IT Staffing Crisis: Managed Services Opportunity

With only an estimated five million new workers entering a workforce in which twenty-five million will retire over the next twelve years, IT shops are facing an obvious personnel crisis, argue researchers at Ovum. "North American IT shops may well be facing a staffing perfect storm," says Tom Kucharvy, Ovum SVP.

Do the math: Lose 25 million; gain five million, for a net loss of 20 million IT personnel. Assuming technology and software continues to be more important in the future than in the past, it seems rather obvious that enterprise, small business and consumer technology support has to change, and change dramatically.

So is it not reasonable to assume that technology has to be made easier to use; support has to be virtualized (not delivered on site, by a technician)and software has to be delivered as a service?

Two big challenges are certain, Ovum argues. "The impending mass retirement of baby boomers will deplete staff and starve many companies of critical skills."

"Meanwhile, a shortage of replacements due to a smaller crop of college graduates and a dramatic decline in students planning to enter IT-related fields will compound the problem.

"Fundamentally reassessing the skills that will be needed over the next five to ten years rather than attempting to duplicate or replace current skills is the first strategic step companies must take immediately to address the issue," says Kucharvy.

Is U.K. Business Broadband Near Saturation?

By October about 1.76 million (85 percent) of the 2.12 million U.K. workplaces already had Internet access. This is much the same proportion as six months earlier, in March according to Point Topic. Which could lead to several different conclusions. One might argue that the base of potential buyers is nearly saturated. Or one could argue that the remaining 360,000 sites require some new sort of plan. One might also argue that some businesses might not require broadband, for some reason.

Point Topic’s latest results contrast with the 6.3 percent increase found for the period May 2006 to March 2007 when the pace of broadband development was still high.

Part of the problem is that most of the remaining businesses without internet access are small and poor, Point Topic notes. There is a strong positive association between workforce size and business internet penetration. Organizations with more than 250 employees all have Internet access. Businesses with only one or two employees reported 75 percent penetration.

Internet penetration is 100 percent in the businesses with the highest sales volume, particularly those in the finance sector. All businesses with over £20 million in sales have Internet access, but only 77 percent of those in the “£50k to £100k” category do.

The wholesale and business services sectors are both close to saturation with take-up at 95 percent. The least connected is the retail sector, where only 67 percent of companies have Internet access.

About half of businesses say they are making do with an ordinary, low cost, consumer type internet service. But as the number of employees in a business rises, the proportion using consumer-type internet services falls and that using more expensive business-quality services rises.

In terms of internet connection types, cable modem connections are found much more frequently at smaller workplaces, with 20 percent of all Internet-connected one or two employee businesses choosing them.

Take-up is only around five percent at medium-sized sites and they disappear altogether at the biggest ones. More common amongst businesses with greater employee numbers are satellite, fiber, ATM, leased line or frame relay connections. Some dial-up or IDSN connections are found at all workforce sizes – with ISDN much more important at the larger end.

Everybody is an Information Worker: Bill Gates

So says Bill Gates, Microsoft Chief Software Architect: One of the most important changes of the last 30 years is that digital technology has transformed almost everyone into an information worker.

A lot of people assume that creating software is purely a solitary activity. This isn't true at all.

In almost every job now, people use software and work with information to enable their organisation to operate more effectively.

That's true for everyone from the retail store worker who uses a handheld scanner to track inventory to the chief executive who uses business intelligence software to analyse critical market trends.

So if you look at how progress is made and where competitive advantage is created, there's no doubt that the ability to use software tools effectively is critical to succeeding in today's global knowledge economy.

A solid working knowledge of productivity software and other IT tools has become a basic foundation for success in virtually any career.

Beyond that, however, I don't think you can overemphasise the importance of having a good background in maths and science.

If you look at the most interesting things that have emerged in the last decade - whether it is cool things like portable music devices and video games or more practical things like smart phones and medical technology - they all come from the realm of science and engineering.

