KEY POINTS:
Spending on IT is expected to be hit in 2009 as the financial meltdown continues to dominate global economics. According to IDC, spending will still be higher than 2008, although the market analyst firm has slashed its local and global growth forecast.
Ullrich Loeffler, who takes charge of IDC New Zealand this year, says the New Zealand IT (information technology) market is expected to expand by 3 per cent in 2009, instead of a pre-credit-crunch forecast of 4.4 per cent. That represents US$63 million ($107.5 million) of sales that will not now materialise.
New Zealand, which on a ratio of IT spending to GDP is the 11th most IT-intensive country in the world, fares better than the global market. IDC had been forecasting worldwide IT market growth of 5.9 per cent but has wound that back to 2.6 per cent.
Hardware sales will feel the brunt most sharply, followed by software (wallets are expected to snap shut on purchases of software for home use), IT services and telecommunications spending.
Rather than flock to new technology, organisations will be looking for more efficient ways to provide their IT and communications services during 2009, says Loeffler.
Operational costs - what Loeffler calls "keeping the lights on" - account for about 80 per cent of IT spending in New Zealand organisations. The focus in 2009 will be finding ways to trim those fixed costs, through such means as exiting software maintenance agreements and renegotiating telco contracts.
So what will the technology trends of 2009 be?
BUSINESS COMPUTING
Organisations will be reluctant to make major capital spending commitments on IT in 2009, says IDC's Loeffler. That will apply even where open source alternatives promise long-term savings over existing systems.
The necessity for software maintenance contracts will be questioned and spending will be confined to "must-have" items with "nice-to-haves" being struck off shopping lists. In that category will be desktop operating system upgrades - if Microsoft was already finding it hard going persuading customers to give up Windows XP for Vista, it will now be tougher than ever.
Technology innovation could slow due to cuts in R&D spending but consolidation among suppliers is on the cards as vendors with plenty of cash on their balance sheets go on a shopping spree. IBM, Hewlett-Packard and Microsoft are potential splurgers on niche technology companies or supplier partners in foreign markets.
SOFTWARE
Rod Drury, head of Wellington online accounting software company Xero, expects to have more company in the software-as-a-service realm during 2009.
"All the vendors are now working much more on what their software-as-a-service strategy is," says Drury, who set up Xero in 2006. This is part of a trend to drive down the cost of computing.
"We're hearing from Dell and HP that they're selling PCs in China now for US$150. If you look at the software, you'd normally need to buy Windows and Office for $300 to $600, so there's a huge motivation by the PC vendors and everybody else to drive the end-point of computing costs right down."
The single most significant release of the year, Drury thinks, will be the arrival of Google Chrome, the web search company's browser software.
"Once Chrome comes out over a Linux operating system I think we'll see very inexpensive computing end-points because obviously you don't need to store a whole lot of data on the device, you just need a bit of local cache." That will lead to a rash of cheap "netbooks" and other devices that boot straight to Chrome.
But Drury doesn't think Microsoft will be left on the sidelines. "I think Microsoft will meet the market ... we'll see a kind of locked-down Windows with Internet Explorer 8."
Perhaps more dramatic from Microsoft, however, will be Office Live, says Drury, which promises the ability for a number of people to collaborate on Office documents over the internet.
"Being able to leverage the power of the installed applications and have two or three people around the globe working on a press release or on a budget in real time is the most exciting productivity improvement I've seen in the enterprise space for some time."
TELECOMMUNICATIONS
In telecommunications, the "only show in town" in the coming 12 months is the Government's broadband plan, says Ernie Newman, chief executive of the Telecommunications Users Association (TUANZ).
"The technological and commercial choices made relating to that will eclipse everything else in terms of the impact on the market."
Newman expects work to begin on the National-led Administration's "ultra-fast" $1.5 billion broadband rollout only after a decision has been reached on whether it should be handled through a national or regional tenders.
"I can't envisage a lot of the consumer benefits coming through in the early stages."
Beyond that, economic conditions will limit telecommunications innovation, Newman thinks. But a couple of significant developments have been signalled in the mobile market.
Newman hopes the long wait for NZ Communications to switch on the country's third mobile network will finally end this year.
