technology predictions › 2009 › ... · technology predictions tmt trends 2007 the deloitte...

Technology, Media & Telecommunications

Audit.Tax.Consulting.Financial Advisory.

Technology PredictionsTMT Trends 2007

17068 CH TMT Tech 21/12/06 10:05 am Page B


The Deloitte Touche Tohmatsu (DTT) Technology, Media &Telecommunications (TMT) Industry Group consists of the TMTpractices organized in the various member firms of DTT andincludes more than 5,000 member firm partners, directors andsenior managers supported by thousands of other professionalsdedicated to helping their clients evaluate complex issues, developfresh approaches to problems and implement practical solutions.There are dedicated TMT member firm practices in 45 countries andcenters of excellence in the Americas, EMEA and Asia Pacific.DTT’s member firms serve over 90 percent of the TMT companies inthe Fortune Global 500. Clients of Deloitte’s member firms’ TMTpractices include some of the world’s top software companies,computer manufacturers, wireless operators, satellite broadcasters,advertising agencies and semiconductor foundries – as well asleaders in publishing, telecommunications and peripheral equipmentmanufacturing.

About TMT

17068 CH TMT Tech 21/12/06 10:05 am Page C

1

Foreword 3

Executive summary 4

Technology goes green 6

Reinventing the user interface 7

Heeding the hidden costs of storage 9

The business case for biometrics 10

The rising cost of free technology 11

The regional carousel with a global impact 12

History predicts technology’s future 13

Technology’s social network dividend 14

Parasitic power to the people 16

Arise, the bionic human 17

Notes 18

Glossary of technical terms 20

Recent thought leadership 20

Contacts at DTT and its member firms 21

Contents

17068 CH TMT Tech 21/12/06 10:05 am Page 1

2


17068 CH TMT Tech 8/1/07 9:05 am

3


Welcome to the 2007 edition of the DTT TMT Industry Group’sTechnology Predictions.

The technology sector in 2006 was characterized by diversity andgrowth. As forecast last year, search continued to dominate theInternet, as well as the headlines. The Internet continued itsevolution into a fully commercial infrastructure, with disparitiesbetween its rules and those of traditional companies, steadilylessening. Technology’s role in the education process also matured,with digital classrooms and distance learning becoming morewidespread. Open Source software became a greater force to bereckoned with, as several global software houses opened up theircode to the community. Cost control was a constant theme, withtechnology companies making increasing use of collaborative R&Dand offshoring. Consumers were offered an increasing list ofconnected devices, designed for a variety of applications.Technologies to facilitate man-machine interaction gained furthertraction, with speech recognition becoming ever more common. Asever, the highest impact technologies were those that transformedconsumer behavior and became part of the common lexicon. Thisselect group was dominated by social networking companies in2006.

The outlook for 2007 looks as though it has the equivalent potentialfor diversity. 2007’s Predictions analyze: the environment’s growinginfluence on the technology sector; the reinvention of the user-interface; digital storage’s hidden costs; the emergence of biometricsecurity; the varied costs of free technology; the potentially globalimpact of carousel fraud; new combinations of existingtechnologies; the technology industry’s dividend from socialnetworking; the emergence of parasitic power systems and thetechnologically enhanced human.

I am often asked how the DTT TMT Industry Group’s Predictionsdiffer from the many similarly titled reports produced by otherorganizations. I believe Predictions has a unique combination ofobjectives and methodology.

The Predictions series has been designed to provide a diverseselection of views and thoughts that challenge, inform and engageindustry leaders and executives. It neither aims, nor claims to be, a comprehensive forecast of every anticipated event.

The methodology used to generate the Predictions series is revisitedevery year. The 2007 series of Predictions has included inputs fromconversations with member firm clients, contributions from DTTmember firms’ 5,000 partners and managers, specializing in TMT,and discussions with industry analysts.

This series of Predictions has incorporated two additional sources.

The first is a series of 36 interviews with leading executives fromaround the world, on the key industry theme of convergence.This global primary research exercise, spanning the TMT sectors,produced a wealth of insight, much of which is reflected in many ofthis year’s Predictions. The interviews, collectively published by DTTas a book, Convergence Conversations, are available fromwww.deloitte.com/tmt.

The second source is a column, Drowning by Numbers, that theFinancial Times invited Deloitte & Touche LLP in the United Kingdomto write on a fortnightly basis. Some of the ideas for Predictionshave been tested in this column.

I hope that the result of our endeavors provides you with plentyof food for thought for the year ahead. On behalf of DTT’s TMTIndustry Group, may I take this opportunity to wish you all the bestfor an enjoyable 2007.

Igal BrightmanGlobal Managing PartnerTechnology, Media & Telecommunications

Foreword


4


The environment’s impact on technology and how it influences theconception, marketing and distribution of various technologies arelikely to be among the most important developments of 2007.Environmental decline is likely to continue to cause mainstreamconcern, as much as to the business world as to citizens.Technology companies may respond, by designing more efficientdevices, by highlighting how technology-based services can provideless damaging alternatives for activities such as business travel, or bydifferentiating themselves on the basis of responsible powerconsumption. Technology companies should also be able to growrevenues by developing products and solutions that addressproblems in other sectors, perhaps in the use of computer-aideddesign to create buildings that are more heat efficient, or throughthe creation of lighter materials that lower the weight, and hencefuel consumption, of vehicles.

Technology’s impact on the consumer, in the form of the userinterface, may also come to the fore this year. As in years past, alarge proportion of all consumer electronic devices may be returnedto retailers in 2007. These devices are likely to be brought back notbecause of technical failure, but rather due to flawed design.An unusable product may have as little value as a broken one,regardless of its underlying technical brilliance, and in 2007,technology companies should make concerted efforts to removecomplexity and over-specification at the design stage. Part of thesolution may lie in better overall design, but part may also derivefrom more active use of new technologies that remove the need forpop-up menus and keystrokes, from artificial intelligence to the useof accelerometers. Companies that focus on minimizing productcomplexity may achieve greater success than competitors boastingsuperior, but less accessible, technology.

A key characteristic of technology in recent years has been thesteadily falling price of digital storage. Though that rule may stillapply during 2007, consumers and businesses may becomeincreasingly aware and concerned about some of the additionaldirect and indirect costs of digital storage. The hidden costs ofstorage may range from legal obligations for enterprises to keepingmany years’, equivalent to several petabytes’ worth of data.For consumers the cost may become manifest through the lossof irretrievable digital photographs or music collections, due tocorrupted files. The imperative for all users of digital storage isto back-up data regularly and, possibly insure against its loss.The opportunity for the industry is to address the growing needfor such services.

Security is one of society’s other perennial concerns. The growingvolume of digitized data in 2007 may raise demand for new waysfor keeping all forms of data safe. Traditional approaches to security,from PINs to passwords, all have weaknesses. People forgetpasswords. The typical remedy of writing down passwords inprominent places often undermines the protection they provide.Biometric data on the other hand, such as the iris, fingerprint andpalm geometry, are all unique to the individual, cannot be forgottenand may be harder to falsify. Thus the demand for biometric-basedsecurity, using a physical characteristic of the individual as the key,may jump in 2007. The critical challenges for the industry may beto agree global biometric standards, to implement back-up systemsand to ensure the public is made aware of biometrics’ benefits.

While business and residential consumers will remain willing to payfor many products and services, many technology companies mayoffer selected products and services for free. During the course of2007, such free offers may become increasingly costly as canbe seen with the rise of free email, which has catalyzed Spam.Spam has been, and is likely to remain, both a nuisance and aplatform for the distribution of viruses, worms and other maliciouscode. Free IM services have had similar consequences. Free VoIP hasbecome host to its own curse, Spam-over-Internet-telephony,otherwise known as Spit. As a result, some companies mayincreasingly start charging for services that were formerly free.Consumers are likely to become increasingly aware of the hiddencosts of free technology and may therefore seek higher quality,paid-for alternatives.

Tax authorities may be delighted to see free products and services,in any sector, becoming chargeable and hence taxable. The sameauthorities would also be pleased to suppress the avoidance of taxfor technology-based goods being used in a fraud costinggovernments tens of billions of dollars. While carousel fraud isprincipally a European problem, its ramifications are likely tobecome global in 2007. The fraud exists in the European Unionas exporters are able to claim VAT refunds while importers areresponsible for collecting VAT from their customers and passing thison to the tax authorities. Fraudsters collect refunds while holdingonto VAT owed to the treasury. Every technology companyoperating within or selling into the European community may haveto alter its supply chain, and adjust transportation and deliverylogistics in response to new legislation introduced by stategovernments within the European Union to suppress carousel fraud.

