Not being one to make outlandish predictions, we felt that at this beginning of a new and exciting year, in which IT and communications is now well and truly on an upward trend again, we should summarise some of the more obvious trends. We believe that there are a number of areas which are virtually a lay down misere, and which the dim-witted would be foolhardy to ignore.

Media

We have been saying from the get go that a decline in print media is inevitable, as is the rise of digital online media. Our first story on that subject talked about how the telephone directories business will soon be history, supported by the fact that one of the two printing contractors for Telstra White and Yellow Pages, McPherson's Limited sold out its contract to the other contractor PMP.

In that story, we extrapolated the trend to predict that the newspaper business will before too long go the way of telephone directories. We pointed to the fact that IT jobs advertising had all but disappeared from print media were almost exclusively online. A couple of days ago, our views in this regard were further supported by a report from a leading heading hunting firm, E.L Consult, which found that executive recruitment has now shifted to the online space and away from print, no doubt causing great consternation at high-end newspapers. Given that the cars and real estate advertising markets have now shifted largely online, one has to wonder what's left to advertise in the comparatively expensive daily print media. It is no wonder the leading online jobs board Seek intends to float on the ASX.

Given this trend, look to a further erosion of the newspaper advertising market, accompanied by a corresponding rise in the online advertising space. With the decline in prices of online technology, also look to an increase in internet-enabled LCD screens replacing newspapers at your local coffee shop.

The PC market

IBM has already flagged what is the future of PCs when it sold its business to a Chinese company. The PC is now a true commodity item and there is no room for middle players, a fact that Dell cottoned onto a few years ago. Even the final holdout, HP, has signalled that the PC market is no longer a viable high-tech business, by joining its PC and printer divisions (another commodity market).

Within five years, PCs and TVs will meld into one low priced consumer item for the home, made almost exclusively in China and other low cost locations. Dell, which has developed its supply chain business delivery model to fit this trend, will be a major player, while IBM and HP will probably disappear from this space. A question mark also hangs over the future of notebook players like Toshiba and Acer, as Chinese companies enter the market with accompanying downward price pressure.

In the business PC market, companies like IBM, HP, as well as host of other service providers will play predominantly support and facilitation roles. They may supply PC products with their badges on them but they will be in effect value added resellers rather than original equipment manufacturers. The OEMs will be Chinese.

Open Source and Microsoft

Open source systems, such as Linux, will continue to win business away from the expensive Unix platforms at the server end of the market, to the detriment of companies like Sun, HP and IBM. The big winner will be Intel and the suppliers of high-end Intel based hardware – once again look to Chinese companies to play an increasing role as suppliers.

On the desktop, the current dominance of Microsoft will remain for some time but will be eroded in the consumer market space as cheap open source internet capable consumer devices proliferate. The advent of cheap media centre type of devices in the open source space will do much to destroy the near monopoly of Microsoft in the home computer market. In the business desktop market, Microsoft's dominance will last longer because of the cost of migrating legacy systems. However, open source systems will also make inroads into the Windows market, albeit at a slower pace.

Consolidation

The IT downturn has seen some massive consolidations over the past four years – DEC, Compaq, Tandem, PeopleSoft, JD Edwards, not to mention some consulting firms, are no more. However, contrary to many predictions, the next five years should see a slowdown in this area.

Big hardware, software and services players, such as, IBM, HP, Dell, EMC, Oracle, SAP, Microsoft, CSC and EDS will remain, and will be joined by some newcomers. Aside from the online players, such as Google and Yahoo, Indian outsourcers, such as Infosys, Tata Consultancy Services and Wipro will continue to increase their market presence, while we can expect to see the rise of some new Chinese giants. There will still be acquisitions of course but, in general, they will be on a smaller scale. A possible exception is Sun, which is starting to look vulnerable.

Convergence

Look for an increasing prevalence of VoIP capable portable devices. Despite the protestations of traditional voice carriers, cheap VoIP solutions will make their way into the hands of consumers in increasing numbers, while businesses will continue their migration to VoIP networks. VoIP handsets, which are compatible with free internet based VoIp services, such as Skype, will be freely available in electronics outlets within months and will be received enthusiastically. Meanwhile hybrid PDA mobile phone type devices, such as the Blackberry and Trio, will continue to become more sophisticated and more affordable.

In addition, 2005 may well be the year, when the home computer finally becomes the ultimate and sole home communications device, servicing the entertainment, communications (voice and data), information and security needs of the family.

Wireless and Broadband

Australian carriers have been criticised roundly for being unbelievably slow off the mark with the provision of high quality fixed line broadband services. This situation may change rapidly, however, driven by the initiative of wireless broadband carriers, such as Unwired. When consumers discover that they can already or will soon be able to get wireless broadband services with similar performance at a similar price, with similar reliability to current fixed line services, carriers will be forced to up their fixed line service levels and drop their prices. Look to 2005, when Australians start to get access to real broadband services.

IT Jobs

The dire predictions of some recruiters that IT as a career path is finished will sound hollow before 2005 is finished. In fact, there is likely to be a skills shortage – a real one this time. Gartner has predicted that IT spending will increase at large companies worldwide by an average 2.5%. However, at all the smaller, fast growing companies this figure is more like 7 to 8% (we got that from Gartner too). Given there has been a virtual freeze on IT spending since 2001, this adds up to big projects and plenty of them.

Contrary to popular belief, the majority of big projects will stay onshore rather than go offshore. Major companies are still wary of the risks involved with large scale offshoring. The geek will come back into favour as projects starved of skilled resources will seek people with real IT skills rather than presentable appearances and affable personalities. There will also be a shortage of IT graduates in 2005, as more than half the students will return to their homes abroad upon finishing their courses.