Phillip Redman

This week is our annual Fall Symposium in Orlando and if that’s not breaking news enough (OK–any large meeting this year is news) then we also like to make some tech announcements. One of the bigger ones this year is that IT spending in 2010 is likely to grow 3.3% versus a 5.2% decline we estimate for 2009. That is good news. We also listed our top 10 strategic technologies for 2010.  And like any top 10 list it has gotten a lot of attention and some criticism for what it left out.  That is the danger of doing a top 10 in any field. (OK–give me your top 10 favorite songs or restaurants?)  But one criticism in general impacts me more than others–that we left off mobility.  I guess being a mobile-focused Network analyst this is important–isn’t my research important anymore?  Should I be looking for a job somewhere else?

Seriously (I hope) you have to understand the depth and breadth of our coverage to understand how we work and also our theory on mobility.  Smaller research firms may only cover mobility or have a mobility-focused practice so they may not have the depth or understanding of how mobility impacts so many technology areas.  Or how deep Gartner’s mobility research is in almost everything we do, not separate but integrated into much of our research and thinking.  Oh yeah, we’ve been through separating mobile and wireless out as a research practice at Gartner but it just doesn’t make sense anymore.  In fact, about five years ago, ahead of everyone else in this area, we integrated mobility into our applications, networks, security, infrastructure etc. groups so that like our clients, tech providers and adopters, it becomes embedded in all our thought processes.  Nothing should leave out mobility including security, app development, networking, Green IT, cloud computing etc.   In fact, we just converged our wireless and network service provider Magic Quadrants into one–as wireless revenues from the top providers like AT&T or Verizon approach or have already surpassed 50% of their total annual revenues.  Is anyone else as far ahead in our thinking as we are?

I know we may have jumped the gun in some of this as we continually strive to be ahead of the market–not behind–but our focus on wireless, mobile computing is as strong–and in fact stronger, than it ever was.  It doesn’t have to be listed in a top 10 (which we did last year–again ahead of the rest of the market) every year or in our annual Predicts (4 of the top 11 predicts for 2009 were mobile-oriented), though it likely will be.

So we are taking some chances, pushing the envelope.  We are moving ahead by thinking mobility in every way,  can you keep up?

Looks like the FCC, in the next month, is going to mandate net neutrality to all types of Internet access, including cellular networks. In his first major policy speech, FCC Chairman Julius Genachowski proposed new rules including that, “the Internet remains an unfettered platform. . . ” meaning service providers will soon be restricted in managing speed and regulating usage through price. How did we get to this point?

Surely the growth of the Internet and the use of wireless wide area networks to access these networks are driving new rules. As cellular network spectrum is finite and expensive compared to wireline, some controls are needed to inhibit use. Right? Well not really. In a rush to drive data service revenue growth, U.S. wireless operators have increasingly reduced the price of 3G broadband access from around $75 retail, to under $45 per month on average for negotiated rates. The laws of price elasticity say the lower the price, the higher the volume. So demand has surged with a million new subscribers each month. Though providers tried to present their service as a wireline replacement by offering “unlimited” data downloads, the number of new users has put a crush on some networks, causing slower than average speeds and a strain on network capacity. In fact, operators have already changed their terms from “unlimited” to a maximum of 5GB per month–forced by several lawsuits. Operators routinely throttle (slow down) bandwidth of some users during peak times, which doesn’t give an optimum experience. And most users don’t even know it, blaming it instead on poor connections or some other problem that is difficult to trace back to the provider. So wireless, it turns out, is a different service than wireline–and should be priced differently.

Wireless operators are a bit to blame for all of this. In their rush to replace wireline services (particularly cable) they forgot the valuable, limited asset they have and that all networks aren’t created equal. Even newer wireless technologies like 3G and 4G will have a hard time keeping up with increasing demand as data shifts from low end messaging to multimedia. Not to mention the increasing cost of backhaul connections to get to the Internet. They would be wise to keep these lessons in mind as new services are launched–be upfront about pricing, throughput, data caps, throttling–or government regulations will get stricter. New laws will only make carriers think twice about additional investments in this area. In the end, a compromise will need to be reached to satisfy both sides, but wireless operators need to bring full disclosure to the table first, and that has never been easy in this industry.

This week, AT&T announced its plans to allow customers to call a predefined group of numbers, both in and out of the AT&T network where the call won’t count against their buckets of minutes. Called the “A List,” this was in response the Verizon Wireless’s adoption of the “Friends & Family” program earlier this year from the Alltel acquisition.  Even Sprint announced this week”Any Mobile, Anytime”  which on certain plans, allows unlimited calls to any mobile on any network (at anytime!).  All of these are available for both individual and corporate users.  Expect for AT&T.  Evidently corporate users don’t make the A List.

