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2008 predictions: how they fared

A look back at some the forecasts that were made by analysts and industry players over the past year and how these panned out over the year.
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Written by Sol E. Solomon on

Each year inevitably starts with technology pundits laying out expectations of what the new year would bring for various technologies and tech sectors.

ZDNet Asia looks back at some predictions in 2008 to see how the industry observers fared in their forecasts.

1. Open source
The analysts were: Right

Analysts and industry players alike were certain open source would have a significant role in 2008.

While announcing its predictions for 2008, global infocomm technology research house, XMG, said more than 43 percent of large Asia-Pacific companies were " seriously exploring the advantages of open source software", due to the "prohibitive" cost of Microsoft Office products.

Meanwhile, Standish Group noted that open source software was successfully displacing proprietary applications in many large companies and eating into the annual revenues of proprietary software vendors by US$60 billion a year.

According to Standish Group's study, Trends in Open Source, the estimated worldwide spend on open source software is US$1 trillion per year.

Industry player and open source advocate, Sun Microsystems, said the economic slowdown favors open source companies.

Sun's executive vice president of software Rich Green, noted that during an economic slowdown, IT projects will continue to be undertaken, but IT budgets will be reduced. He said companies will then turn to lower cost software options such as open source.

Green's observation was subsequently confirmed in July when a survey by the Open Solutions Alliance (OSA) revealed the sluggish economy was contributing to commercial open source sales.

Most of the companies polled for the study, including independent software vendors (ISVs) and systems integrators, showed a clear increase in sales and services related to open source, the OSA said.

The main factors behind open source adoption were price, according to 79 percent of the respondents, followed by reduced lock-in or access to source codes at 60 percent, and customizability at 52 percent.

2. Green tech
The analysts were: Right

2008 started with some good news for environmentalists.

According to Gartner, changing trends could propel Asian chief information officers (CIOs) to make key decisions in 2008 that include setting targets for green IT.

XMG, too, predicted that understanding green IT was among the top management concerns of Asia-Pacific CIOs in 2008.

These expectations were confirmed by a report released by analyst Datamonitor, that found three-quarters of CIOs surveyed viewed eco-friendly computing as an important part of their IT strategy, with a further 15 percent citing it as their top priority.

Most of the 245 CIOs surveyed for the 2008 Trends to Watch: Green IT study said becoming environment-friendly increasingly makes sense to businesses faced with shrinking budgets, sprawling infrastructure footprints and increased waste-disposal regulations.

As the green momentum continued through the year, another survey of over 1,000 global companies conducted by Forrester Research in October--when the markets were in a downward spiral--found that greener policies and practices for IT organizations were on the rise.

The report noted that 52 percent of respondents were either implementing, or creating, an overall green IT practice.

Forrester also learnt that despite the souring economy, 10 percent of respondents would accelerate their green IT plans, while 38 percent would maintain the pace of such initiatives.

3. Pervasive virtualization
The analysts were: Right

The general consensus among the IT industry at the start of 2008 was an uptake of virtualization would occur during the year.

Springboard Research said in its 2008 Asia Pacific IT Market Predictions study that it expected a ="http: www.zdnetasia.com="" news="" business="" 0,39044229,62035960,00.htm"="" title="Asia unhampered by shaky U.S. economy -- Wednesday, Jan. 02, 2008">growing number of companies to implement virtualization at the server level in 2008, and investments will become increasingly common in the mainstream market. Also, 50 percent of respondents indicated they were "inclined to adopt" virtualization.

A subsequent study by the United Kingdom's National Computing Center (NCC), found that businesses would increasingly turn to virtualization technologies to get more out of their IT assets.

In December, when Springboard looked back at the year, it noted that CIOs and IT managers across the Asia-Pacific region had heavily focused on making the most of existing IT investments in 2008, while during this period, many organizations were busy consolidating their IT systems and infrastructure.

"This, in many ways, was the key factor that drove many of them toward virtualization," Springboard said. "As organizations increasingly focused on cost reductions, improving application performance, energy efficiency, infrastructure consolidation and more easily manageable IT systems, virtualization received more attention from Asian organizations in 2008."

