Mercator Capital's 2007 Outlook – Trends to Watch

Mercator Capital's latesst newsletter is out. They did some writeup of what they saw as the most interesting trends of 2006. Oddly, I didn't find them of particular interest. I certainly didn't feel they stood out now as the highlights of '06.

I did however like the thinking spawned by their 2007 Trends to Watch

#1 Trend – Cisco Versus Microsoft
This may appear as an unlikely coupling of companies, but both are big enough to warrant a trend of their own. Each has ambitious plans around IP technologies, and we see them being on a collision course in 2007 in both the consumer and business markets. Microsoft has long owned the consumer market, and has been pro-IP ever since it built SIP support into Windows XP. Their VoIP plans have been made known at various times during the second half of 2006, and they clearly have strong designs for integrating voice into their various platforms.

Mercator's take would lead us to believe they see some alliance between the to at the start. I don't think so. These are two 800 pound gorillas who will shake hands, smile at one another, then proceed with business as usual. Given that I wrote Gorillas or Titans, either way the battle lines are being drawn last June, it's nice to see the folks at Mercator agree.

#2 Trend – Voice 2.0 Applications
We
see this as the broadest reaching trend in this group, as it means
different things to different people. The underlying notion is that in
a broadband world, applications drive value for subscribers, not
access. Legacy-style applications simply replicate the past, which has
limited financial upside. The future belongs to Voice 2.0-style
applications, which essentially covers features or services that
leverage the power and flexibility of IP. The end result is high
personalized, customizable applications that are user-defined and
user-controlled.

Interesting, but hardly new. Again, I see this as validation, but folks like iotum, GrandCentral, Talkster, TalkPlus, Abbeynet, PhoneGnome , and the like have been leading the way into next generation voice services, or Voice 2.0 for a while now. Nice of them to mention iotum, sicne CEO Alec Saunders has been one of the leading voices in defining Voice 2.0.

#3 Trend – Emergence of the Prosumer
We recently referenced this term in an analysis of Brightcove,
and how they are focused on professional developers of Internet video
content. Whether producing user-generated content for fun and the buzz
of being on YouTube, or broadcast quality content for
a viewing audience, the prosumer class of commercially driven
professionals seeking a market is rapidly evolving. For the Internet
generation, this is not a large leap, and IP gives them the platform
and the tools to generate an endless variety of content. Brightcove is
very much at the vanguard in creating business models around this
phenomenon, and we expect others will develop in 2007.

If there's a projection I don't care for, it's this one, but only because it's not well articulated. Nice mention of SightSpeed, but the relevance to MySpace and YouTube escapes me. I think what they're saying here mirrors what I've said several times in talking about click-to-converge empowerment of users being a key success factor in the year ahead. See The Telecom Puzzle - The Telecom Lego Set

#4 Trend – Game Changing Technologies Finally Arrive

We
can barely touch on this topic in the newsletter, but we recognize that
a number of industry defining technologies will gain serious commercial
momentum in 2007. All of these have been evolving for a few years, and
are ready for market now. Topping this list for us is IPTV, municipal
WiFi and WiMAX, and to a lesser extent, FMC.

While the point is well taken, I'm not sure we'd all agree on timing or priorities. Certainly IPTV (and TVoIP) are game changers for many different players. FMC will be a bigger trend in my view than some of the others. WIMAC and mini-WiFi are fundamental enablers that change the last mile problem we've fought so long.

While I was a little disheartened to see security issues overlooked, I really recommend reading the entire newsletter here. It's well worth the time spent.