Back to the future. At Cantech Letter, we spent much of December rewarding the best of 2011. This resulted in Ottawa’s MOSAID winning 2011 Canadian Tech Stock of the Year, and crosstown rival Jim Skippen of Wi-LAN taking home the award for Canadian Tech Stock Exec of the Year.
Today, we look forward. Every year, Deloitte Canada’s Duncan Stewart Director, Research Technology, Media & Telecommunications, Life Sciences and GreenTech, criss-crosses the country on the TMT Predictions tour, examining which tech trends will dominate the next twelve months.
This year, Deloitte has come up with six trends they believe will dominate the year in technology. We take a look at each, and offer a Canadian tech stock that stands to benefit from the trend.
1. Hard Times for the Hard Drive: Solid State Storage Surges
To date, most storage used in our devices and in large data centres has been on hard disk drives. These drives have become enormously efficient, delivering reliable storage at about ten cents per gigabyte. Today, at a price of dollar or more per gigabyte, solid state storage does not compete with hard disks on price. Yet Stewart estimates that this year 10% to 15% of data centres will move to solid-state drives. The reason? Solid state storage is all silicon, with no moving parts. Data centers need to consider not only the average storage costs, but the electricity cost for spinning hard drives and power for air conditioning to cool down the deceives. The energy savings extends to small mobile devices, 80% of which use solid state storage, increasing the battery life of the devices and helps them boot up instantly.
Canada’s largest IT stock, Montreal’s CGI Group (TSX:GIB.B) made a huge commitment to the cloud in 2010, and more particularly to providing green data centres. In 2011, CGI won numerous contracts with the US government, such as November’s agreement with the US Department of Labor to deliver a cloud-based case-and-content-management platform. As the cost of solid state storage continues to fall, CGI’s large new data centers should become less expensive for the company to operate.
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2. It Takes Two to Tablet: The Rise of the Multi-Tablet Owner
Your iPhone may be able to do a thousands things, but Deloitte believes that the larger trend is not about the covergence of technology to one device, but each of us owning more devices. Deloitte thinks 5% of all tablet owners will have two tablets. And despite the fact that smaller tablets haven’t sold well to date, they believe sales will be driven by more specialization, more sizes, powers and price points as well as the razor blade model, in which some companies will take losses on the device and recoup the money elsewhere. Deloitte even coined a phrase for this phenomenon “Scatter Cushion Computing” describes households with more connected devices than places to sit.
Burnaby’s Glentel (TSX:GLN), the agnostic provider of wireless devices, occupies a powerful place between consumers and manufacturers. Under brands like Wireless Wave and Tbooth wireless/la cabine T sans fil, the company operates 304 stores across Canada and 177 retail locations in the United States.The purchase of US-based Diamond Wireless made Glentel one of the largest multi-carrier retailers in Canada.
3. Ambient Radio Frequency Power Harvesting: A Drop in the Bucket
If you’ve ever been one of three people huddling around a plug at an an airport terminal, you know innately that increased usage of wireless devices means a never ending thirst for power to charge them. So what about harnessing Ambient RF, the radio frequency energy that is all around us to trickle charge our BlackBerrys? Stewart says this is a nothing more than a pipe dream. Using current antenna technology to capture these signals, it would take about 67 years to charge your phone, and it isn’t going to get better any time soon. Stewart likens refilling your cell phone with AR Frequency to refilling your pool with a teacup.
If Phil Sustronk, CEO of Pure Energy (TSX:PEV) is right, his company will help usher in an era in which you can throw away your cumbersome and numerous chargers because soon they will be seamlessly integrated into everyday life. Pure Energy says it is the first company to offer commercially available wire-free charge pads and accessories that can work with multiple devices across multiple brands. Pure Energy enjoys a growing network of licensing partners and distributors with products now sold in over 12 countries.
4. Billions and Billions: Big Data Becomes a Big Deal
Deloitte estimates the worldwide market for Big Data is about $1.3 to $1.5 billion dollars, a relatively small market for such a big name. So why does it matter? Duncan Stewart says Big Data, a catch-all phrase for organizing giant databases and producing useful info about customers in real time, allows multinationals to be far more efficient, and will therefore experience tremendous growth. Stewart says as many as 190,000 skilled big-data practitioners will be needed in the next five years in the US alone.
In the past few years, Waterloo’s Open Text (TSX:OTC), a leader in enterprise content management has acquired a diverse portfolio of content processing firms, including RedDot, Metastorm, Nstein and Captaris. Enterprise Content Management is used to organize the mountains of data that large companies have and walk the regulatory and security issues associated with making this data available to employees and the general public whether through internal means or through the cloud. As Eric Barroca of Tech News World wrote recently “Not all content management practitioners and information management professionals know about “Big Data”. However, he says “…developers are paying close attention. So are IT decision makers, many of whom now question their commitment to specific technology providers. 2012 will go a long way towards revealing whether Open Text can be a Big Data Player.
5. 3D Printing is Here – But the Factory in Every Home isn’t Here Yet
First the good news: 3D printers are here to stay. The bad news? Far fewer than 1% of us will even set eyes on one in the next few years. 3D printers are expensive and have their limitations. Want to 3D print a pair running shoes? You’re out of luck; too many different materials. How about a plate? You could, but buying a plate that is produced in a factory in a run of a hundred-thousand will cost you far, far less. 3D printing will, however, be good for the prototyping industry and for some industrial applications, such as producing small metal or plastic parts.
Vancouver’s PNI Digital Media (TSX:PN) develops and markets the PNI Digital Media Platform, which helps the world’s largest retailers to offer personalized products such as photo prints, photo books, photo calendars, posters. Because the price of 3D printers will be prohibitive for years to come, the services for consumers will most likely be provided by a retailer in PNI’s network.
6. Consumer Tech Demand Defies the Economic Headwinds
Deloitte says concerns about the global economy haven’t hurt the demand for consumer technology, and they’re unlikely to start doing so in 2012. The reason is value. Stewart points out that, in real dollars, a top of the line television in the 1970’s cost $1800. Today, he says, that money would buy two forty inch plasma TV’s, two netbooks, two seven inch tablets and three smartphones. And you’d still have money left for dinner. Deloitte says competitive big ticket items such as cars and trips cannot compete in a recession because the the entertainment cost per hour of enjoyment simply does not begin to compare.
With new devices operating on a new platform rolling out midway through this year, Research in Motion (TSX:RIM) needs the rising tide to continue to lift all boats throughout what the company is calling a transition period, and its harshest critics are calling its death throes. New CEO Thorsten Heins points out that only 20 percent of U.S. BlackBerry users have the company’s latest phones, which he believes are competitive with rival smartphones. Heins says one of his goals is to regain BlackBerry market share amongst US consumers.