Executive summary


5


Technology companies may also need to alter their approach toR&D. In 2007, many companies plan to invest considerable timeand money seeking out the next hot technology. However, thetechnologies most likely to grab tomorrow’s headlines may wellalready exist today. But what will likely make them a success is thetechnology industry’s ability to create innovative combinations ofexisting technologies. Consumers should provide a good guide tothe optimal combinations of technologies. Products and servicesthat address consumers’ needs rather than engineers’ whims arelikely to be more successful. Involving sales and marketing teamsin the design and development process may help generate a betterratio of hits to misses: these departments may have a closerrelationship with end users.

A good example of a consumer-driven, technology-based service issocial networking, which was one of the major successes of 2006.It has generated hundreds of millions of dollars in both realized andperceived value. Social networking has enjoyed rapid growth, whichmay well continue into 2007. But the focus on expansion hascaused some social networks to overlook the need for efficiency,robustness and compliance. In 2007 social networks are likely toturn to technology companies to solve an array of problems, fromidentifying and removing copyright material to making the postingand downloading of content as instant as possible. Resolving theseissues may be key to social networks’ ability to realize their revenue-generating potential, much of which is likely to be in the form ofadvertising. Technology companies may well enjoy a generousdividend from the success of social networks.

2007 may also see the technology industry start to deal with one ofits most critical, yet most widespread problems – portable power.The current solution, the battery, has various drawbacks, from tensof billions of dollars in annual expenditure on new batteries to thecost of safely disposing of billions of discarded batteries. In 2007the technology sector may increasingly adopt a new approach toportable power. Rather than trying to improve the battery, it mayturn to power-scavenging solutions that draw energy from theenvironment around them. Body heat, ambient light, vibrations andmovement may all be harvested to supply supplementary charge totiring batteries.

Finally, in 2007 technology may manage not just to reinvigoratetiring people but also to create enhanced versions of the humanbeing. Artificial exoskeletons could be used to provide superhumanwalking and running ability. Advances in prosthetics may allowathletes with artificial limbs to take on and beat the world’s bestable-bodied athletes. Artificial red blood cells, up to 200 times moreefficient at storing and releasing oxygen, could allow humans tohold their breath underwater for hours, rather than minutes.2007 may be the year in which the evolution of evolution begins.


6


The days of the environment being the sole domain of green fringemovements are long over1. Concern about climate change hasgrown steadily throughout 2006, with the Stern report, issued bythe UK government, attracting global attention and promptingincreasingly serious and urgent calls from government and industryfor action2.

2007 may well see an escalation in the search for both genuinecauses and scapegoats for climate change. While the energy,transport and industrial sectors have borne the brunt of criticism todate, the finger of blame may also be pointed at the technologysector. In some respects this mirrors some of the responses to theCalifornian energy crisis at the turn of the decade when unfoundedaccusations of causing energy blackouts were leveled at thetechnology sector3.

The reality is that technology is on both sides of the same coin.Not only has it been one of the causes of greenhouse emissions, butit is likely to provide a cure as well. Every electronic device consumespower and leaves at least a trace of a carbon footprint. Nationaltelephone networks, in providing 48 volts of power to every phone,may collectively use one percent of a country’s entire energyconsumption4. The one billion mobile phones shipped every year,some of which may be used for just a few months before beingdiscarded, collectively represent 86,000 tons of materials, some ofwhich may be toxic5. Electronic waste in the United States equaled290,000 tons in 2003, of which only about 10 percent wasrecovered6. Even something as seemingly innocuous as anInternet search may be based on the power of up to a millionservers, concentrated into acres of warehouses, dependent on air-conditioning to prevent the installation from melting7. For everyunit of energy required to power a server, a further unit is needed tocool it8.

Yet in other ways technology has a benign impact on theenvironment. The latest high-definition, video-conferencing units9,while consuming copious power relative to a phone call, generatefewer greenhouse gases than would result from flying to a meeting.Telecommuting is itself enabled and enhanced through technology,via advances such as better quality audio and video. Whiletelecommuting may not provide a practical solution for everyone, it can certainly reduce the overall number of work-related journeys.Improving the functionality and power requirements of certaindevices, such as IP-based phones, may remove the need for morepower-hungry PCs in some environments10. Standardization, forexample around USB, has removed the need for separate tricklechargers for tens of millions of peripherals, from webcams to VoIPphones, which are instead powered via their host device, typically a PC.

In response to growing concern about the environment in general,technology providers are likely to start differentiating on the basisof their energy consumption, as has happened in a range of othersectors, from white goods to motor vehicles. Technology companiesare also likely to market, internally and externally, any majorinitiatives designed to save energy, such as Google’s usage of solarenergy to provide 1.6 megawatts of electricity for its headquarters11.

Bottom lineThe environment provides both opportunities and pitfalls for thetechnology company leader who is willing to invest in this area.On one hand, given the escalating worry over climate change,the technology sector should ensure it gets its case across. It should acknowledge where its consumption of energy isexcessive and unwarranted. On the other hand, the sector shouldalso be able to point to where its impact is more positive overall.The technology sector should be wary of being made ascapegoat.

Device manufacturers should design products and their packagingwith energy efficiency in mind. The consumer should be mademore aware of energy usage at any point in time, for example byplacing a simple indicator at the front of each device, showingpower consumption12. Manufacturers should always be looking atways to chip away at power consumption, such as by turning offscreens, backlights, processors, hard drives when not in use andalso by standardizing peripherals such as chargers across all devices.

However, marketing around power consumption should not focussolely on environmental impact. Business users and privateconsumers alike are more likely to put saving money before savingthe planet13.

The technology sector should take a long, hard look over whetherdigital alternatives are always the better ones, particularly if theanalog incumbent does the job well enough. Proponents ofelectronic books should calculate whether using paper has lessimpact on the environment, particularly for lengthy tomes, suchas Tolstoy’s War and Peace, given the number of recharges thatmay be required to finish reading them. Major transport hubsshould also consider whether passenger information displaysbased on plasma or LCD technology do a better job ofcommunicating travel information relative to mechanical, rotatingdisplay-boards that use much less power.

Industry-led initiatives may well be the better approach as thealternative may be government regulation. The latter may evencome in the form of taxation based on the power consumption ofeach device, relative to its peers.

Finally, and perhaps most significantly, saving the world mayboost some technology companies’ bottom lines. The applicationof technology may answer some key environmental issues facedtoday. Technological progress underlies the development ofrenewable energy, from solar to parasitic power. Technologicaladvances have driven significant increases in fuel efficiency in allforms of transport, both through the creation of better engines aswell as the use of lighter materials14. Technology has facilitatedthe design of more energy efficient buildings, such as the SwissRe Tower in London, which incorporates features such as passivesolar heating15. Combinations of technologies, such as PDAs, GPSand fleet management software can lessen unnecessary journeysand enable paperless operation16. These are just a few examplesof how technology can decrease reliance on energy whileproviding opportunities for companies to profit.

Technology goes green


7


Over half of all consumer electronic devices returned to retailersare not broken – they have just confounded their owners withtheir complexity17. A survey found that the tolerance-level of mostconsumers who struggle to make a new device work is limited to20 minutes of effort only. After this they tend to give up, concludethat the product is faulty and return it to the store18. An unusableproduct may have as little value as a broken one, regardless of itsunderlying technical brilliance.

The falling cost of processors may be a key culprit, encouragingmanufacturers to include increasing functionality in their products.The logic is that if the marginal cost of an extra feature is minimal or even zero, then it should be included, regardless of whether it isdesirable or practical for consumers. Yet there appears to be animplicit cost in terms of the ultimate usability of the device. Even thehumble mouse mat, which is typically inert, is now available as aversion that incorporates a radio, headset connection, alarm clockand calculator; as a result of which, this particular mat has requireda user manual19 to accompany each shipment.

In 2007, companies that manage to minimize product complexitymay achieve greater success than competitors with superior, butrelatively inaccessible, technology20.

