Looking forward into 2010 is far more enjoyable than looking backward into 2009. What can we expect from the new year? As always, technology will obviously advance and traffic will grow. But beyond that, here are a few thematic predictions I saw floating in my Crystal Ball:
- What didn't sell in 2009 will try again in 2010: e.g. Qwest longhaul and Sprint wireline. Both assets were rumored to be involved in transactions last year, with high profile rumors dominating the headlines for part of the summer. With the financial markets closed and valuations so low, such sales were pipe dreams at best and of course nothing happened. However, 2010 looks very different, and I think we will see these rumors return as potential bidders take more serious looks at assets.
- Metro fiber and the financial markets will discover each other. Like colocation, the metro fiber business has been growing stronger by the quarter and its value proposition has been blossoming like no other. But other than at Zayo, substantial amounts of affordable money for expansion have not flown into the sector. Yes there has been some, but mostly for specific projects rather than long term strategy. This is the year when the financial guys will figure out that there is real money to be made in a major expansion of this business, and the metro fiber guys will figure out that debt is not evil when there is visibility.
- Cloud computing will remain foggy. There will come a day when, like VoIP now, cloud computing is ready to truly topple the technologies of the day. But this year we will mainly see lots of PR as companies of all sizes jostle for position in a marketplace that still defies accurate definition. Of course that won't stop the stock markets from playing 'tackle the guy with the ball' every time a web application remotely connected with the cloud has an outage.
- The complaints about AT&T's inability to handle iPhone traffic will spread to other carriers. By promising LTE prematurely in order to counter the attack of WiMax and stoke the demand for mobile broadband, wireless carriers worldwide now have a year or more in which to explain to their customers why it isn't here yet. It doesn't really matter whether it's Google Android or iPhone, demand for real wireless data speeds is here now and carriers aren't ready to satisfy it. The whining about bandwidth hogs has not even begun yet.
- CDN pricing will deteriorate further. In the third quarter, Akamai apparently cut pricing and has been seeing substantial success at the new levels. That virtually forces some sort of response from the rest of the sector, they must either cut their own pricing again or find something else to sell by expanding into value added services - or both. Additionally, IP transit pricing was pressured in the second half of 2009 overall, and while the linkage between IP transit and CDN pricing is not that tight, there is a relationship there. Pricing pressure will continue to be a story for the sector in 2010.
Do you have a prediction for 2010? Whether it is general or very specific, share it in a comment below and I'll give my own take in response.
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