10 must-know technologies

The Wall Street Journal

What do high-definition TV, flat-panel displays and utility computing have in common?

You ignore them at your peril.

These are three technologies that have crossed the line -- from the possible to the real, from the future to the present. They technologies have leapt from being a cool idea to being suddenly hot.

They are, in other words, technologies you need to know about.

Glover Ferguson, chief scientist with consulting company Accenture Ltd., compared the process to spontaneous combustion: A pile of greasy rags sits in the corner, occasionally emitting a wisp of smoke before it suddenly bursts into flame.

"You're not quite sure what is the tipping point," he said. "But when it gets hot, it takes off."

So how have these 10 technologies made that leap?

Several pieces must come together.

  • Prices must fall. DVD players, for instance, became the fastest-growing consumer-electronics product, thanks to rapidly falling prices -- from an average of about $500 a player in 1997 to as low as $70 during the 2001 holiday season. And look at what has happened to prices for flat-panel computer monitors: Dell Computer Corp., for one, is selling 15-inch flat-panel monitors for as low as $275, compared with $700 two years ago and $2,000 in 1997.
  • Consumers need to see, and understand, the value of the product. Personal video recorders, such as TiVo and ReplayTV, have been slow to catch on because marketers haven't been very successful at explaining their advantages over the ubiquitous VCR. Still, a steadily growing cult of PVR users are continuing to recruit new members, largely through word of mouth and helped by regular promotions. TiVo said its subscriber numbers have been doubling about every year and are expected to hit one million by the end of this year.
  • It helps to have heavyweight backers. Linux, the open-source computer operating system, might have remained a tool of hobbyists and software rebels had it not been embraced by giant International Business Machines Corp. Now, it's the leading edge of an open-source revolution that is shaking up the established software market. An infrastructure needs to be in place. Just as the Internet didn't take off until the personal computer had made it into a critical mass of homes and offices, high-definition television for years suffered from a chicken-and-egg problem: Consumers won't buy the expensive sets until there's enough high-definition programming, and networks won't put on the programming until enough people have sets. This year, though, Walt Disney Co.'s ABC television network broadcast the Super Bowl in a high-definition signal and plans to do the same with the National Basketball Association finals. Its sister network, ESPN, the cable-sports network, recently started a high-definition channel.
  • The new technology has to work better than anything it hopes to supplant, with a minimum of bugs and hassles. Clayton Christiansen, a professor at the Harvard Business School, told of how voice-recognition software failed to catch on as a substitute in office stenography pools. The software, he noted, was slower, harder to use and less accurate than the technology it was trying to replace: typing. Similarly, utility computing -- where companies buy computing power as needed, as they do with electricity -- needs to demonstrate that it can work as reliably as the in-house computer systems it seeks to replace before it will be widely adopted. Perhaps the best current illustration of how the pieces come together is with Wi-Fi, or wireless fidelity, the wire-free way to link computers over short distances and at high speeds to the Internet. Wi-Fi appeals to two rapidly growing groups: those households that have broadband Internet connections and that want to connect multiple computers, and the millions of laptop-toting road warriors who need to log on at the airport, the hotel or the neighborhood coffee shop. It benefits from a steadily spreading infrastructure of publicly accessible Wi-Fi networks. In Manhattan alone, more than 12,000 such "hot spots" exist; few parts of the island aren't covered by one or more. And it has the backing of computer powerhouses Dell Computer Corp. and Intel Corp., which see the technology as way to sell more computers and chips. Prices have declined as the number of users has taken off. Base stations, which communicate with several computers, cost around $120, while the accessories that allow a laptop to talk to the network sell for as little as $29. According to one estimate, the number of home Wi-Fi networks increased 160 percent last year, while the number of business networks rose 65 percent. "It's easy to look at that and say Wi-Fi is going to take off," said Michael Gartenberg, research director at Jupiter Research Inc., a unit of Jupitermedia Corp. of Darien, Conn. While home consumers increasingly are embracing such breakout products as Wi-Fi, TiVo and high-definition television sets, corporate buyers have been more wary about adopting technologies that once again promise -- some would say threaten -- to disrupt the way they do business. They're still digesting some of their investments in big software, hardware and telecommunications networks from the late 1990s. "The business community was so overprovisioned," said John Jordan, a principal with Cap Gemini Ernst & Young in Boston. "It's harder to find breakthrough technologies because there's so much out there." But that doesn't mean the corporate sector is buzzless; several products and services, such as Web services, utility and commodity computing and open-source software, are capturing the interest -- and pocketbooks -- of corporate technology buyers. Meanwhile, as consumers and businesses embrace the latest hot technologies, investors are trying to anticipate them. But knowing exactly where to place their bets isn't as simple as identifying the technology. That's because pioneers frequently don't get to profit for long from their innovations; think of Netscape Inc., which revolutionized the Internet and had an eye-popping initial public offering, but later lost the browser wars to Microsoft Corp. Especially with hardware, prices quickly fall to commodity levels, attracting a host of competitors and squeezing margins. And companies often get dazzled by vast new market opportunities and fail to take the measured steps necessary to nurture the new technology. "It's easier to predict the success of a technology, rather than of the companies offering the technology," said Accenture's Ferguson. "If you could predict precisely what trips the trigger, you'd be fabulously wealthy."
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