A growing number of innovations may increasingly be used tomake any technology-based device, from a watch to a car, simplerto operate. An emerging technology that could be significantincludes haptics, which uses touch for both feedback and control. In a car for example, haptics could be used to warn, via a vibratingalert, drivers that their vehicle is straying out of lane21.

Another emerging technology is the accelerometer, a form ofmotion sensor, which is likely to be popularized initially withincontrollers for video games22. This technology may also be usefulfor e-books, allowing the turn of a page with just a light flick ofthe wrist. It could also be appropriate for field-force applications,allowing engineers to scroll left, up, right and down in a digitalmap, with just a tilt of the device required. Accelerometers in cell-phones could play a major part in making devices almost push-button free, particularly when coupled with speech-recognitiontechnology23.

Indeed, speech recognition may also become more widespread,as a natural means of controlling products and services24. While theautomobile is likely to be the most common environment for speechrecognition25, personal computers, mobile phones and eventelevision sets26 may also make increasing use of it. Additionally,touchless devices that respond to gestures rather than contact mayalso become a reality27.

Reinventing the user interface


8


Bottom lineSimplicity, particularly in the user interface, is uniquely capable ofdemocratizing and popularizing all forms of technology.

When the steering wheel replaced the tiller on the automobile ithelped open up driving to the masses. The development of boththe GUI and the mouse transformed the PC from business toolinto a global, mass-market consumer product28. The push-button’sreplacement of the dial on the telephone transformed the processof making a call. In much the same way, innovative user interfacesshould continue to expand markets.

Any manufacturer developing new devices, or any retailerrequesting new products, should always be looking out for radicalbreakthroughs in design that may help to open up a product to anew, often wider, set of customers.

Simplifying the user interface can grow revenue. Mobile operators’success in dominating the voice market has been driven at least inpart by the call and contact management user-interfaces commonto mobile phones, which are generally far superior to those forfixed phones.29. Conversely, mobile consumers’ reluctance to usedata services has often been blamed on the complexity of the datauser-interface30. Thus targeted innovation in this area could have aconsiderable positive impact on operator income.

Technology companies should design with simplicity from theground up, rather than trying to simplify complex products. Indoing so, companies should consider challenging widespreadassumptions and existing design norms. Certain products, fromvideo cameras to certain implementations of ERP software, havebecome unnecessarily complex and unusable, due to theincomprehensibility of their user interface.

A fresh start may be more productive than an attempt atsimplifying the existing products. Engineers, who live and breathetechnology, can too often become disconnected from the real-world ability of consumers. Increasing the role of sales, marketingand customer research teams in signing off new product designcould help to overcome such issues. Some have even suggestedreducing product development timeframes, to lessen theopportunity for creeping complexity.31

Artificial intelligence, which can anticipate instructions, may alsohelp to reduce underlying complexity and improve the overall userexperience. For example, predictive text messaging, whichsimplifies and accelerates the writing of text messages byanticipating the word being typed has boosted usage. One studyshowed a 60 percent growth in messages sent from predictive texttechnology32.

Finally, there may always be consumers for whom no userinterface is sufficiently simple. This market segment customarilyrelies on children or friends to provide technical support ondemand. Some members of this ad hoc support group may valuethe outsourced provision of such advice, which could be provided,via phone or the Internet, to their parents or friends. Thus withevery digital camera, navigation system, webcam, PVR, home hubor other device sold could be the offer of a competitively-pricedsubscription to outsourced technical support.

As the number of technology-based devices grows, and the digitalhome nears reality, the after-sales support market could wellbecome increasingly important. Already in the United States, onecompany providing ad hoc support for the technically challengedhas become a billion dollar, stand-alone business33.


9


The steadily falling price of digital storage is one of the key driversof change in the TMT sectors34. It has enabled the dominance ofthe digital camera. It has catalyzed the rise of the MP3 player, ableto hold up to several days’ worth of music, as opposed to the 75minutes typically contained on a compact disc. It has made thedigitization of thousands of hours of television and radio outputcommercially feasible.

In short, digital storage has had a profound effect on bothconsumer and business behavior. Paper, prints, negatives and tapeshave been marginalized or made redundant by digital storagesolutions and media whose lifespan is perceived as limitless.

However in 2007, consumers and businesses may start to worryabout some of the various indirect costs of digital storage, ratherthan just celebrating its seemingly endless price deflation.

Consumers may become more aware of the fragility of digital data,both physical and online. A quarter of all computer users havealready lost important data including files, photos, movies andmusic, most commonly to hard-drive crashes, even though over halfof them claim to back-up their files regularly35. Budding amateurphotographers may find themselves unable to retrieve photosstored on physical media whose infinite lifespan falls short ofexpectations36. Many more consumers may start to realize CDs andDVDs have a highly variable, sometimes unpredictable lifespan,varying from six months to 100 years37.

New legislation, driven in part by the increase in digitization, mayforce companies to store increasing quantities of digital data, goingback many years. Since December 2006, US federal courts have hada new law concerning electronic discovery, the practice of producingthe right electronic documents in response to litigation. This affectsall data stores, whether on servers or on employees’ MP3 players.For one multinational, this could mean storing vast amounts ofdata, equivalent to 25 times that held in the US Library ofCongress38. Already, the average installed capacity in the Fortune1000 organizations has jumped from 198 terabytes in early 2005 to680 terabytes in October 200639, driven partly by overall businessexpansion, and partly by the need for compliance.

There is a growing volume of data stored. Because of its perceivedand real value, and the widespread realization that few forms ofphysical digital storage are entirely permanent, a growing range ofservices is likely to become available to consumers and businesses toprotect their data. Back ups, insurance, deduplication and anti-virussoftware may all become increasingly popular to maintain theintegrity and efficiency of digitally stored data.

Technology companies should seek to exploit this opportunity in2007, not least because public awareness about storage is likely torise rapidly as a number of big-name brands start to promote onlinestorage services40.

Both consumers and businesses should also start understanding thatthe full cost of digital storage, may be more than just the face valueof a hard drive, memory stick or disk.

Bottom lineWhile the unit price of memory continues to plummet, the fullcost needs to be better understood, by consumers and businessusers as well as by potential solutions providers.

Businesses should factor in the ancillary costs of storage whenbuilding the case for digitizing data that was previously held onpaper. The cost of hardware may be as little as 10 percent of thetotal cost of ownership of any given digital storage solution41.In addition to hardware costs businesses should also factor in:labor costs, for formatting and partitioning disks; anti-virussoftware to protect data; search software to make the dataaccessible; the physical costs of housing and cooling servers42.As over 90 percent of the world’s digital data is thought to bestored magnetically43, on tapes and disks, the costs associatedwith securely storing files that are already in digital format arealso likely to rise.

The technology industry should be alert to the manyopportunities that growing insecurity about storage representsand respond with an array of back ups, recovery services andinsurance that can calm increasingly nervous minds. Whiletechnology is likely to provide appropriate solutions for themajority of consumers and business customers, storage solutionproviders should not shy away from employing old-schoolapproaches. A mixture of both high and low-tech storagesolutions is likely to be necessary to satisfy customers’ needsfully, and to provide genuinely permanent storage solutions.

Consumers should also be encouraged to change their storagehabits and patterns of behavior. Backing up and recopying filesto newer, higher quality disks, should become far morewidespread if the longevity and integrity of the data is to bemaintained. Consumers may also have to start consideringmultiple levels of storage, on the device, on physical media andonline. Though this implies greater cost, it also likely impliespeace of mind and a more effective storage solution.

Heeding the hidden costs of storage


10


Security is one of society’s perennial concerns. Governments needto protect their borders; companies need to safeguard theirincreasingly digital assets; individuals want to feel safe in theirhomes; everyone wants to hold on to their money; everyone wantstheir identity to remain unique. Around the world, a laptopcomputer is stolen every 53 seconds44; a mobile phone is stolenevery 12 seconds in the United Kingdom45 and identity theft isrising46.

Historically a combination of passwords, PINs, signatures and keyshave been the principal means of providing security. Each has itsflaws. All can be lost, copied, or otherwise compromised.

Biometric-based security, whereby a physical characteristic of theindividual is used as the key, is well known, albeit mostly fromscience fiction movies. The iris, the fingerprint, palm veins, voice andhand geometry are all individual to a person and can be used toverify identity. In the past, biometrics has largely failed to make thetransition from the silver screen to everyday life. But 2007 could seea major uptake in the adoption of biometrics for a large range ofapplications, driven by falling prices, the rising performance of keytechnologies such as processors and digital storage, and a growingpublic willingness to pay more for biometric security47.

