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Great Expectations

Think your business technology is all that and a bag of microchips? Well, it's not. Chances are, you need an upgrade. Here's a preview of the technologies that will change the way your company works.
September 1, 2004
URL: http://www.entrepreneur.com/article/72144

It's that time of year when we get the old crystal ball out of storage, polish it up, and try to divine where business technology is headed in 2005. We can definitely report that entrepreneurs won't be commuting with jet packs, and cleaning robots won't be standard in most offices. But technologies like Radio Frequency Identification (RFID), tablet PCs, Ultrawideband (UWB), VoIP and Wi-Fi are poised to make news. More important, some of them will have an impact on your business.

Even a fine-toothed comb can't always help you separate hype from reality when it comes to emerging and growing technologies. With expert help, though, we'll try. Our star witness is Patrick Duparcq, professor at the Krannert School of Management at Purdue University in West Lafayette, Indiana; director of the Center for e-Business Education and Research; and co-editor of the Krannert Technology Forecast, a yearly forecast of high technology trends. Now let's get started with VoIP.

VoIP

VoIP is one of those technologies that has been slowly creeping up on us for years. But now, with better voice quality, more widespread adoption of broadband, and a slew of service providers jumping on board, it's ready to charge out of the gate. Duparcq says that full-blown adoption of VoIP infrastructure in growing businesses will take a while, but partial solutions that integrate a business's current telephony hardware will be popular next year. "The bottom line is [that] the technology is approaching maturity," he says. "There are good standards now."

Entrepreneurs will do much more than save money on long-distance bills with VoIP. Extra features like find me/follow me, voice mails as e-mail attachments, and contact management software integration will improve productivity and streamline a lot of communications processes. Branch offices can be brought closer together, and it can all be done at a cost savings. It's also a fairly easy technology to scale up as your business grows.

Looks like 2005 will be the year VoIP starts to ramp up in businesses, and the following years will see greater adoption. Technology and market research firm ABI Research expects the market for hosted VoIP services to hit $36.5 billion by 2008. That's not far off. For more information, visit national service providers like Net2Phoneand Vonage, or check for a local or regional provider. If you're looking to upgrade or replace your existing phone system, now is a good time to look at VoIP.

Wi-Fi, PCs and Laptops

Wi-Fi Hot Spots

You'd have to be a hermit to not notice the way Wi-Fi hot spots are emerging across the nation. Coverage from a variety of sources will continue to expand in 2005. That's good news for mobile entrepreneurs and their on-the-go employees, who can log on from just about any city they find themselves in.

While many hot spots are free, businesspeople who need reliability prefer paid services like those offered by Boingo Wireless, Starbucks and T-Mobile. Duparcq sees a trend of a growing number of hot spots becoming available followed by some consolidation as larger providers gather smaller ones.

Hot spots will arrive in increasingly unusual places. How would you like to get Internet access from the corner phone booth or a soda machine? Verizon has already equipped quite a few phone booths in New York City to allow access for subscribers. Pretty soon, you won't be able to toss a hot dog in Manhattan without it flying through half a dozen hot spots. And the rest of the country, particularly the larger metropolitan areas, will be following along.

But this trend isn't just about road warriors logging on-it's also about businesses offering Wi-Fi as a perk to their customers. This really makes sense for places like coffee shops, restaurants and other locations where people are likely to hang around for a bit. The reasons driving this growth can bear some scrutiny.

"If they do it in the first place to make more money based on customers paying for the usage, I think many of them will come out disappointed," says Duparcq. Entrepreneurs who turn their businesses into hot spots to compete with rivals or to improve their internal business functions will see the most benefits. Expect 802.11g to be the dominant standard in 2005. More and more entrepreneurs will get onboard as prices come down even further on an already affordable and useful technology.

PCs

The desktop PC is still the cornerstone of business technology investments. Next year should be a mild renaissance year for PC sales. A report for 2004 from tech research firm Forrester Research showed that 95 percent of small and midsize businesses were planning to invest in new PCs. That trend will roll over into 2005.

We talked with Louis Kim, director of business PCs at Hewlett-Packard, about what to expect in desktops next year. While a variety of computer shapes and sizes will be available, there are some interesting trends going on under the hood. Security and manageability are two items to keep an eye on.

"What's missing is a secure, hardware-based storage of security keys and passwords," says Kim. Security on a chip, also called trusted client platform, is a recent development from the past couple of years. The chip stores passwords and security keys separate from the hard drive, making them nearly impossible to hack. Now Hewlett-Packard and most major computer manufacturers are offering the chip in business desktops. It's one feature to look for next year when purchasing or upgrading systems.

Manageability will also be big. "Manageability software at its most basic level gives you the ability to inventory all your computers in the network and monitor the health and the currency of all the software and drivers-all from one computer," says Kim. Look for manufacturers to promote this to entrepreneurs in the coming year as a way to save time, automate computer updates systemwide, and catch hardware failures before they happen.

Soon, your desktop may not even be on your desk anymore. While thin clients and blade PCs have been in the domain of enterprises, they're starting to move into smaller companies. Blades behave a lot like regular PCs. Each user gets his or her own blade, but the devices sit together in a room and are connected through a network. "Long term, blade PCs have a larger potential to supplant more desktop PCs because the experience at a user's desk is closer to that of a PC," says Kim. Blades are a good fit for businesses with limited IT staffs due to the ease of maintenance and central location of the hardware.