I talk to corporate IT buyers everyday.  They have a hard job.  This year it is more about taking, in the form of cost cutting, than giving.  Cellular companies only make it harder on them when they have an offer that anyone can walk into the store and get, except corporate IT buyers!  AT&T once had a great product called “Rollover” which let all users add unused minutes to next month’s allotment.  They took this away from business too.  Now many businesses have moved to pooling plans, which make sense, so losing Rollover wasn’t huge.  But it is another example where businesses that spend almost twice as much per user on wireless, get treated worse than the average person on the street.  Companies want to save money as much as the individual.  Business users subsidize the airline industry through higher fares, are they subsidizing the cellular market too?

Let’s hope AT&T rolls out the red carpet and puts corporate users on the “A List” soon.

It’s been a cold and dreary summer in the Northeast, but the last two weeks have finally brought a real summer.  And that, among other signs, has got me thinking positively about the future of the economy and what enterprises should be thinking about as budget season for 2010 starts in the next few months.

Though it is true that the buds of an economic increase have not yet bloomed, there are some heartening  signs that things may be getting better.  Unemployment, though not decreasing, isn’t rising as fast anymore, there has been a stock market rally bringing the Dow Jones up 3000 points since November 2008 to over 9000 and some of the laid-off people you know have actually found jobs.  All of this is good.

But there is no doubt that as IT budgets are created for FY 2010, there is going to be a cut even from the 2009 budget, which declined somewhere between 5-10% from 2008.  However even with that cut, we have seen enterprises still continuing to invest in IT–less strategic but more tactical.  Technology investments have been more about keeping a level-set environment versus introducing new projects.  In past downturns, companies that have invested versus just cutting ended up faring better once the recovery happened.

So now is the time to start thinking more strategic, more mid-term investing versus short-term cost control.  Though a recovery may not begin before year end 2010 or later, having a plan will help you move faster when it’s here–and one day, it will be.

For so many years buyers of cellular services were so used to complicated and inefficient cellular pricing.  Individual plans made users gamble on how many minutes they would use each month.  Guess too many and you had minutes you paid for but couldn’t use.  Guess too few, and even worse–penalized for overage which doubled and tripled your per minute cost.  The past couple years have seen the evolution from these plans to pooling and flat-rate which are much better ways to buy minutes.  But even so, not everyone has gone this direction yet, so a lot of companies are buying the wrong way and overspending.

Where is this going?  In the next few years I think many companies will start migrating to unlimited voice and data plans.  Launched about a year ago, these plans take the guesswork out.  But list prices are more, on average, than what enterprises are willing to pay per user, around $99-$120 versus the average of $75.  But I’ve started to see negotiated unlimited, flat rate services under that $75 mark at some telecommunication service providers, approaching $50.  It’s just a matter of time, maybe another 12-24 months, before this pricing becomes standard.  Increased competition as cellular penetration tops 80% and new technologies like LTE that will open up additional bandwidth are the main drivers.

Companies like Zer01 , which has just launched a nationwide mobile VoIP service over the AT&T WCDMA network for unlimited voice and data at around $75 will continue to put pressure on providers.  Now I don’t think the coverage or quality (amongst other issues) will be enough to make this company successful, but it’s good to see new models coming to the cellular market.  We might get out of the Neandrathal stage anytime now!

Tomorrow, July 3, the U.S. is starting it’s Independence weekend, with July 4th on Saturday this year.  Happy July 4th to everyone who celebrates it out there and here’s hopes that freedom continues to grow in the world, which seems to be moving even more in this direction.

In an industry not known for agreeing on a standard, ten of the largest mobile phone manufacturers have signed a Memorandum of Understanding (MoU) with the European Commission to standardize on mobile phone chargers by 2010.  Nokia, Apple. Research In Motion and others agreed to provide chargers based on the Micro-USB connectors.  Many are already doing that anyway.  It has become a convenient method to get charges from both outlets and PCs.  Why is this important?  First, there are already hundreds of millions of unused chargers sitting in drawers leftover from previous phones.  This creates an enormous waste problem.  Second, it can reduce the number of chargers mobile professionals need to carry with them. Anything to lighten the load is appreciated.

So what to do?  I’m looking forward to this because I like many others have a ton of these chargers hanging around.  First I’m going to gather them all up, but instead of throwing them out, I’m going to send them to be recycled.  In the U.S. this group will recycle phones and chargers–for free! (There are other organizations around the world doing the same, a quick search can find a local one.)  Second, I’m going to promote phones that use standardized chargers internally .  Finally, as this occurs I’m going to ask that phone manufacturers no longer provide a charger out with each new purchase.  Once this is standardized, there will be no need to do this–simply use the last one you had, it will work.  Of course chargers could be lost or broken.  It’s would be great to see a voucher or code system set up where new users can order one if needed.  Of course, many local electronics stores would carry them for quicker service, and as a commidity at a pretty low price.  This way, not only would we save on massive piles of waste, but we’d save materials that go into them in the first place.

Well done!