The power of software

Today and in the future, many of the jobs with the greatest impact will be related to software, whether it is developing software working for a company like Microsoft or helping other organisations use information technology tools to be successful.

Bill Gates
Lifelong learning is vital

Communication skills and the ability to work well with different types of people are very important too.

A lot of people assume that creating software is purely a solitary activity where you sit in an office with the door closed all day and write lots of code.

This isn't true at all.

Software innovation, like almost every other kind of innovation, requires the ability to collaborate and share ideas with other people, and to sit down and talk with customers and get their feedback and understand their needs.

I also place a high value on having a passion for ongoing learning. When I was pretty young, I picked up the habit of reading lots of books.

It's great to read widely about a broad range of subjects. Of course today, it's far easier to go online and find information about any topic that interests you.

Having that kind of curiosity about the world helps anyone succeed, no matter what kind of work they decide to pursue.

Nortel Claims Patent Infringement by Vonage

Nortel Networks has sued Vonage Holdings Corp., alleging Vonage is infringing 12 Nortel patents. Of course, in some ways it is a counter-suit, as Vonage earlier had sued Nortel seeking to invalidate three of the patents.

An injunction would prevent Vonage from using technology that relates to 911 and 411 calls, as well as its "click to call" feature.

Business Model Juxtaposition

There are multiple reports from Twitter users on T-Mobile networks that Twitter streams are being interrupted. Separately, photographer Lane Hartwell has taken 5,000 images formerly available on Flickr out of public view. What's the resemblence?

Hartwell objects to images being used on the Web without credit or compensation. "I don't want people just taking my stuff and saying, 'We're going to redistribute this to the masses," she says. She wants to protect her business model, in other words.

Assuming T-Mobile actually is blocking Twitter posts, one would assume there is a similar motivation: to protect the business model.

"It is stealing," Hartwell says of the unauthorized use of her photo in a YouTube video. "I'm not a charity. This is my living."

Likewise, T-Mobile seems to be taking the position that its "short code" service requires a commercial relationship with T-Mobile.

“Twitter is not an authorized third-party service provider, and some services are not available on third-party networks or while roaming," T-Mobile is reported to have replied to a complaint about the apparent Twitter blocking.

"We may impose credit, usage, or other limits to service, cancel or suspend service, or block certain types of calls, messages, or sessions (such as international, 900, or 976 calls) at our discretion,” T-Mobile reportedly has said.

The point is that use of some resources occasionally is a direct assault on some individual's, or some enterprises's, business model, and those entities sometimes take steps to protect their business models.

The observation is that as all content, communications and information moves to IP delivery, these sorts of disputes are bound to multiply.

Search Surges

U.S. users posted a new record for the number of search queries performed on the top engines in November, with over 8.1 billion discrete searches. That’s roughly 48 monthly searches per person on average and 12 more monthly searches than the 36 per month that Compete estimated for November 2006.

Personally, I think I do something more like 48 searches an hour!

Fair Use: Tragedy of the Commons

I might not be the most popular user in defending "fair use" policies, but I have to tell you there is such a thing as the "tragedy of the commons."

Without being overly literal about it, the "tragedy of the commons" is a way of describing how free access and unrestricted demand for a finite resource ultimately dooms the resource through over-exploitation.

This occurs because the benefits of exploitation accrue to individuals or groups, each of whom is motivated to maximize use of the resource, while the costs of the exploitation are distributed among all those to whom the resource is available.

As a westerner, I'll illustrate the problem by pointing to the history of conflict over grazing and water rights. Assume you are a cattle or sheep rancher, grazing those animals on open range that actually is owned by the U.S. government. Assume the market for livestock is good. Each rancher then has an incentive to add animals to the herd, increasing the intensity of grazing. At some point, there isn't enough grass to support all the animals.

Now Internet access is a shared resource, by definition. If you use a cable modem, the actual bandwidth is shared by a large number of end users. If you use Digital Subscriber Line, the sharing happens further up in the network, but the resource still is shared. "Oversubscribed," we like to say. One never provisions enough bandwidth to meet the full theoretical demand any single subscriber might use.