Biometric deployments are likely to be small scale initially, securing abuilding or a home, for example. Wholesale replacement of, say, anATM network may be too costly to undertake in one go. This wouldrequire not just a new network of thousands of machines, but alsothe lengthy process of obtaining biometric information for everycustomer. Offering a biometric ATM to customers alongsideconventional machines is a more likely approach to be taken48.

Teething problems with biometrics are likely. While suchtechnologies are constantly improving, many are still flawed.Though iris-recognition technology is reliable enough to distinguishbetween monozygotic twins sharing the same DNA49, fingerprintscanning can be disrupted by dirt and dust.

Biometric recognition is also likely to be driven by governmentmandate, for example that all passports or identity cards mustinclude biometric data50. Brazil has had biometric identity cards sincethe turn of the decade. In May 2005, Germany approved theimplementation of the ePass, a passport which may eventually holdbiometric data about faces, fingerprints and irises51. While somecitizens may be unsettled by such moves, this could be a boon forthe biometric industry, lowering unit prices for all, and making awider range of applications feasible.

The appeal of biometrics to the public is likely to be boosted by arange of factors. Initial suspicion is likely to give way to favor, onceindividuals feel more secure and are able to speed throughpreviously tedious processes, from clearing passport control towithdrawing cash from a hole-in-the-wall.

By the end of 2007 the deployment of biometric technologies mayallow a small but growing minority to enjoy the benefits of sciencefiction in the present.

Bottom lineThe growing value of property, both physical and digital, is likelyto make the case for biometrics increasingly strong.

The general public’s lack of familiarity with biometric security is,however, likely to cause some initial resistance. An imperativefor the industry should therefore be to publicize the generalbenefits of biometrics, which are likely to be most visible interms of time and money savings. Indeed one day, biometricscould mean that forgetting one’s passport on the way to theairport no longer matters.

As the use of biometric technologies grows, there is likely to be a corresponding increase in attempts to subvert them52.Any company deploying or supplying biometric solutions willneed to keep a close eye on anti-biometric techniques beingdeveloped, and suppress vulnerabilities as they becomeapparent53.

Biometric approaches should also be standardized as far aspossible, to make global schemes more feasible. A key enablerof global chip and pin security is the use of a standard password– a four digit code. If biometric security is going to be usedglobally to validate financial transactions, there needs to beagreement about which biometric data is used and how it ispresented54.

Finally, the industry should also establish back-up solutions inthe event of biometric systems failing. It would be unfortunate if consumers were to be locked out of their own homes orbusiness executives were unable to access their own files shouldthe database of permitted fingerprints controlling access getcorrupted. This may increase the cost of biometric solutions, but is likely to be necessary to ensure user confidence.

The business case for biometrics

The growing value of property,both physical and digital, islikely to make the case forbiometrics increasingly strong.


11


Offering services for free has become a mainstay of the technologyindustry, and a marketing tool of choice for growing market share.But free offers may become increasingly costly, both to suppliersand consumers, during the course of 2007.

Free services and applications already have a great deal to answerfor. Spam is expected to represent over 95 percent of all emails sentin 200655 – over 60 billion messages each day56. For many, Spam notonly represents a painful nuisance, but may also ultimately representthe death of email as we know it if the volume of Spam becomesuntenable57. Free email also allows viruses, worms, spyware andother malicious code to be carried gratis to millions of unwittingrecipients. Free though the service may be, it is estimated to havecost consumers some $7.8 billion to repair or replace infected PCsduring 2005 and 200658. By contrast, paid-for SMS services, onwhich consumers spent over $185 billion in 2006 alone59, wererelatively junk-free, most likely because the economics of Spamsimply do not work in such a highly commercial setting.

IM has suffered a similar fate. Spam via IM platforms, sometimesreferred to as Spim, is growing in line with the increasing popularityof IM generally. There are now over 80 million users of freeIM platforms on the Web60, and between them, they endured over1.2 billion Spim messages in 200661. The average IM user can expectto be interrupted with instant junk messages about five times a day,and those interruptions are likely to grow to 27 times a day by200862. Between five and eight percent of the messages received bycorporate IM users, who are growing rapidly in number, areclassified as Spim. This disrupts work, reduces productivity andincreases the risk of infection from viruses, which can also be carriedvia IM63.

The cost of free Internet VoIP services is also rising. Not only areconsumers increasingly aware that free VoIP is only as free as thecost of a broadband connection and the termination chargesassociated with off-net calls, but also, they are becomingincreasingly annoyed by the voice version of Spam and Spim,charmingly referred to as Spit. With Spit, spammers turn to VoIPsystems to send thousands of voice messages, selling the usual raftof questionable products and services, to unsuspecting users64.

Similarly, Open Source software is perceived to be free. But whenthe cost of installation, maintenance and customization are factoredin, the total cost of ownership can in fact be substantial. And ifsomething goes wrong with an Open Source solution that is basedupon the contributions of many small companies, the collectivesuppliers may have too little capital to be able either to engineertheir way out of the problem, or to pay compensation.

2007, therefore, is likely to see growing skepticism with regard tothe ‘free’ offer. And perhaps more importantly, the year may alsosee consumers and enterprise customers expressing a growingwillingness to pay for services, in return for solutions that insulatethem from the perils of the free-technology world. Rising to thischallenge could become a key focus for technology companies inthe coming year.

Bottom lineWhile the lure of free offers can be appropriate, for example fornascent products and services looking to build traction, theindustry should be wary of making consumers increasinglycynical, or, indeed of, permitting the cynical to subvert anapplication, as has happened with email in the form of Spam.

Technology companies should not assume that customers arefocused only on price. Quality can also be very persuasive; usefulfeatures can generate premium revenues.

For example, there is a growing market for paid-for emailsolutions that include advanced Spam filtering, virus protectionand quarantine functions, delivery guarantees and end-to-endencryption. By creating different tiers of such services, it mayeven be possible to persuade regular consumers to pay amodest premium to secure their communications and toguarantee an arrival time65.

In the voice market there is potentially enormous value to becreated through the development of premium services thatexploit the superior capabilities of VoIP, in terms of quality andfidelity, as well as protecting users from Spim and other threats.

Many consumers and business users have come to realize thatfree rarely means free, and more often than not, free involvesmaking a number of uncomfortable compromises. Indeed, thediscomfort associated with these compromises can be turnedinto revenue.

The rising cost of free technology

Free services and applicationsalready have a great deal toanswer for. Spam is expected torepresent over 95 percent of allemails sent in 2006.


Tax leakage is a problem for every exchequer. But Europe’s tax lossesfrom carousel fraud are so vast (as much as $66.6 billion a year),that its ramifications in 2007 are likely to be global66. Everytechnology company operating within or selling into the Europeancommunity may have to alter its supply chain, adjust transportationlogistics and review delivery methodologies in response to newlegislation introduced by state governments within the EuropeanUnion to suppress carousel fraud.

Carousel fraud – or MTIC – is based around the theft of VATpayments claimed from national governments. It exists in theEuropean Union as exporters are able to claim VAT refunds whileimporters are responsible for collecting VAT from their customersand passing this on to the tax authority. Fraudsters collect refundswhile holding onto VAT owed to the government.

This is known as carousel fraud as the same goods are oftenrepeatedly exported, sometimes circling between the same twocountries. Technological products such as semiconductors andmobile phones are the favored goods in carousel fraud due to theirhigh value. A vanload can be worth hundreds of thousands ofdollars. At a national level, the impact of carousel fraud has beenimmense. It is estimated to represent 10 percent of the UnitedKingdom’s exports and as much as $9.8 billion in tax losses67; it alsorepresents two percent of Germany’s VAT68.

The 25 member states of the European Union are expected tointroduce country-specific legislation designed to counter carouselfraud in 2007. This follows the introduction of new laws in one ortwo European nations in 2006.

These measures are likely to present several challenges fortechnology companies. The laws may not be uniform. The scope ofgoods affected by legislation could vary by country. For example,Latvia’s derogation was requested only for timber. Other countriesmay not follow suit. The taxable status of goods may vary accordingto the type of sale. Business-to-business transactions may be free ofVAT; whereas the same product would probably be sold to aconsumer with VAT added on.