"We desperately need it as the [December] Commerce Commission monitoring report showed. We've returned to our original trajectory which makes us the fifth or sixth most expensive country in the OECD for a mobile phone."
Telecom, meanwhile, aims to launch its WCDMA network by June, which Newman says may have a bearing on competition. Xero's Drury, who thinks New Zealand is being left behind in mobile data pricing, is expecting more of Telecom's move.
"The key event in 2009 is the rollout of Telecom's new network and I expect at that point we'll start to see mobile data prices drop significantly - hopefully we'll see $1-a-day type mobile data pricing," Drury says.
THE WEB
According to trend-spotter Nathan Torkington, the web can be seen in whatever technology direction you care to look.
"The web is the backbone for almost everything these days," says Torkington, organiser of Kiwi Foo Camp.
That event, a Kiwi version of a US "unconference" run by publisher O'Reilly Media, takes place in Warkworth in February. It brings together leading lights from a range of fields including the arts, science and technology in a format designed to get their creative juices flowing.
"The idea is they're interesting people who wouldn't otherwise meet and they get together to talk about what interests them," Torkington says.
"It could be the economy, it could be something technological - to do with the web, say - or could be what's new in neuroscience."
Chances are when the Foo Campers start talking about the web it will be in connection with location-based services (LBS), which Torkington thinks are about to break through into the mainstream.
"GPS and location-based stuff has been brewing for a while. It started with Google Maps, showing us that you could do more with a map by interacting with it."
Torkington's favourite of the resulting Google Maps "mashups" is EveryBlock, a site that compiles information such as crime statistics, real estate listings, liquor licence applications and news stories for different neighbourhoods of American cities.
"It aggregates all this information into one site, putting the location first and foremost."
The site works impressively in the US, where the Government is generous about the data that it makes freely available. Torkington thinks the New Zealand Government has some way to go before an equivalent service could be provided.
"The Government really has to get its act together in opening up the data that it has so that businesses and citizens can use it - we've paid for it, so where the hell is it?"
Cloud computing - accessing computer programs over the web rather than on the user's own computer - is another trend Torkington predicts will take off in 2009. Google and Amazon will be leaders in cloud computing, he says, but so will Microsoft.
"It missed the internet, it missed web-based software but it did build absolutely enormous data centres when it realised web-based delivery of applications was going to be a big thing. It has spent hundreds of millions - possibly billions - of dollars building data centre after data centre all around the world."
MOBILE APPLICATIONS
If Torkington has great expectations of LBS on the web in 2009, Luigi Cappel sees them being commonplace on mobile devices within four or five years. Cappel is sales and marketing manager at GeoSmart, a 30-year-old company acquired in 2007 by the AA that has an extensive geographic database ripe for exploitation by LBS providers.
And with GPS-equipped handsets such as Apple's iPhone now on the market, Cappel thinks the day of mobile LBS has come.
But what is lacking is services.
GeoSmart is attempting to spur the market to life by running a competition for LBS creators, the Location Innovation Awards, which by Christmas had close to 30 entries. Proximity-based marketing is proving the most popular category, Cappel says.
If that conjures up images of being pursued all over the countryside by unsolicited text messages from every bar or restaurant you stray near, Cappel has a soothing response.
The competition rules stipulate that such services be provided on an opt-in only basis, he says.
"Because we're very excited about the potential of LBS, we're also concerned that nobody messes it up."
BREAKTHROUGH TECH
Look out for Twitter, says GeoSmart's Cappel, a web and mobile-based way of keeping in touch with professional and personal contacts.
"If you consider that a lot of us are successful because of our networks, this is a way of growing your network to people around the world who are experts in their field."
A candidate for ultimate hardware breakthrough is 3D printing, by which everyday objects can be fabricated at the press of a button.
Various 3D printing efforts are under way around the world and Vik Olliver, of Laingholm, is involved in one, the RepRap project.
Olliver and international collaborators are developing a fabricator that can replicate itself.
A handful of examples of a prototype, dubbed Darwin, multiplied to more than 1000 during 2008, Olliver says.
Refinements, and many more replicants, can be expected in the coming year.