Basically, designers use statistics to provide enough bandwidth to meet average demand, at average times of day, and day of week, to meet the demand created by users who actually are online and using the resource at any given point.

But those statistics are based on "typical" demand. So what might be typical? For a consumer user, somewhere between one and three gigabytes of use in a month. My business use--and I am on the Web all day from roughly 6 a.m. to 8 or 9 p.m.--runs about 2.5 Gbytes a month, typically.

There always are a small number of users who "graze their cattle" vastly more extensively than the rest, creating something that might be less than a major "tragedy of the commons" problem, but clearly consuming enough bandwidth that user experience for all the other users paying the same amount of money is degraded.

"T'aint fair." There's a solution for very-high usage: buy a business plan that really offers "all you can eat" bandwidth at the level you require.

At Qwest Broadband, for example, the illustrative volume that really is excessive for a consumer user might be:
• 300,000-500,000 photo downloads in one month
• 40,000 to 80,000 typically sized MP3 music downloads in one month
• 15+ million unique e-mails each month
• Online TV video streaming of 1,000-3,000 30-minute shows each month
• 2-5 million Web page visits (approximately one every second, 24 hours per day)

Those of us who have jobs, spend time outdoors, play sports, garden, ski, raise children, go shopping, read books and so forth really don't have time to consume that much data in a month.

Some people might have to do those sorts of thing for work, but that's the point: buy business bandwidth that clearly is sold with the understanding that if you want to push the network that way, you pay more for the privilege.

So long as access bandwidth is a shared resource, there will be a "freeloading" or "tragedy of the commons" danger. Good citizenship, good manners and good neighborliness requires a little respect for other people here.

I fail to share the "outrage" of people who think they should be allowed to overgraze the commons. Nobody has a "right" to impose those costs on the rest of users who "play nice."

Windows Vs. BlackBerry in Enterprise?

A recent poll of enterprise wireless subscribers found 84 percent of respondents who do use smart phones, use a BlackBerry, according to InfoTech. Palm Treo and HTC devices trail and Microsoft OS devices, though growing fast, appear to fare no better than fourth.

But Windows Mobile finally is making inroads. "As such, the world essentially will come down to RIM vs. Microsoft in the enterprise market," says InfoTech.

More than 70 percent of respondents say email is the most important function of a smartphone, followed by Internet Wi-Fi access at 12 percent, the survey found.

More than 80 percent of respondents indicated they also use text messaging.

About 49 percent of survey respondents across all enterprise sizes said they were using wireless data card, with nearly 38 percent reporting a preference for the Verizon Wireless network.

Sprint the second-largest base at 24 percent. And speed apparently matters. Some 81 percent of respondents would switch operators to get faster speeds.

If Microsoft Had Designed GMail...

A funny spoof at http://blogoscoped.com/archive/2007-11-20-n35.html

SME VoIP Still a Challenge

Plenty of challenges continue to face successful providers of hosted or premises-based VoIP services. In its most recent survey of IP communications demand in the small and medium business market, Savatar Research found some “good and bad news and some that is disturbing,” says John Macario, Savatar president.

“We were expecting a bump in the market, based on the last three years of work, or at least a growth rate consistent with the past,” he says. “The bad news is that adoption is flat.” There’s not a lot of growth, he says. SME adoption is stalled at about 17 percent.

“There’s increasing frustration among SMEs,” who apparently haven’t yet gotten the message about benefits, which are clear enough based on feedback from executives who have purchased and use IP communications products and services.

It isn’t that SMEs are buying legacy phone systems. They just are not moving. They’re “just sitting on what they’ve got.” And that’s true both for premises phone systems and hosted offerings, Macario says.

All of which suggests many service providers who don’t know how to serve the market, he notes.

Macario says there is some evidence that buying might even have slowed over the last year. For those who have purchased IP communications products or services, “more than 70 percent purchased more than one year ago,” Macario says. “Only 12 percent have purchased between six months to a year ago.”