Bottom lineAny technology company selling into Europe should keep awareof legislative developments in the European Union aroundcarousel fraud. Technology companies that sell into ormanufacture within European borders see many attractions inthis market. Management should formulate strategies forcombating carousel fraud if they are to continue to reap thebenefits of trading in this region.

As legislation is likely to vary by country, technology companiesshould set up teams to track variations in approach, scope andtiming. Firms should also consider upgrading ERP systems to beable to deal with the likely variable taxable status of their goods.

Technology companies may also consider taking steps, inconjunction with the European VAT authorities, to reduce thepotential for carousel fraud. For example, companies couldintroduce safeguards, such as secure RFID tags, that wouldprovide unique identifiers for any consignment of technology,thus making its import and export more difficult. Any suchmove would best be undertaken in a co-ordinated manner toensure that similar RFID standards were being used in allcountries.

The regional carousel with a global impact

12


Technological products such assemiconductors and mobilephones are the favored goodsin carousel fraud due to theirhigh value.


13


This year, as in most years past, many companies will investconsiderable time and money seeking out the next hot technology.The reality, however, is that the technologies that are likely to grabtomorrow’s headlines may well already exist today. Indeed thesetechnologies may have existed, albeit in a less mature format, formany years.

In general, technology changes little within a year. But cumulativechanges over the course of a few years can be fundamental. Themajority of today’s most significant technologies, from wirelessnetworking to solid-state storage, have been evolving for a decade,at the very least.

For example, the first recorded wireless transmission, by NikolaTesla69, took place at the end of the 19th Century. At the start of the21st Century, wireless technologies are still evolving and are likely tocontinue so for many years to come. The same can be said ofpacket transmission, the foundation of the Internet; and processors,the engines of technology.

Importantly, some of the most fundamental innovations intechnology may have little to do with the technology itself.Combinations of technologies are often more powerful than singletechnologies and innovations on their own. The MP3 player is thecombination of compression technology, digital memory, andprocessors. Each of these has existed independently for decades;however it was not until a few years ago that the maturity of eachrepresented a persuasive combination that was ripe forcommercialization.

Similarly, technological context will likely play an important role.2007 may see the emergence of apparently brand new technology-based products and services, when all that has changed, in fact, istheir technical setting and perhaps branding. Social networking, oneof the most talked about new media phenomena of 2006, has beengoing on for many years, ever since the Internet existed. Socialnetworking evolved from Internet-based communities of interestcalled Usenets70 and was originally dominated by technologyaficionados, a group that would generally be regarded as being onthe wrong side of fashionable. But with the growth in broadbandpenetration, as well as digital cameras and higher performanceprocessors, Usenets have evolved into social networking, a mass-market, leisure and entertainment activity.

Bottom lineTechnology companies, entrepreneurs and financiers looking forthe next big technology should, among other activities, trackthe evolution of existing and fundamental technologies, andconsider what could come out of combinations of these.

Creativity and co-operation are likely to be key. Many of thetechnologies that form fundamental components of today’smass-market products were originally developed by theacademic community, and their commercial potential was notoften widely explored. MP3 technology is a good example,having originally been developed as part of an EU-fundedproject examining the technologies required to deliver DAB.Its full potential was not realized until technology companiesworked with academic partners and applied it within analtogether different context - the Internet.

The process of combining technologies should be driven byconsumer needs. Companies should look for unsatisfiedconsumer demand and see how existing or underexploitedtechnologies can fill the gap, rather than experimenting withcombinations in a vacuum. It could be all too easy to createcontrived and irrelevant products, driven only by the capabilitiesof technologies and engineers’ whims. To keep such activitiesfocused, sales and marketing teams should play a key role.

History predicts technology’s future

Some of the most fundamentalinnovations in technology mayhave little to do with thetechnology itself.


Social networks are a reinvented form of the bulletin board, apreviously unfashionable form of Web-based communication muchloved by the technology and scientific communities. The originalbulletin boards served as a means for professionals and enthusiaststo exchange ideas and request help on projects. Though their usewas niche, the impact of bulletin boards was significant. Much oftoday’s software is founded on the ideas and exchanges posted onbulletin boards.

But the bulletin board was not designed as a commercial endeavor.So it is perhaps ironic that 2007 should see the youth-oriented,headline-hogging, rebranded bulletin board offer a significantcommercial opportunity to the technology sector, under the guiseof social networking.

Social networking has been a major success. It has generatedhundreds of millions of dollars in both realized71 and perceivedvalue72. In 2007, its value may be measurable in billions of dollars.But such success creates challenges, which technology companiesshould be well positioned to address through 2007 and beyond.

One of the most significant challenges awaiting media companiesis dealing appropriately with the posting of copyright-protectedmaterial on social networking sites. Unfortunately a proportion ofcontent posted on these sites has effectively been stolen frommedia companies. Until now, media companies have tended not tolitigate against social networking sites for infringement as in manycases there was too little capital for which to sue73. However in2007 the rising value of social networking companies, or thesubstantial capital of the parent corporations that own them, maymake social networks worth pursuing74. Technological solutions mayprovide the answer to this problem. Technology that can searchthrough all uploaded content, including the copyrighted music thataccompanies user-generated video, is perhaps the only solution forreducing the risk of litigation through searching, identifying andremoving copyright material75.

Doing so may also help social-networking companies preserve theintegrity of their business models. Advertisers, likely to be one of themain components of the social networking business model, areunlikely to want their advertisement placed next to stolen content.

Technology companies may also be able to address anotherchallenge of social networks’ success: the vast, rapidly growingquantity of content posted. Unlike the text-centered bulletin boardsof yesterday, successful components of today’s social networksinclude the ability to post content quickly, a means of fast andbroad distribution, to perhaps millions of users simultaneously,effective search tools and a simple and elegant user interface.All these challenges are likely to be compounded in 2007, as thevolume of users and content continues to grow. All the uploadedcontent requires storage. While this is getting cheaper, there aremultiple costs associated with digital storage: commissioning,maintaining, partitioning and housing. The accountants also needto be kept happy.

Social networking has enjoyed a rapid period of unrestrictedgrowth, which is likely to continue into 2007. But the focus oncoping with expansion has caused some social networks to overlookthe need for efficiency, robustness and compliance. In 2007 socialnetworks are likely to have to address these issues.

Technology’s social network dividend

14


Bottom lineHelping social networking companies to mature, rapidly andrationally, could represent a substantial platform for growth fortechnology companies in 2007.

Social-networking companies face multiple challenges:They must cope with increasingly large volumes of contentand become adept at identifying illicit material and duplicatedcontent, while also serving advertisers. Inappropriate materialincludes not just that which infringes copyright, but also thatwhich is racially offensive, sexually explicit or otherwiseunsuitable.

Technology companies should also provide solutions thatimprove social networks’ ability to monetize their principal asset:millions of customer relationships. This could be achievedthrough a number of means. They could help to enhance theoverall customer experience by providing faster uploading andmore rapid and accurate description and coding of content.Chat, messaging, VoIP and other relevant applications couldwiden the appeal of the core offering, and deliver the potentialfor fee-generating services.

Accurate tracking of consumer behavior in response toadvertising could increase a social network’s ability to sell spots.Advertisers are likely to appreciate technology that placed theiradverts only next to appropriate content.

Finally, technology that could monitor the downloading of user-generated content featuring copyrighted material would enableprofit-sharing deals to be done with content owners.


15



One glance at any large city street, teeming with people rangingfrom college students to business professionals, explains why thevolume of portable electronic devices in use in the world isincreasing exponentially. But all devices, whether mobile phones,laptop computers or remote sensors, have one common,fundamental Achilles’ heel: their portable power supplies. Over $31 billion is spent every year on disposable dry-cell batteries76;$6 billion is spent on spare, rechargeable batteries; and over abillion rechargeable batteries are included with the sale of off-the-shelf electronic devices.

This represents both a significant financial cost as well as a majorenvironmental impact. A large proportion of the batteries used inconsumer electronics products end up in landfill sites77, in spite ofthe fact that in many countries they are classified as hazardouswaste. The trickle-charger supplied with most consumer electronicsdevices may seem innocuous: a mobile-phone charger consumesthree watts, a fraction of the power consumption of a light bulb.But considering there are some two billion mobile phones in useand that a mains connected charger consumes power regardless ofwhether a device is connected or not, the full environmental impactof the trickle charger becomes apparent78.