Laptops

On the portable side, laptops will continue to increase in popularity. Whether entrepreneurs are looking for lightweight mobility or a portable replacement for a desktop PC, notebook computers are where they're turning. "We see a continuing trend to have notebooks as a larger and larger percentage of overall PC sales," says Ted Clark, vice president of mobile computing at Hewlett-Packard. With attractive price points, powerful specs and decent battery life, look for 2005 to be a big year for laptops in growing businesses.

Wireless is still a big buzz when it comes to mobile computing. Next year will see a shift from 802.11b Wi-Fi to the faster 802.11g Wi-Fi as standard equipment in business machines. Clark also sees a bright future for widescreen notebooks that feature a lot of viewing space without being too clunky. Database, spreadsheet and multimedia users will get the most out of purchasing laptops with widescreen technology.

Is It There Yet?
Ultrawideband (UWB) radio technology for short-range wireless holds a lot of promise: speeds exceeding 400Mbps data transfer, low cost and low power consumption. Proponents say UWB could be positioned as a cheaper and stronger alternative to Bluetooth. It packs enough bandwidth to handle multimedia and streaming video. Think of it as a particularly robust form of cable replacement.

That all sounds good, but right now those dulcet tones are being drowned out by industry squabbling. Two competing standards factions have slowed official ratification of an industrywide standard. And that means 2005 may not be the year for UWB to reach growing businesses after all. But the technology world is quite fickle, so UWB is still a technology to keep an eye on over the next year.

RFID, E-Commerce and Storage

RFID

RFID-radio frequency identification tags that can help companies track the movement of goods through the supply chain in detail-has been big news in 2004. Major retailers like Target and Wal-Mart are starting to require their largest suppliers to implement RFID. For most growing businesses, this is a trend you'll be reading about in 2005 but not actually adopting until a few years down the line. "It's something that will take some time because, at this moment, it's expensive to do," says Duparcq. You can put the RFID hype meter on lukewarm for now. Keep an eye out, though, as the technology improves and prices come down.

E-Commerce

E-commerce has been the redheaded stepchild of retail ever since the Internet bubble burst. It's not exactly an overnight Cinderella story but has quietly been doing very well over the past couple of years. Look to 2005 to be a year of growth and expanding Internet offerings. Technology market researcher eMarketer predicts that U.S. online retail sales in 2005 will reach about $88 billion, up from an estimated $72 billion in 2004.

While online sales only account for a small percentage of retail, the repercussions are much greater. "What you sell online may only represent 5 to 10 percent of what you sell overall," says Duparcq. "But your online presence and how you educate customers may affect up to 50 percent of all retailing because of lead generation, generation of traffic into stores, selection of products, and shopping around for products before walking into a store and buying."

With e-commerce taking on an important role in day-to-day business functions, it's a good time for you to re-evaluate and revamp your Web site for the coming year. Online customers now expect professional appearances and smooth surfing. The growth of local paid search services, such as the one Google offers, can direct valuable local traffic to your site and, from there, to your brick-and-mortar store. The Kelsey Group, a market research firm, estimates that 10 percent of local searches are made with an intention to buy something (whether or not a transaction ultimately occurs). For Internet advertising, those are pretty good odds. An informative, well-designed Web site will be key to turning surfers into buyers.

Storage and Backup

They're not as glamorous as some of the technologies we've looked at so far, but storage and backup are as important as any of them for growing businesses. Keeping, organizing and protecting data should be at the top of every entrepreneur's to-do list. Backup devices have been available for a long time, but they haven't always been easy to set up and use. The trend for 2005 is for storage systems that are truly user-friendly.

One example is the MirraPersonal Server M-80. An appliance that starts at $399 (street), it allows for automatic backup, file sharing and remote access. This sort of device will become common as entrepreneurs seek user-friendly but powerful ways to store their data. Keep an eye out over the coming year for more and more companies, small and large, to offer similar solutions for growing businesses.

We're in a business technology renaissance. Affordability, power, features and ease-of-use are intersecting in categories from wireless to laptops. Next year will be a good time for established businesses to go for the upgrades they've been putting off. Looking into the crystal ball, we predict an interesting and profitable year for growing business technology.

Keeping Tablets
Don't look away-the tablet Pc is definitely one to watch in the coming year.

Combining a laptop with the characteristics of an old-fashioned notepad is a compelling idea. Tablet PCs can have slate forms, desktop dockable forms or convertible forms that look more like a regular laptop. All appeal to different entrepreneurs and different types of businesses. For example, those who need to carry a computer around a warehouse tend toward the lightweight slate style. Those who don't want to say goodbye to their keyboard make the convertible laptop style an increasingly popular choice.

Manufacturers will refine tablet hardware in 2005, but don't expect any radical design changes. "The exciting thing is the additional software that has come out to support ink and handwriting," says Ted Clark, vice president of mobility at Hewlett-Packard. As more applications reach the market, tablets will make more sense for you to invest in. The ability to dock a tablet and use it with a larger external monitor lends a lot of flexibility to its use. Looks like 2005 could be the year tablets go mainstream.