In a move that all companies should be happy about, President Obama, via a statement posted on its Website by IRS Commissioner Doug Shulman, has asked Congress to repeal a law that currently taxes personal use of corporate paid cellular phone usage.  If you think that sentence is confusing, you should take a look at the statute.  Nowhere does it actually define what personal usage is or how to identify it.  There’s the challenge.  However, if businesses that pay for their employees cellular bills don’t pay taxes on personal usage, or eliminate that subsidy for personal calls–there is liability.  Now the IRS won’t come after you specifically for this, but it will be included in an audit.  The crazy thing is, this isn’t new.  It’s been on the books for over 10 years, but has only recently been enforced, albeit sporadically.  We’ve been getting a lot of phone calls on this in the past year and have addressed it in our policy guidelines research.  Even so, most businesses have taken the approach of just hoping this goes away.  And maybe it will, now. 

It’s not over yet.  Congress, which has a chance to correct this in the past year, must now pass a law repealing it.  In the end, the tax loss is minimal since it is rarely enforced, and the loss of productivity is a bigger hit than what we gain anyway.  It’s your time to act.  Write your Congressman and get their support.  Until Congress acts, you better figure out a way to manage this or if you do get audited, you are liable.

But some questions remain.  Until a new law is passed will the IRS still pursue it in an audit?  What about those that got heavy fines for non-compliance, will they get their money back, will they be able to contest it in court?  Does this open a new problem now?  Is it wise or will Congress even look to pass a law eliminating a tax and a revenue stream during the recession, even a small one?  Many questions remain and answers are still to come.

I was in New York City this week visiting clients and the beautiful weather brought everyone outside.  The outdoor crowds included numerous U.S. Navy and Marine Corps soldiers in town for the annual Fleet Week celebration.  Since 1984, New York has hosted a number of ships docked on the piers and during the week, you can see uniformed Navy and Marine soldiers just about anywhere.  It’s a great opportunity for them to get out in the city and tour and a nice break from regular duty.  They get treated like the  heroes they are, kissing babies, posing for pictures and I’m sure imbibing a free drink here and there. 

This weekend in the U.S. includes the Memorial Day national holiday, when, if you don’t do this regularly,  it’s a good time to stop and thank one of those soldiers personally for putting their time and sometimes life on-the-line to protect us.  And yes, they are often available for a drink or two.  Happy Memorial Day, and thanks.

Humans and also analysts are always trying to make a decision of one thing over another, trying to keep it simple in the process. Which is better, faster, cheaper, smarter. Boiling it down to black and white is sometimes too simplistic a method. As an example, we are pushed one way or another to decide which cola we like better. (As an aside, I never really did have a preference of cola until “challenged” by one company. When I picked its competitor, I stuck with them for over 20 years now. I guess sometime it’s best not to force people to pick!)

Of course for some important decisions it is important to make a wise choice: marriage, houses, in-laws come to mind. But often in technology we are asked to pick one thing over the other, but you know, that’s not always the right way. In many cases there may be multiple choices that are right depending on the category. What are some of the choices IT is looking at now? Here’s a partial list I seem to go over almost every day:

• Cellular v. Wi-Fi–fortunately this one doesn’t come up as often, but it still does. These are not mutually exclusive, I don’t think they ever will be.

• Soft keyboard v. hard keyboard–this is purely a personal choice, really. Some say they can write more on a hard keyboard and be more accurate, but let’s face it, no one (sane) is writing a novel on any tiny handheld device keyboard.

• Wired v. wireless–this come up often in a debate for local and wide area networks. Again–the right choice is most likely a combination depending on the situation.

• Corporate liable v. individual liable–this has been a recent hotter topic as some companies look to reduce costs. Again, the hybrid approach most likely will win out here.

• Handheld v. PC/Notebook Computers–This rears its ugly head every so often. Can IT just get rid of supporting PCs/Notebooks now that handhelds are so powerful? I don’t think so for most users. Most will need a larger keyboard or display to create those wonderful presentations or view those insidious spreadsheets. However, for some users who have a, let’s call it, lighter workload (or someone to create or carry their data for them, that’s you C-level executive) maybe handhelds would work.

There are other examples of course but these are some of the hottest ones. I think the key here is that there are grey areas, not everything is so black and white. Call me if you need help with some of the grey areas, and even some of the colorful ones.

Last week I was in the nation’s capital and was doing some briefings and meetings with some pretty super secret groups.  Probably most of the technology I talked about was something they had invented or perfected years ago.  That far ahead. 

In one organization, all wireless devices were banned, for security sake.  Any mobile phones brought in were not allowed out again.  Even the buildings were designed to minimize outside and even inside potential propagation of wireless signals.  Many PCs didn’t even have Internet access, just intranet.  I gave a short presentation and something strange happened.  People were paying full attention.  Not looking down on their devices doing email or browsing the Internet.  People were engaged, asked questions (OK a couple napped, but it was after lunch).  With all the efficiency that mobile device users get, it’s sometimes impeded by always being connected.  Maybe more boundaries of usage needed to be defined–while driving, at kids’ sporting games–no, in meetings–well, maybe, just not all the time!