While both disposable and rechargeable battery technologies haveimproved significantly in recent years, they have not kept up withMoore’s Law79, and progress in battery technology has steadily fallenbehind the growing power and falling cost of processors. With thepromise of the fuel cell still some way off, as well as the growingclamor for reductions in carbon footprints, technology companies maywell start exploring alternative means of keeping devices powered.

One of the most interesting techniques likely to find favor in 2007is power-scavenging. This involves devices that are able to generateenergy from a variety of sources in their immediate environmentincluding, sunlight, changes in temperature, vibration, motion,sounds and pressure. Power-scavenging technologies couldtransform the way we use consumer electronic devices. It could alsomake billions of remotely located, independently powered,telematic and sensing devices feasible, with a knock-on impact onthe supply chain and other key processes.

Power-scavenging technologies are most actively being used atpresent in RFID tags and remote sensing technologies, as thesesmall-scale devices have limited and often temporary80 powerrequirements. Parasitic power can make some applications feasible,such as remote temperature monitoring in forested regions, as itremoves the need to replace batteries. Other applications that couldbe enabled via power-scavenging technology in 2007 include:supply-chain automation and monitoring, transportation andlogistics management, military and civil surveillance, pipelinemonitoring, healthcare and patient monitoring, as well asenvironment and wildlife tracking, among others.

In 2007 power-scavenging technologies may also start to find theirway into consumer products. This would benefit both consumers,who should be able to make more extended use of their devices,and the environment.

Bottom line Power-scavenging technologies are not new. Some have beenaround for decades. Industrial-scale scavenging technologiessuch as wind turbines, solar panels and wave-power generatorshave become a credible means of supplementing coal-fired ornuclear power plants, and their use is growing rapidly. But 2007is likely to see power-scavenging technologies used on a smallerscale, and with far wider implications.

The transformational impact of power scavenging is tantalizingand wide ranging. But technology companies should focus onusing the technology to solve practical problems. The ability todeploy completely autonomous remote sensors could conferenormous benefits on just about every type of productionsystem, from oil and gas through agriculture. Cost will likely bethe most important factor. RFID has taken off much more slowlythan anticipated because the price per tag has remained toohigh82. As the range and diversity of remote sensors grows,power scavenging should be used as a means of keeping thetotal cost of ownership and usage to a minimum.

In consumer markets, technology companies will most likelyneed to follow a similar approach to that of the auto industry,where hybrid power systems are becoming increasingly popular.The use of multiple scavenging technologies in combinationwith a regular rechargeable battery could extend autonomysubstantially, and reduce overall operating costs. Frompiezoelectric energy converters replacing buttons and keys tokinetic energy converters embedded into any portable device,there is likely to be enormous scope for power-scavengingtechnologies, the use of which may even allow technologycompanies to charge a premium.

In parallel, technology companies should continue to invest indeveloping components and devices that are far less power-hungry. Progress is certainly being made, such as the movefrom hard disks to solid-state memory, the use of low-powerprocessors and more efficient display technologies, such asOLED. But there is scope for much further improvement.Despecifying devices, by removing unused or unnecessarycomponents could further help to reduce consumption, andmay have the added benefits of reducing costs and makingproducts easier for consumers to use.

Parasitic power to the people

16


While remaining primarily dependent on a regular rechargeablebattery, a mobile phone incorporating power-scavenging technologycould potentially last for much longer without a recharge, simplyby accumulating battery charge as it is being carried around.Wristwatches already use the body’s kinetic energy to top upintegrated batteries81. Ambient light could be used as anothersupplementary energy source.

Given consumers’ growing concerns about the environment, as wellas their constant frustration with the battery-life of the productsthey use, power-scavenging could become an important newingredient in the consumer electronics sector.


17


Technology has had a fundamental influence on the humancondition ever since our ancestors sharpened their first flints. Todaytechnology remains at the forefront of the evolution of humanexistence.

In 2007, combinations of humans and technology are likely to betaken to new levels, addressing a widening range of applications,tasks and challenges. One of the most interesting applications oftechnology in 2007 may be the increasing enhancement of thehuman body using technology.

To an extent, this already happens, chiefly for medical purposes,with technology replacing failed or deficient body parts, such aships or hearts.

But technology, enabled by many streams of research anddevelopment, may increasingly be used to improve upon the defaultbody. For example, artificial exoskeletons could be used to providesuper-human walking ability, with enhanced range, superiorstrength, or both83. Advances in materials, storage, energytechnology and processing power are all key enablers of such anenhancement.

Technology is also likely to continue blurring the line betweendisabled and able-bodied athletes. 2007 could be the year in whichdisabled athletes, using prosthetics, are able to qualify for world-class, athletics events, which have historically consisted solely ofable-bodied athletes. Advances in human-neural interfaces and theavailability of electronic knees, guided by microprocessorsgenerating 1000 recalibrations a second, are allowing disabledathletes to approach record speeds84. In 2004, the best disabledathlete was only 2.5 seconds off what was then the world recordspeed of 19.32 seconds for the 200-meter sprint85.

Technology can also improve one of the body’s fundamentals –blood. Artificial red blood cells have already been designed; whiteblood cells are being developed. Artificial red blood cells, based onnanotechnology, could be up to 200 times more efficient thanhuman blood cells at their core function: storing and releasingoxygen86. Indeed these may be so efficient that replacing just10 percent of all red blood cells could allow people to hold theirbreath for hours87.

So in 2007, the erstwhile science fiction of the bionic man orwoman may now become reality, although the underlying R&D mayultimately cost a little more than six million dollars.

Bottom lineTo date, technology has done wonders for the human condition:extending life, curing diseases and enhancing quality of life.The human race is now at a crossroads where technology isadvanced enough to not only save lives, but to modify andpersonalize the human body beyond pure medical reasons.

These developments are raising medical, ethical and religiousquestions. The use of technology to enhance the human is likelyto evoke a wide range of reactions, ranging from unbridledexcitement to terror88.

Like any new, cutting-edge technology, new companies arestarting up, new business models are being created, and newopportunities are being explored. Naturally, new regulation maywell also be required. 2007 is likely to witness only the start ofthe debate.

Governments and industry should actively and openly discussthe issue of enhancing the human being, with particular regardto both relevant precedents and potential consequences.How dissimilar, from an ethical perspective, is an enhancedheart to a surgically perfected nose? Could human-enhancingtechnological developments trigger an arms race, based aroundcreating the perfect soldier? How would social security andwelfare provisions have to change if average mortality rose to150 years or more89? These, together with many other questionsshould be debated in open forums. At the same time, thegeneral public should be kept informed and involved, to allowindividuals to make rational and appropriate decisions.

2007 may be the year in which the origin of the species starts todepend less on the lumbering process of natural selection, andmore on the rapid-fire innovations taking place in the world’slaboratories. The evolution of evolution may have begun.

Arise, the bionic human

2007 may be the year in whichthe evolution of evolutionbegan.


1 For example see: Business Leader Backs Carbon Tax, ABC’s The World Today, 31 October 2006. http://www.abc.net.au/worldtoday/content/2006/s1777847.htmand ‘Carbon Footprint’ Gaining Business Attention, Conference Board, 18 October 2006

2 Stern Review on the Economics of Climate Change, Her Majesty’s Treasury, 30 October2006. For more information see: http://www.hm-treasury.gov.uk/independent_reviews/stern_review_economics_climate_change/sternreview_index.cfm

3 See: Rebuttal to Testimony on “Kyoto and the Internet: the Energy Implications of theDigital Economy”, 2 February 2000

4 See: http://www.cit.cornell.edu/helpdesk/win/modem/digital_lines.html

5 First butter, now mobiles, Financial Times, 20 September 2006

6 http://earthtrends.wri.org/features/view_feature.php?theme=3&fid=66

7 Behold the server farm! Glorious temple of the information age! Fortune Magazine,1 August 2006

8 Ibid

9 For more information see:http://www.cisco.com/en/US/products/ps7060/products_category_technologies_overview.html; for analysis, see: Cisco unveils telepresence push, Vnunet.com,23 October 2006

10 http://www.cisco.com/web/about/ac123/iqmagazine/archives/q2_2006/SUB_Recipe_for_Success.html

11 Now Google sets sights on solar system. All it’s searching for this time is a 1.6-megawattpower source that is simply out of this world, San Francisco Chronicle, 17 October 2006

12 As an example of one approach to making device energy consumption more visible, see:Bringing meters out of the closet, BBC News, 18 May 2006

13 For example see: Sun, Power Company to Offer Rebates on Servers, eWeek, 15 August2006

14 For an example of the impact of the use of composite materials on fuel efficiency inaviation, see: http://www.house.gov/transportation/aviation/02-15-06/02-15-06memo.html

15 The rise of the green building, The Economist, 2 December 2004

16 Mobile Solution Helps Credit Hire Car Service Eliminate 120,000 paper forms a month,Microsoft. In this example, fuel consumption for 500 drivers fell by 2.5 million miles peryear.