“About 15 percent have bought last six months,” he says.

The good news is that “the buyers are insanely happy,” Macario notes. About three quarters of respondents say they have gotten economic benefit while 75 percent say the systems are much easier to manage.

About 84 percent say the quality of their IP systems is as good or better than their old systems. The same percentage say the IP systems are as good or more reliable than the old systems.

As you would expect, 82 percent say the IP feature set is far better. Astoundingly, 95 percent say they would recommend or highly recommend the service or system they now use.

They “really are enthusiastic,” Macario says. Among the most-used IP features is the auto attendant capability. For many SMEs, this is the first system that allows them to do so. Half of respondents say they use it. About a third use group-oriented features or informal call center capabilities as well.

About a third use find me/follow me or simultaneous ring, he adds. About a quarter use click-to-dial and the ability to integrate with Microsoft Office applications. “People are starting to explore the feature set and figure out what else they can do,” says Macario.

But it is wireless services of various types that seem to be top of mind and growing in importance. Wireless related services also seem to have huge potential for inducing churn.

Of those who have deployed some sort of IP communications capability, about 71 percent are very or somewhat interested in FMC as a desktop replacement service, if the pricing is acceptable. About 83 percent would be interested in using it as an add-on or replacement for at least some desk devices.

Asked what else they would consider buying from the same vendor who sold the IP communications service or system, about 40 percent indicated wireless was on the list. About one third would buy Web collaboration tools like WebEx or Live Meeting services.

Demand seems to be just as high even for respondents who have not bought any IP communications service or capability. About 75 percent of those who haven’t yet bought are somewhat or very interested in fixed-mobile solutions.

Some 70 percent said somewhat or very likely to switch from their wireline service to an FMC offering and 70 percent said they would switch from their current mobile provider to get the capabilities.

About 71 percent of respondents who haven’t yet bought an IP solution would be interested in mobile desktop replacement as well.

Respondents say they would be willing to consider replacing at least some desktop phones if doing do saves about 20 percent from their total communications bill.

About 35 percent of respondents say they now pay for employee use of mobiles, picking up between 76 and 100 percent of the cost of the service.

Traditional telcos also are getting more traction and mindshare in the business VoIP space, it appears. For two years, traditional phone companies have got a really low share where it comes to SME executive perception about “who” provides business VoIP servicers, says Macario.

This year, telcos moved seven points higher. About 24 percent of respondents now view telcos as providers of business VoIP. Interestingly, 29 percent said cable companies come to mind as providers of business VoIP.

Non-traditional providers fare best at smaller firms. As firm size goes up, telcos do better. In the 50 to 99 employee segment, only 20 percent say non-traditional telcos are logical providers. And note: the cable gets 22 percent of the votes in that segment category.

That might be surprising for CLEC and other executives who think cable will not get traction in the SME space. “When a CLEC or a pureplay provider knocks at the door, they want to know who they are,” says Macario. “Cable has a brand. That helps.”

Cable already has surprising share at the lower end of the broadband access market. In the one-to-four-employees segment, “about half use cable modems,” says Macario.

“Once you get up to five to 19 employees, then 11 percent have T1s,” he notes. “DSL share is 47 percent, 25 percent T1 at slightly larger firms.”

Overall, says Macario, service providers, in a broad sense, aren’t doing a good job of communicating the benefit of making a switch to IP communications.

More Personalized Digital Media

U.S. consumers across all demographics and geographies appear to be adopting digital behavior that is far more personalized, distributed and niche oriented that executives at Avenue A/Razorfish previously had thought. In fact, a recent survey of 475 consumers found that the majority are personalizing their digital experiences and sampling a wide range of niche content.

Those behaviors span recommendation engines, blogs, customized start pages, video consumption, mobile behavior and use of social media. About 60 percent of respondents have customized their home pages, for example. And 82 percent use bookmarks “all” or “most” of the time.

