ITEXPO begins in:   New Coverage :  Asterisk  |  Fax Software  |  SIP Phones  |  Small Cells

Publisher's Outlook
December 2001

Rich Tehrani

It's All Relative


Go Right To: [ San Diego 2001: Best Of Show ]

Did you know that the Diet Coke you just got out of the case is new? the cashier asked. Hungry from a morning schedule full of staff meetings, I had just strolled into the deli for a quick sandwich. I had not heard any news since breakfast, so I was hoping to check the Web and get my lunchtime news fix on my IPAQ (via Sprint PCS) while I noshed on pastrami.

Wondering what the cashier was talking about, I turned the label towards me and noticed that indeed my carbonated beverage now proudly proclaimed, Diet Coke with Lemon. An avid Diet Coke drinker, I wondered how it was that I hadnt been aware of this new variety of my favorite beverage. After all, when New Coke came out, it had seemed as if the world had stopped. The public was outraged. Coke had to revamp its entire business strategy by bringing back the previous Coke as Coke Classic. Lets not even get into the whole Cherry Coke phenomenon. Point is, the media hyped every last one of these changes that the leading beverage companies made.

But times are different now. We dont get wrapped up in frivolous news like the holiday successes of Barney the dinosaur, Pokeman, Tickle Me Elmo, or Cabbage Patch Kids. Nor do we even seem to care anymore about once-pressing matters such as OJ Simpson low-speed chases (or traffic violations), and various government interns both missing and present. Serious topics such as the current war, its tragic beginnings, and the ongoing preoccupation with terrorists and their evil acts are foremost on the mind of Americans these days. And if that wasnt enough, theres the specter of an ailing economy that needs to be addressed. Id like to discuss the latter, at least as it relates to technology and communications, and so, I ask:

At first blush, the answer seems to be yes, when you realize that the economy has nose-dived so dramatically. How many stocks need to go from $250 down to $1.37 or even to 0 in one year before we assign the term depression to the tech market? Lets take a closer look at the situation. Sure, things are lousy now but I dont think they will remain so for very long. There are still some very good reasons to remain optimistic about the economy, including technology and communications. To wit

The consumer market is still very strong, making this appear to be only a partial recession at the moment.

The housing sector while not as vibrant as September 10, 2001 is still doing relatively well, considering the recent spike in unemployment.

Y2K corporate technology spending on specialized and general-purpose servers as well as other equipment was immense in 1999. Expect a good portion of these products, now outdated, to be upgraded or replaced once again in 2002.

Year over year corporate earnings will be easier to beat in 2002 than almost ever before. This has been a dismal year for profits, and the slashing of tremendous overhead means much leaner companies will be able to make the most of a small bounce in the economic environment.

Businesses are making ill-advised decisions right now because they are scared and uncertain about the future. People are investing in items that will offer a near-immediate return on investment. The long-term view has taken a back seat in the corporate environment. I dont think this situation can last very long, and I think many companies are all too aware of it. While these companies have slowed investments in marketing and R&D, they ought to realize that the spigot must be turned back on soon, else they face a grave situation.

As a result of the above point, a good deal of equipment needs to be replaced. I know of many companies holding off on new PBX and other purchases but who really need to change out this equipment soon. Subsequently, there is a good deal of pent-up demand for new capital expenditures that will have to take place soon in order for companies to function. This will give the tech market a much-needed boost.

Two words: Interest Rates. Rates havent been this low in 30 years and they could still go lower. Loan refinancing is generating needed cash for families and businesses alike.

Broadband: Dont look now but these fat pipes are still being adopted at a good clip. Cable modems and ILEC-supplied DSL are giving consumers competitively priced Internet service. Expect to see many new applications such as broader acceptance of SOHO/telecommuting/consumer IP telephony appear in 2002.

Windows XP: Microsofts latest and greatest OS is now standard equipment on the latest laptops and desktops. Microsoft has embedded SIP into this new OS meaning that IP telephony will enjoy greater acceptance and interoperability than ever before.