17 Consumers struggle with tech, CRN, 9 March 2006

18 Ibid

19 A fast rate of return, Christian Science Monitor, 15 May 2006

20 Humanizing the digital experience, Forrester Research Inc, 20 November 2006

21 Thanks To Active Safety Systems, You Won’t Buy It If You Don’t Brake, Electronic Design,6 November 2006

22 The Nintendo Wii digital gaming console uses a controller that employs motion sensors asthe primary input for gameplay, as opposed to buttons. See: Nintendo Wii, ABC News,13 November 2006

23 Smarter than your average pushbutton, Machine Design, 6 July 2006

24 The voice business market outlook, Business Insights, January 2006

25 High-End, Voice-Enabled Tech from IBM Powers Pioneer Navigation Systems for Most Cars,IBM.com, 25 October 2006

26 Voice recognition coming to TV, CNET News, 16 February 2006

27 Apple’s ‘touchless’ touchscreen iPod revealed, Mac Daily News, 25 July 2006

28 We’re all Mac users now, Wired, 6 January 2004

29 Voice – a vision of the future, Ovum, 16 March 2006

30 In mobility wars, wireless providers believe simpler is better, Associated Press, 18 May 2006

31 See interview with Rich Miner, Convergence Conversations, DTT, November 2006

32 Unique research about the sending of messages and T9 by cell phone is presented atFuturecom 2006, Tegic.com, 3 October 2006

33 Best Buy’s Geek Squad Optimizing in 2007, Forbes, 13 March 2006

34 As an example, over the course of the year though October 2006, the cost of a onegigabyte compact flash card has fallen from about $50 to as little as $10 with rebate.Back up photos on the road, Macworld, October 2006

35 Don’t keep all your data in one stash, New York Times, 7 September 2006

36 Storage: An editorial, The Online Photographer, 15 June 2006

37 Preserving your digital data requires high and low-tech solutions, USA Today, 30 January 2004

38 The legal danger lurking in the server, Financial Times, 9 November 2006

39 The Info Pro Storage Study Wave 8, The Info Pro, 13 October 2006

40 Don’t keep all your data in one stash, New York Times, 7 September 2006

41 Technology Watch Report: the large-scale archival storage of digital objects,Digital Preservation Coalition, February 2005

42 Ibid

43 Ibid

44 Don’t lose your business to criminals, Silicon Republic, 24 August 2006

45 Mobile stolen every 12 seconds, The Guardian, 16 May 2006

46 ID theft losses rising, Red Herring, 4 May 2006

47 Nationwide survey on fingerprint biometrics, Mobility Today, 8 December 2004

48 For information on biometric ATMs, see:http://www.fujitsu.com/downloads/GLOBAL/labs/papers/palmvein.pdf

49 See: http://certificadora.com/es/biometria.htm

50 For example see: US imposes biometric entry demand, BBC news, 26 October 2006

51 See: Germany to phase-in biometric passports from November 2005 , IDABC,http://europa.eu.int/idabc/en/document/4338/194

52 How to hack biometrics, The Inquirer, 30 July 2005

53 Biometrics firms seek to foil fraudsters, CNET News.com, 22 June 2006

54 Facing biometrics’ limits, CNET News.com, June 22, 2006 and Can biometrics movebeyond borders? CNET News.com, 25 October 2005

55 Spam approaches 95 percent of all email, Vnunet.com, 7 September 2005

56 60 billion emails each day – much of it spam, MSNBC, 25 April 2006

57 The death of email? Consumer Affairs, 27 July 2006

58 Viruses, Spyware cost users $7.8 billion, Washington Post, 8 August 2006

59 According to Insight Research, global mobile service revenues were expected to be$1.24 trillion in 2006. SMS represents approximately 15 percent of service revenues,which equates to $186 billion. See – Mobile math for marketers, Global Technology Forum,3 October 2006

60 Single Ajax interface for Yahoo mail and IM coming, TechCrunch, 9 November 2006

61 Corporate Spim is no LOL matter, Newsweek, 9 May 2006

62 Ibid

63 Tired of Spam? Now There’s Spim & Spit, Too, Office Space, May 2005, Vol.3 Issue 5,Pages 26-28 in print issue

64 VoIP Security Threats, PC Security News, 30 January 2006

65 Price of Free Internet Mail Might Be Too Costly, Ecommerce Times, 27 January 2006

66 VAT fraud costing Europe €50 billion a year, The Guardian, 11 July 2006

67 VAT villains a threat to Brown’s prudence, The Guardian, 14 August 2006

Notes

18



19


68 Carousel fraud squad poised for arrests, Financial Times, 28 August 2006

69 Source: http://www.scenta.co.uk/music/features.cfm?cit_id=874832&FAArea1=customWidgets.content_view_1

70 Usenets (User Networks) were invented by graduate students Tom Truscott and Jim Ellis atDuke University in 1979. In their first iteration, Usenets were simple bulletin boards towhich users submitted articles, often limited to 60,000 characters in length, via email.Typically their content was scientific and academic, rather than social.

71 Google’s Young Partner, The Economist, 10 October 2006

72 Ibid. See also Social networking fuels new Web boom, CNN, 3 October 2006

73 Could Copyright Fight Strip YouTube of Future Content? ABC News, 30 October 2006

74 Wag of the finger at YouTube, Chicago Sun-Times, 31 October 2006

75 MySpace to install copyright software for music, Financial Times, 31 October 2006

76 The Power of Small Tech, Small Times –http://www.smalltimes.com/articles/article_display.cfm?ARTICLE_ID=267784&p=109

77 lbid

78 Beware of Vampire Appliances, ElectricNet, 12 June 2000

79 See interview with Jim Balsillie, Convergence Conversations, DTT, November 2006

80 Most do not require constant power

81 See Parasitic Power Harvesting in Shoes, Physics and Media Group, MIT, August 1998

82 Benefits from RFID not matching hype, Chicago Business, 18 July 2005

83 For more information see: http://bleex.me.berkeley.edu/walkmachine.htm and Artificialexoskeleton takes the strain, New Scientist, 5 March 2004

84 Building a better leg: The technology of 21st-Century prosthetics, IEEE Spectrum,November 2005

85 Born to Run, IEEE Spectrum, November 2005

86 See: Microbivores: Artificial Mechanical Phagocytes, IMM Report Number 25:Nanomedicine, 2001, available at: http://www.imm.org/Reports/Rep025.html

87 While the artificial human blood cell is still a blueprint, they already exist for animals.Scientists have cured diabetes in rats using artificial cells containing remedial enzymes,the dimension of a blood cell (see: Our Bodies, Our Technologies, Ray Kurzweil’sCambridge Forum Lecture, 2006) This has been made possible by advances: inbiotechnology, molecular biology, nanotechnology and polymer chemistry (seeTherapeutic applications of polymeric artificial cells, nature reviews, March 2005,available at: http://www.medicine.mcgill.ca/artcell/2005NatureRev.pdf)

88 The world’s most dangerous ideas, Foreign Policy, 1 September 2004

89 The new incredibles – enhanced humans, New Scientist, 13 May 2006



ATM Automated Teller Machine

CRM Customer Relationship Management

DAB Digital Audio Broadcasting

ERP Enterprise Resource Planning

GPS Global Positioning System

GUI Graphical User Interface

IP Internet Protocol

LCD Liquid Crystal Display

MTIC Missing Trader Intra-Community (Fraud)

