'Change' & the Tech Industry

Throughout the past year, the concept of "change" served as a profound metaphor, encapsulating trends in politics, the economy, and other facets of daily life. In a sense, the inauguration of Barack Obama will institutionalize change, at least as the new president sees it. But at a time when uncertainty -- related to the economy, politics, and culture -- is inciting fear and retrenchments across the globe, it is worth considering how change might play out in specific communities and industries. To that end, here are a few issues and areas related to technology where we expect some notable post-inauguration events:

Stimulus project opportunities -- This is likely inspiring post-holiday dreams of sugarplums in a host of IT executive bedrooms and boardrooms, and with good reason. Obama's $800+ billion stimulus package includes some $6 billion for improving broadband infrastructure. Though much of that will be dedicated to underserved rural communities, it still represents a nice chunk of change for wireless providers.

Much is also being said about the need to plan and build a next-generation health care records and IT infrastructure. No arguments here, but given the immense complexities of such an effort, we are not sanguine about its chances. Security is another area that could and should profit from the stimulus package. While security was the watch word of the previous administration, responsibility for many projects (such as improving port security) was foisted onto states and municipalities without commensurate funding. Recent innovations, including digital surveillance video capture and analysis, and ever-evolving RFID technology are likely to play big roles in these very necessary efforts.

Heightened accountability -- With every bit of good news comes a bit of bad. Yes, the economic stimulus package will likely mean more work/revenues for IT vendors. But those projects are also likely to come with some very stout strings attached related to progress/performance.

This is not a bad thing. Consider the reported waste of billions of taxpayer dollars on no-bid contracts for Iraq reconstruction projects (which will likely be the subject of lively Congressional hearings in the coming months). Consider also the failure of numerous post-9/11 government IT projects, including the FBI's "Virtual Case File" program, the Department of Homeland Securitys "Railhead" and "Emerg2" efforts, and the Census Bureau's catastrophic attempt to adopt handheld computing devices. While it is understandable that highly complex technological projects will run into problems, we would caution against assumptions that future missed deadlines, cost overruns, and outright disasters will be given a nod and a wink, and bureaucratically swept under some handy rug. Those who plan to ignore this advice should begin practicing their congressional testimony and perp walking skills.More attitude/less latitude -- The past eight years have seen federal administrators and agencies largely stay out of the way of businesses doing business. That is likely to change and not just in the banking and investment industries, as anyone following the news this past week can attest. After some early digital TV broadcast transition efforts ran into problems and the program providing coupons for digital converter boxes ran out of funds, House and Senate Democrats announced legislation delaying the changeover for six months. Broadcasters complained and Republican Senators blocked the bill, so expect fireworks in the coming days.

But also expect this to be the first of numerous disagreements on technology-related programs and policies. Net neutrality and broadcast diversity are pet subjects of Julius Genachowski, Obama's choice as the next chairman of the FCC. We would not be surprised if the new administration also supports other controversial IT issues, such as repurposing the soon-to-be unused VHF broadcast spectrum for a national broadband wireless network. These and other acts will earn the administration quick enemies among broadcasters, telcos, and cable network operators, but one company's loss is another’s opportunity.

Rebuilding global reputation = changes at home -- The new president has stated clearly that rebuilding the reputation of the U.S. abroad is a key goal of his administration. That will certainly bring political and economic repercussions, particularly in global trade issues and agreements. But we wonder whether building closer ties with allies might create substantial ripples at home. Areas of particular IT interest include intellectual property (IP), privacy, and anti-trust enforcement. IP infringements have for years been a thorn in the side of numerous vendors, especially in China where software piracy is rampant and 4 of 5 programs sold are reportedly pirated. The unusually harsh jail terms recently handed down to 11 Chinese software pirates make one wonder whether China's government was trying to make a preemptive statement to the incoming administration. If so, it will be interesting to see what comes next.

We also wonder whether closer ties with the European Union (EU) might influence the way the U.S. approaches and enforces antitrust and online privacy, both of which languished under the previous administration. Since these resonate with the consumer-friendly approach we’d expect from Obama's appointees, concerned vendors should be watchful until the Justice Department takes a stand on those issues.

There are numerous other government programs where we expect technology to play a major role or exert significant influence, including driving education and job development, setting agendas for research and scientific development, and improving the performance of and access to government officials and processes. Most importantly, we believe that the new president and his administration are well suited to address these many challenges. Barack Obama enters office as the most technologically astute and mindful president in history -- a point illustrated by everything from his highly publicized Blackberry "addiction" to his campaign's masterful use of the Internet and new media. In essence, technology fundamentally helped to shape Obama the candidate. Now, President Obama has the opportunity and responsibility to help shape technology.— Charles King, President and Principal Analyst for research firm Pund-IT Inc. , focuses on business technology evolution and interpreting the effects these changes will have on vendors, their customers, and the greater IT marketplace.