E-commerce: I predict that December and the upcoming year will see furious growth in e-commerce, perhaps not from a year-over-year perspective but surely as a percentage of total sales. Part of the reason for success will be some level of fear of traveling to malls, compounded by the simple fact that shopping online is becoming easier and less expensive than at brick and mortar stores by the day. Catalog retailers may also see some decline in their holiday business as the fear of mail-borne pathogens such as anthrax drives some percentage of their customer base to the Web.

On-demand computing: It may spur incredible innovation by allowing corporations to harness supercomputing power over broadband networks. IBM is just one company betting on this technology through their Grid Computing Initiative. According to the company, grid computing promises to make personal computers more powerful by harvesting idle power from other computers. It will also let workers collaborate on sophisticated applications via high-speed networks. When you consider that the cost of a 1.5-GHz computer is getting closer and closer to $500, you realize there is a lot of available computing horsepower available. If harnessed effectively, we can expect to see applications so powerful that they are as yet unimagined.

A colleague of mine once said, Lets face it. Its not Ford that will get us out of this economic slowdown. Meaning of course, that it will be the adoption of new technology that does it for us. Expect the technological innovation of America to continue to produce ideas that develop into new and rapidly growing markets worldwide.

Productivity: This has been less of an issue as of late. There was a time when productivity was of principal importance to corporations, and investments in technology were made to keep our companies running as efficiently as possible. Lately, weve focused on layoffs instead of productivity. Once there is a slowdown in the current downsizing trend, America will get back to the business of building the worlds most efficient workforce fueled by the use of new communications technology such as IP telephony-based devices, PDAs, and wireless broadband networks.

Should we be optimistic as regards the economy?

That answer remains elusive as, for all the great potential America has to lead the worlds economy upward, it seems to me that corporations are still sitting on the fence. We seem to be searching for a sign pointing more clearly towards a recovery before some of the items in my above list will come to pass. So what will the catalyst be? Will it be the achievement of some military objective? Some positive earnings news next year?

A run-up in the stock market? The results of a government-led stimulus package? Whatever it is, I hope we see it soon. In the meantime, expect me to continue covering the latest events in the industry as closely as ever and perhaps even closer. You see, I tend to work faster when I ingest caffeine, and recently Ive become a big fan of that new Diet Coke! 

[ Return To The December 2001 Table Of Contents ]

Honoring The Industry's Best!

The editors of INTERNET TELEPHONY magazine are pleased to announce the Best of Internet Telephony Conference & EXPO Fall 2001 award winners. The following companies exhibited their award-winning products at the show, which took place October 35 in San Diego, CA.

We look forward to seeing you in Miami, (February 68, 2002) when we gather at the next Internet Telephony Conference & EXPO. Last years event was a complete sellout! To find out more information on this must-attend event, please point your browser to www.itexpo.com

[ Return To The December 2001 Table Of Contents ]



 Adir Technologies, Inc. Voxis - VoIP Management Platform
AG Communication Systems iMerge Enhanced Business Services
Agilent Technologies NgN Analysis System
alexis communications  alexis 2.1
AltiGen Communications AltiServe Office Suite
Aravox Technologies, Inc. VoIP Services Platform
Brooktrout Technology TR2020
Dialpad Communications, Inc. Enterprise Access
digiquant IMS 4.0
Ericsson OneBox 2.0
Indigo Software Indigo MMStreamer
Intec Telecom Systems Inter-mediatE
NetIQ VoIP Assessor
Quintum Technologies, Inc. Tenor Call Relay
Telstrat International Remote Office 9110/9115; IDVR (Integrated solution)
VegaStream Vega 100 T1

Today @ TMC
Upcoming Events
ITEXPO West 2012
October 2- 5, 2012
The Austin Convention Center
Austin, Texas
The World's Premier Managed Services and Cloud Computing Event
Click for Dates and Locations
Mobility Tech Conference & Expo
October 3- 5, 2012
The Austin Convention Center
Austin, Texas
Cloud Communications Summit
October 3- 5, 2012
The Austin Convention Center
Austin, Texas