OLED Organic Light Emitting Diode

PDA Personal Digital Assistant

PIN Personal Identification Number

PVR Personal Video Recorder

R&D Research and Development

RFID Radio Frequency Identification

SMS Short Message Service

TMT Technology, Media and Telecommunications

USB Universal Serial Bus

VAT Value Added Tax

VoIP Voice-over-Internet Protocol

“Convergence Conversations”, Deloitte Touche Tohmatsu

“Global trends in venture capital 2006 survey”, Deloitte ToucheTohmatsu

“Turn on to digital: Getting prepared for digital content creationand distribution in 2012”, Deloitte & Touche LLP

“Turn the page: The net benefit of digital publishing”, Deloitte &Touche LLP

“Protecting the digital assets: The 2006 Technology, Media &Telecommunications Security Survey”, Deloitte Touche Tohmatsu

“Eye to the future: How TMT advances could change the way welive in 2010”, Deloitte Touche Tohmatsu

“Strategic Flexibility in media and entertainment: Scenarios, options,action!”, Deloitte Touche Tohmatsu

“TMT Trends: Predictions, 2006 – A focus on the technologysector”, Deloitte Touche Tohmatsu

“TMT Trends: Predictions, 2006 – A focus on the media sector”,Deloitte Touche Tohmatsu

“TMT Trends: Predictions, 2006 – A focus on thetelecommunications sector”, Deloitte Touche Tohmatsu

“Be prepared: Imperatives for TMT executives, 2005-2010”, DeloitteTouche Tohmatsu

“The trillion dollar challenge: Principles for profitable convergence”,Deloitte Touche Tohmatsu

“The hundred year storm: Wireless disruption intelecommunications”, Deloitte Touche Tohmatsu

“Television networks in the 21st century: Growing critical mass in afragmenting world”, Deloitte Touche Tohmatsu

“Getting off the Ground: Why the move to VoIP is a decision for allCXOs”

“Changing China: Will China’s technology standards reshape yourindustry?”, Deloitte Touche Tohmatsu

“Moore’s Law and electronic games: How technology advances willtake electronic games everywhere”, Deloitte Touche Tohmatsu

“Making the offshore call: The road map for communicationsoperators”, Deloitte Touche Tohmatsu

Glossary of technicalterms

Recent thoughtleadership

20


21


Igal BrightmanIsraelGlobal Managing PartnerTechnology, Media & Telecommunications+972 3 608 55 [email protected]

Americas

Contacts at Deloitte Touche Tohmatsu (DTT)and its member firms

Alberto Lopez CarnabucciArgentina+54 11 4320 [email protected]

Marco Antonio Brandao SimurroBrazil+55 11 5186 [email protected]

John RuffoloCanada+1 416 601 [email protected]

Arturo PlattChile+56 2 2703 [email protected]

Elsa Victoria Mena CardonaColombia+ 571 546 [email protected]

Ernesto GraberEcuador+ 593 4 245 2770 ext [email protected]

Francisco SilvaMexico+ 52 55 5080 [email protected]

Edmundo Beltran VillamizarPeru+51 1 211 [email protected]

Phillip AsmundsonUSA, Deloitte & Touche USA LLP+1 203 708 [email protected]

Hector GutierrezVenezuela+ 58 212 206 [email protected]

Gerhard FeuchtmuellerAustria+43 1 537 00 [email protected]

Andre ClaesBelgium+32 2 600 [email protected]

Jiri PolakCentral Europe+420 22 489 [email protected]

Gennady KamyshnikovCIS & Russia+7 495 787 [email protected]

Kim GernerDenmark+45 36 10 20 [email protected]

Tuomo SalmiFinland+358 40 716 [email protected]

Eric MorgainFrance+33 1 5561 [email protected]

Andreas GentnerGermany+49 711 1655 [email protected]

Dieter SchlerethGermany+49 211 8772 [email protected]

Tom CassinIreland+353 1 417 [email protected]

Asher MechlovichIsrael+972 3 608 [email protected]

Alberto DonatoItaly+39 064 780 [email protected]

Dan ArendtLuxembourg+352 451 452 [email protected]

Saba SindahaUnited Arab Emirates+971 (2) 676 [email protected]

Piet Hein MeeterNetherlands+31 20 582 [email protected]

Halvor MoenNorway+47 23 27 97 [email protected]

Carlos FreirePortugal+351 21 042 [email protected]

Danie CrowtherSouth Africa+27 12 482 [email protected]

Eduardo SanzSpain+34 91 514 [email protected]

Tommy MaartenssonSweden+46 8 506 711 [email protected]

Oktay AktolunTurkey+90 212 339 [email protected]

Jolyon BarkerUnited Kingdom+44 20 7007 [email protected]

Paul LeeUnited Kingdom+44 20 7303 [email protected]

David HillAustralia+61 8 8407 [email protected]

Charles YenChina+86 10 8520 [email protected]

N. VenkatramIndia+91 22 6667 [email protected]

Yoshitaka AsaedaJapan+81 3 6213 [email protected]

John BellNew Zealand+64 9 303 [email protected]

Shariq BarmakySingapore+65 6530 [email protected]

Hyun Chul JunSouth Korea+82 2 6676 [email protected]

Clark C. ChenTaiwan+886 2 2545 9988 [email protected]

Europe/Middle East/Africa

Asia Pacific


For more information, please contact

Noel J. Spiegel United StatesDeloitte & Touche LLPPartner in Charge of Global TMT Marketing +1 212 492 4135 [email protected]

Francois Van Der MerweUnited StatesDeloitte & Touche USA LLPDirector of Global TMT Marketing +1 212 436 5203 [email protected]

Hiro Notaney United StatesDeloitte Services LPDirector of North America TMT Marketing+1 408 704 2464 [email protected]

Craig FowlerUnited KingdomDirector of EMEA TMT Marketing +44 20 7303 [email protected]

Steven Dow ChinaDirector of Asia Pacific TMT Marketing +852 2852 5638 [email protected]

DisclaimerThe information contained herein is provided by Deloitte Touche Tohmatsu and is intended to provide generalinformation on a particular subject or subjects and is not an exhaustive treatment of such subject(s). Accordingly, theinformation is not intended to constitute accounting, tax, legal, investment, consulting or other professional advice orservices. The information is not intended to be relied upon as the sole basis for any decision which may affect you oryour business. Before making any decision or taking any action that might affect your personal finances or business,you should consult a qualified professional adviser.

The information contained herein is provided as is, and Deloitte Touche Tohmatsu makes no express or impliedrepresentations or warranties regarding the information contained herein. Without limiting the foregoing, DeloitteTouche Tohmatsu does not warrant that the information contained herein will be error-free or will meet any particularcriteria of performance or quality. Deloitte Touche Tohmatsu expressly disclaims all implied warranties, including,without limitation, warranties of merchantability, title, fitness for a particular purpose, noninfringement, compatibility,security, and accuracy.

Prediction of future events is inherently subject to both known and unknown risks, uncertainties and other factors thatmay cause actual events to vary materially. Your use of the information contained herein is at your own risk and youassume full responsibility and risk of loss resulting from the use thereof. Deloitte Touche Tohmatsu will not be liable forany special, direct, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whetherin an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of theinformation contained herein.

If any of the foregoing is not fully enforceable for any reason, the remainder shall nonetheless continue to apply.

About DeloitteDeloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms, and their respectivesubsidiaries and affiliates. Deloitte Touche Tohmatsu is an organization of member firms around the world devoted toexcellence in providing professional services and advice, focused on client service through a global strategy executedlocally in nearly 140 countries. With access to the deep intellectual capital of approximately 135,000 people worldwide,Deloitte delivers services in four professional areas – audit, tax, consulting and financial advisory services – and servesmore than 80 percent of the world’s largest companies, as well as large national enterprises, public institutions, locallyimportant clients, and successful, fast-growing global growth companies. Services are not provided by the DeloitteTouche Tohmatsu Verein, and, for regulatory and other reasons, certain member firms do not provide services in all fourprofessional areas.

As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any of its member firms has any liability for eachother’s acts or omissions. Each of the member firms is a separate and independent legal entity operating under thenames “Deloitte,” “Deloitte & Touche,” “Deloitte Touche Tohmatsu,” or other related names.

Deloitte Touche Tohmatsu 2007. All rights reserved

Designed and produced by The Creative Studio at Deloitte & Touche LLP, London. 17284B


technology predictions › 2009 › ... · technology predictions tmt trends 2007 the deloitte...

Documents