For the tech industry, 2014 will mean out with the old and in with the new.
The shifting technology landscape, which is favoring cloud computing and Big Data analytics, has fostered a new set of influential tech companies and forced old-guard tech giants to rethink their businesses.
The big trends of 2014 will build on the paradigm-changing technologies of recent years, including cloud, mobile and social.
What follows are five big trends to watch in the tech industry in 2014.
Greater corporate use of cloud computing services will drag down revenue growth for information technology hardware and software suppliers in 2014, Barclays said in its year-ahead outlook.
“We believe the deflationary impact from the cloud ($1 spent on cloud infrastructure actually results in several dollars coming out of other IT end markets) should prevent IT spending from growing meaningfully in 2014 and 2015,” Barclays said. “We believe global IT spending will remain challenged in the lower-single-digit growth range.”
The cloud computing shift is boosting the fortunes of cloud service companies such asAmazon.com (AMZN) at the expense of traditional tech hardware and service outfits like Hewlett-Packard (HPQ), IBM (IBM) and Oracle (ORCL).
Companies and other enterprises increasingly are paying for computing resources as a service over the Internet rather than buying their on-premise IT hardware, including servers and data storage gear. The desire to save money and boost efficiency is behind the corporate adoption of cloud services.
Meanwhile, pricing battles are going to get more intense this year in the infrastructure-as-a-service market, industry officials say.
Google (GOOG) and Microsoft (MSFT) are going to compete aggressively with Amazon Web Services for market share.
“Not only is this a battle for market dominance; it reflects the nature of cloud computing: a capital-intensive industry in which maintaining high utilization is critical,” Bernard Golden, CEO of consulting firm Hyper Stratus, wrote last month in CIO magazine. In 2014, “the cloud computing market will look a lot like the airline industry — great for customers, but perilous for providers.”
Price battles could turn into price wars in the cloud infrastructure market, according to Derrick Wlodarz, owner of technology consulting and service company Fire Logic of Park Ridge, Ill.
“The past few years have been nothing but posturing by the big boys,” he wrote on Beta News last month.
Electric meters, sensors, surveillance cameras, cars and other devices will be connected to the Internet and automatically do things on behalf of humans, Perkins said: “This Internet of things also means the cloud is more important than ever. The cloud provides the central hub for all of these devices, as well as context about the user that can be tapped into and shared to make the product or service better.”