But there is less use of more participatory features. About 18 percent subscribe to Really Simple Syndication feeds “all” or “most of the time.” About 39 percent read “most popular” or “most emailed” links “all” or “most” of the time.

Only about 12 percent use tag clouds “all” or “most” of the time.

According to the survey, nearly 70 percent of consumers read blogs on a routine
basis, and 41 percent have their own blog, or post frequently to blogs. In fact,
46 percent of consumers who responded to the survey read four or more blogs
on a regular basis. All of that blog activity is significantly cutting into the
reach of traditional media outlets, Avenue A/Razorfish notes.

Some 91 percent of consumers rely on the Web to get current news or information, vastly eclipsing more traditional outlets such as television, Avenue A/Razorfish says.

The growing use of niche content also can be seen in respondent consumption of music and video consumption as well. Some 67 percent of consumers watch videos on YouTube or similar sites on a regular basis and 42 percent purchase music online. Avenue A/Razorfish executives conclude that online video not only is becoming more pervasive but also is affecting offline consumption.

For example, 85 percent of consumers have watched a movie preview online before going to see the film at a theater. Some 58 percent of consumers have used a service to download (iTunes) or order (Netflix/Blockbuster) films online, and 71 percent have watched a TV show online.

Consumers also appear to react positively to recommendation engines and personalized services: 62 percent of respondents have made a purchase based on personalized recommendations (by retailers such as Amazon.com) while 72 percent find such services helpful.

Broadband Changes Just About Everything

Broadband might not change everything, but it changes an awful lot for communications and content service and application providers. For starters, broadband drives a tripling of user time spent online, says Nate Elliott, Jupiter Research senior analyst. That means users already spend more time online than with print media.

To the extent that service and application providers support their business models by advertising revenue, that means more revenue for Web sites and applications, less for print vehicles.

Where a typical user might spend three hours a week with print media, users in western Europe routinely spend four hours a week online. But there’s a huge difference. About two thirds of users who are 65 or older spend more than five hours a week with print media. Users between 15 and 24 are more than 400 percent less likely to do so.

By some recent measures, user involvement with content sites has eclipsed use of the Internet for communications. At least, that’s what the Online Publishers Association says.

Jupiter analysts say that does not mean “news” is dead, or that newspapers are necessarily dead, yet. News is the top type of online content, and users are 300 percent more likely to consume news than sports or video content. And rates of consumption of print haven’t changed in four years, Jupiter says.

Without a doubt, online video consumption is getting to be quite mainstream. Last year, 22 percent of Americans and 11 percent of Europeans reported watching video regularly, with 18 percent of French respondents saying they do so regularly, says Jupiter.

Overall, the video audience has doubled since 2003, and Jupiter estimates viewership will double again by 2011.

But something might have happened over the last year. A recent survey by the Pew Internet and American Life project found that 57 percent of all Internet users, and 57 percent of users between 30 and 49, have watched online video. In the oldest age demographic, 39 percent have watched an online video.

Possibly 10 to 18 percent of older users report watching video every day, the Pew research finds.

About a quarter of younger users between 15 and 24 say they watch online video regularly and are more than 12 times more likely to watch video as users who are 55 or older. That doesn’t necessarily mean those viewers have substituted online video for legacy TV, though, as reported TV watching hasn’t changed.

The intensity of involvement might be questionable, however. About 27 percent of users say they regularly multitask, using multiple media at once.

And while some surveys suggest communication activities are decreasing, Jupiter researchers say users “spend most of their online time communicating.” Compared to dial-up users, broadband users are 57 percent more likely to use email regularly, 147 percent more likely to use instant messaging regularly and are 125 percent more likely to blog.

More than 10 percent of European users visit social networks regularly and more than 40 percent visit such sites daily. In the U.S. market, use of social networking sites is spreading to older age groups. About 35 percent of social network users are between the ages of 35 and 54.

The thing about social networks is that they are in many ways substitutes for other activities such as email, instant messaging, texting, calling or entertainment sites and applications.

