones on the same network. In addition, moves, adds and changes are less expensive, easier and faster in many cases. These benefits are diminished if most of your calls are out of house or if you have to rip out a modern phone system and buy everything new again. Still, those who say VoIP is the telephone system of the future are almost certainly right. Even the carriers are embracing IP networks. We should see a steady and even accelerating increase in the number of IP phones and IP PBX systems by small, medium and large businesses.

WiMAX wireless networking technology is about ready to make its debut. With a range of up to 30 miles versus 300 feet for WiFi hotspots, WiMAX seems like a natural for Internet Service Providers. It is also likely to be deployed as a wireless Metropolitan Area Network for business to business communications. A competing technology is meshed WiFi networks, where each node helps to carry the overall network traffic. More and more businesses now expect to be portable and mobile, ensuring expansion of wireless technologies for the foreseeable future.

The real "elephant in the waiting room" is when overall business is going to expand to the point of adding employees in quantity or investing for more than just efficiency improvements or competitive necessity. Is 2005 the year the next technology boom begins? I'll tell you in the first posting of 2006.

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