I’ve referred to the convergence of computing and communications many times in the past, usually remarking that it wasn’t happening. After many false starts, it began to happen with the Internet. In theory, that should have brought the telco industry and the computer industry together, but it didn’t. The telco industry went off on a wireless binge, which is still continuing, as they pursue business models with a limited life span (for more details read this).

But in the last few years the communications technology providers have begun to read the tea leaves and gradually move into convergence with the IT industry. We can see this happening before our very eyes with “unified communications”, where we find IBM and Microsoft in competition and co-opetition with Cisco, Avaya, Siemens and Nortel (for a deeper discussion of unified communications, click here).

1. In 2008 Google will enter the unified communications market.

I already mentioned this likely direction for Google in Forecast 2008: #4, but from a Google perspective. I expect Google to introduce a raft of communications capabilities and to frighten all of the above vendors when they do. Google will not stay out of this market, so the other vendors will have to find ways to collaborate and compete. Until Google shows its hand it won’t be possible to say which vendors have most to fear. right now I’m not sure even Google knows what it intends to do, other than get involved.

2. Cisco, Siemens and Nortel will start to “go soft”.

I would have included Avaya here, but it is already moving to achieve a software center of gravity. Last year Siemens and Nortel started to make loud noises about SOA, clearly intending to follow Avaya into the CEBP market. Cisco had already made a move of a kind by announcing SONA and acquiring Metreos and Audium. The problem for all of these vendors (Avaya incuded) is that moving the center of gravity of a company isn’t easily achieved. It is most effectively achieved by “force majeure” - which is lucky because this sector of IT has it, in spades.

The “force majeure” for these companies is that the hardware layer of their products is gradually becoming a commodity. They were protected for years by the fact that the digital signal processors (DSPs) that process communications data in real-time are not like central processing units (CPUs). If they were, the communications hardware layer would already be in the computer (i.e. the network is the computer, because the computer ate the network) rather than connecting computers together (i.e. the network is the computer, because it’s a grid of computers).

This will happen in time, by the way. Why wouldn’t you simply include a router in every computer. (Think mesh networks). This Cisco’s big challenge. What happens to Cisco’s revenues when VPNs become irrelevant because of SSH and routers become features rather than devices?

With the advent of SIP (SIP is to communications as SQL is to databases) and it has arrived, another step towards hardware commoditization has occurred - and as hardware commoditizes, the value “goes soft”. (Of course there is always room for one or two vendors to remain commodity manufacturers)

You would think, by the way that all of this would play into the hands of IBM and Microsoft, and it might, but I’m not sure that either of those giants truly understand the real-time nature of communications.

Note: There are 7 forecast postings for 2008. The others are:
Forecasts for 2008: #1 Chips & Virtualization
Forecasts for 2008: #2 The Server
Forecasts for 2008: #3 The PC Market
Forecasts for 2008: #4 Google and the Cloud
Forecasts for 2008: #6 The Application Layer
Forecasts for 2008: #7 Security

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