4. Social networking
The analysts were: Right

Most analysts started the year feeling enhanced collaboration and Web 2.0 tools, such as social networking, would be integral components across Asian businesses in 2008.

IDC had predicted that more companies in Asia would create and maintain corporate profiles on social network sites.

According to Gartner, social software technologies would also increasingly be brought into the enterprise to augment traditional collaboration platforms

Access Markets International Partners (AMI-Partners) noted that increasingly, SMBs were turning to social networking sites to connect with other businesses, as a resource for real-time business intelligence, contact and lead generations, and as a medium to improve customer relationships.

Some cold water, however, was splashed on the general upbeat forecast, when a Springboard survey learnt that CIOs in the Asia-Pacific region were still not keen to bring Web 2.0 tools into their organizations.

The study found that over 90 percent of the 470 IT decision-makers polled from Australia, China, India, Malaysia, New Zealand, the Philippines and Singapore, had no plans to use blogs, wikis or social networking tools in the next 12 months.

Regardless, Springboard continued to predict that the lack of interest and awareness from CIOs was set to change.

When the research house reviewed 2008, it noted that consumer-driven social networking in fact had a significant impact on the way employees collaborated within, and outside, the organization during the year.

Springboard said demand for collaboration grew steadily in 2008 across the Asia-Pacific region, with a growing number of businesses in seeking to deploy tools that provide a range of rich, real-time media collaboration capabilities.

5. Outsourcing woes
The analysts were: Wrong

At the start of 2008, most analysts, providers and users were certain outsourcing would enjoy a good year.

XMG said then that it expected continued strong growth in the offshore markets, although it noted turbulence in the sector. The market share for offshoring and outsourcing in the Asia-Pacific region would grow by 30.1 percent, the research firm said.

The sentiment was echoed by a survey of 250 IT professionals conducted by Syntel, an outsourcing and business process outsourcing company. According to the poll, the weak global economy and need for businesses to cut costs would drive outsourcing growth up in 2008.

More than half, or 53 percent, of companies polled planned to increase outsourcing spending in 2008, up from 48 percent in 2007.

While Gartner was similarly upbeat, it predicted a relatively small growth rate of 8.1 percent for global outsourcing, noting that companies were turning toward smaller contracts.

Despite the optimism, as the year wore on, outsourcing companies began to feel the heat.

For example, India's big three outsourcers--Infosys, Tata Consultancy Services and Wipro--experienced slow revenue or income growth for the quarter, ended Jun. 30.

The three outsourcers blamed challenging global economic conditions for the financial dips.

XMG was among the analyst houses that subsequently revised their growth expectations for global offshoring, reducing reduced its forecast from 34.7 percent to 24.2 percent.

6. Smartphones abound
The analysts were: Somewhat wrong

Analysts expected 2008 to be a battleground year for mobile handsets.

With the first phone to run Google's Android operating system and Apple's iPhone 3G set for release ahead in the year, analysts predicted 2008 would be a hard year to beat in mobile growth.

Observers predicted these phones, alongside new devices from handset makers such as Nokia and Research in Motion (RIM), would stimulate the multimedia and converged devices market.

In July, the much-anticipated iPhone 3G was released in 22 countries.

And in October, users got their hands on the first Android phone--the G1, manufactured by HTC.

While smartphones gained popularity in 2008, this did not necessarily translate to good news across phone makers.

According to research firm, Needham & Company, smartphone growth would have slowed to a crawl in the third quarter if not for iPhone sales.

Needham said Apple's iPhone accounted for virtually all sequential growth in the market during the third quarter, which was also when Apple launched the iPhone 3G and sold 6.9 million units.

Rival and manufacturer of BlackBerry mobile devices, RIM, reduced the company's outlook for its fiscal third quarter.

Palm, which makes the Treo, also saw its revenue fall due to "reduced demand for maturing smartphone and handheld products", the vendor said.

In November, Nokia, the world's largest cell phone maker, warned it expected to sell fewer handsets during the fourth quarter of 2008 than it had earlier forecast.

But for Apple, it is all good news, according to market research group NPD, which said the iPhone 3G displaced Motorola's Razr--ranked the top handset for 12 straight quarters--as the most purchased handset among consumers in the third quarter.

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