And while most new online activities are disproportionately engaged in by younger users, just about every new type of activity is being adopted by older users as well.

Big Future for Location-Based Services?

Location-based services might not be a big mass market business yet, but it seems almost inevitable that they will be. You don't get the likes of Nokia and Google placing such big bets on location-based services without something developing.

ABI Research expects personal navigation devices (PNDs) will grow to a global sales volume of more than 100 million units by 2011. While dedicated PNDs will remain the preferred form-factor for use in cars, GPS will increasingly be an expected ingredient in handsets, portable media players (PMPs), ultra-mobile PCs (UMPCs), and other mobile devices, ABI forecasts.

Handset-based GPS will grow strongly in North America, reaching a sales volume of 21 million units by 2012, ABI Research forecasts.

In-Stat reaches very similar overall conclusions, though it adds digital cameras and even handheld games to the mix of devices expected to include GPS. In-Stat predicts that sales of mobile devices with integrated GPS will grow from 180 million units in 2007 to 720 million units in 2011.

In fact, mapping-related and location-related Web apps might be more commercially attractive than entertainment was expected to be. For starters, mobile Web advertising revenues in 2011 are expected to be dominated by Web and search. In fact, Strategy Analytics estimates that about 76 percent of all mobile advertising will be generated either by Web apps or search.

All of that dovetails with Google’s thinking about the advertising potential of the mobile Web. And the point is that if consumers find location-based Web apps attractive, and there is a robust advertising support model, carriers are bound to see big increases in broadband service plans, even if they don’t see similarly robust demand for walled-garden enhanced services.

Orange UK: Still Looking for Killer App

Mobile Web appears to be the most-frequently-used mobile app, according to new data from Orange U.K.(France Telecom).

Orange U.K. has 1.4 million broadband wireless customers, but the single most-used application is text messaging, which doesn't require broadband access. Orange U.K. customers send or receive about 71 text messages a day (more than 2,000 a month) but just about 4.3 Multimedia Message Service (MMS) messages a day (129 a month) for users who take advantage of MMS, and most do not.

About 58 percent of Orange U.K. customers can use MMS and six-month usage growth was 37 percent.

In the mobile search area, Orange saw about 250,000 repeat visitors each day, on a base of 1.4 million users. One might therefore estimate that about 18 percent of the base uses mobile search daily.

Orange users downloaded about 7,680 games a day across the user base, up about 3.4 percent over the last six months. Music downloads grew about 15 percent over the last six months to about 3,280 a day.

Orange mobile TV usage is said to be growing at double the management forecast, but one suspects the numbers still are fairly low, as the actual numerical results were not released. Mobile video clip downloads averaged 5,211 a day.

Downloads of logos, wallpapers and pictures averaged 3,233 a day. On the other hand, users are uploading about 23,333 photos a day to online photo albums.

So far, the story would seem to be consistent with what many would have expected: lots of niche applications but no single “killer app” beyond text messaging, which doesn’t require a 3G network. Orange U.K., like other mobile service providers, remains in a “throw it on the wall and see what sticks” mode, watching to see what apps are most compelling to users of 3G services.

So far, no other mobile carrier has discovered the elusive application that users intuitively understand and that is capable of driving 3G access. Right now, that’s the point: keep experimenting.

So far, one would have to conclude that mobile Web usage is the leading app, in terms of daily hits.

No EchoStar Purchase for at&t

at&t appears to have decided not to buy EchoStar to jumpstart its TV business, as it has boosted its dividend and launched a stock buyback program.

In total, at&t might spend roughly $17 billion in 2008 on dividends and buybacks, consuming most or all of the cash its businesses are likely to generate, leaving little to finance a purchase of EchoStar.

at&t also plans to expand U-Verse to cover 30 million households by 2010 in the 22 states where AT&T is the main local-phone company, up from an earlier target of 18 million households.

Broadband access strategy might have played a role in the thinking as well. By speeding its TV capabilities, at&t automatically creates a better network for high-speed access as well.