After the financial services sector, the industry that’s shown the greatest capacity to innovate with technology has been the gaming sector. (I will pass on what may seem like a glaring opportunity to editorialize.)

A story in today’s NYT profiles smart-phone style wireless gaming devices being introduced in Nevada casinos to allow more frequent betting on sporting events.

Besides the devices themselves, which fascinate me as I look for new wireless items in our lives, the most interesting aspect of the story may be the impact that portability of wirelessly-supported gambling has on sports betting. Which is the enabling of what the gaming firms call ‘in-line’ gambling — betting on the outcome of events within a sporting event, such as a football kickoff.

Once we can do things Anywhere, the likelihood of doing them will rise. Same for shopping, media consumption, and more. To enterprises interested in the Anywhere Consumer, Anywhere devices are More of Everything devices.

Today’s New York Times had a terrific article talking about the challenges facing retailers in managing search advertising during the holidays. While I enjoyed reading the article over my holiday morning coffee, I came away from it thinking that the authors really missed the big story: the Anywhere revolution has fundamentally changed the art and tools of advertising from one done by people to one done by machines.

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Farewell to the Noughties, a decade sandwiched between two crises: The dotcom bust and the current – but sputtering – downturn.  In that time, Europe accomplished much: The Euro was adopted, DSL went mainstream and telcos went NGN.

Not least, consumers woke up to the pleasures of mobile content, although it’s questionable whether MNOs will ever see a fair return for their expensive 3G licenses. Roaming charge crackdowns and market saturation haven’t helped financials either.

Time again to put a nebudchadnezzar on ice? There’s plenty under the tree for 2010:

1. Ethernet will be everywhere. Ethernet is in the LAN, it’s in the WAN, it’s transforming mobile backhaul economics, and it’s converging the datacenter. Fiber remains best, but clever vendors (see Hatteras, Actelis) are delivering copper-bonded Ethernet in the first mile. And new Ethernet exchanges (see CENX and Equinix) aim to speed order to cash with their interconnect services. Want a unifying communications fabric? Well duh!

2. The CDN bubble will burst. Telco CDNs can offer compelling features, but how many service providers can the market sustain, even if video traffic is exploding? Many partnerships are already in place: Tata Communications with BitGravity, Verizon with Velocix, Deutsche Telekom with EdgeCast and Global Crossing with Limelight Networks and EdgeCast. If you’re not in the game now, you’ll need deep pockets to buy in.

3. The cloud’s hot air will expand. Resilient, liquid (and probably Ethernet-based) connectivity is going to save the outage-prone cloud. To invest in cloud services enterprises require robust network as well as applications-specific SLAs, as well as network redundancy, say Yankee Group enterprise surveys. Offering on-demand VPN connectivity to cloud services (on a wholesale or retail basis) could help defuse concerns about their security and resilience.

4. Equipment vendors will want to be your new best friend. The ratio of CAPEX to revenue currently stands at 12.6 percent among European operators, according to Yankee Group analysis. It’s not going to recover much. That’s why European equipment vendors like Alcatel Lucent, Ericsson and Nokia Siemens Networks are on a charm offensive with managed services propositions and aims to transform telco business models. Listen to their pitch. And talk to Huawei:  With a new SDP partner program and growing software division, it’s got more in its arsenal than cheap kit.

5. Smart wholesale will become sexier than dumb wholesale. Get big, get niche or get out. Embrace revenue-sharing models with non-traditional partners. And work mobile angles: International remittances, GRX to IPX interconnect, content transcoding, white-label mobile UC and M2M are among many rich avenues of investigation.

Best wishes for the New Year – and decade – look forward to continuing the conversation!

Consumer research is great. Just when you think you could be smart enough to predict the answers you’ll get, consumers surprise you. Which is the whole point of asking, really.

Browsing the most recent results of our monthly survey of North American consumers about device connectivity, I came across two data points, each interesting enough on its own but fascinating in opposition.

Exploring connectedness in the North American home, we asked about connected devices — the ones we have and the ones we want. Of over 3,000 consumers who own one or more devices among a popular collection of consumer electronics technologies (HDTV, set-top boxes, digital cameras, e-books, PNDs and the like), we asked them if the items they own were equipped with connectivity technology. That is, could they be networked to a wireless router in the home, for instance, or connect to the net directly?

The first surprising result: while most of those owned items aren’t connected, and some are, a good quarter of the responses for each device was “I don’t know.”

It’s OK; I’ll wait while that sinks in for you.

“I don’t know” if my digital camera is connected?  If my netbook, set-top box, or HDTV is connected? A typical “don’t know” response rate for simple technology questions in a panel like this might be closer to 5%. But the lowest “don’t know” response was 17%, for e-book readers. The highest “don’t know” was a shocking 42% — for set-top boxes!

Something is seriously wrong with both the marketing and the user experience for these devices for such a large proportion of recent buyers to be unable to answer this question. I wonder if the very question created confusion for those consumers. They may have said to themselves, “Gee, is it? Maybe it ought to be — that is, if I was smart enough to buy the right one. Maybe I just didn’t notice.” You almost could picture respondents making a mental note to check their device the next chance they get.

The second interesting data came when we asked consumers with specific plans to buy one of these products in the next 6 months whether they would be looking for connectivity as a feature. Notwithstanding the uncertainty about the stuff we have already, the appetite for connectivity came through loud and clear. About 30% of consumers with purchase intent said that connectivity is at least an 8 in importance on a scale of 1 to 10. Including those who gave it a 6 or better, the responses swelled to 60% affirmative. This is consistent with the behaviors many of us have begun to exhibit around technology: we want our things to be as mobile as we are.

[The interesting question then: how many of the consumers who didn't know if their current technology is connected are among those who prize connectivity in the products they haven't yet bought? Stay tuned; that's a bit of analytical finesse we'll do and I'll share in a follow-on post.]

That’s the demand side: enthused but muddled. What about the supply side? I ‘ve railed at the consumer electronics sector for at least a year, complaining about a paucity of device innovation in the face of a looming opportunity to completely reinvent the sector with entirely new devices and experiences.

I’m not alone. I chatted the other day with Steve Tomlin, the founder of Chumby Industries, a guy who is very smart about connected devices and who helped in the preparation of our book. The company recently came out with the Chumby One under the key CE $100 price point, now back-ordered through the holidays. What’s his take on the CE sector’s response to the connectivity opportunity?

“It almost seems as if everyone is waiting for Apple to eat their lunch all over again.” Tomlin’s referring of course to the rumored Apple tablet product.  ”They’re competing with an imaginary device, and assuming they’ll lose badly. And it could be true: maybe people with Kindles will end up looking like dorks whenever that comes out.”

But what about netbooks–this year’s early success story in new connected devices? “I don’t get netbooks. They’re the same as laptops–processor, screen, memory, the same stuff. The important distinctions among consumer devices are not in the components. They are in the use cases–what you expect to do with them.”

His take on many devices is that they don’t enable the passive, sit-back use cases we frequently want. In that context, the netbook isn’t much different from a smartphone, about which he complains, “A smartphone isn’t anything for you at all until you tell it what to be. But a Chumby was designed to be a passive experience. It is not a desktop full of icons waiting for your attention to be useful. When you’re not telling a Chumby what to do, it still knows what to do. You turn it on, and it happily marches along.”

Where are the next opportunities for the CE sector? ”The kitchen. It is the staple idea of all futurama thinking, but there is a real hub opportunity there for photos, the family calendar, recipes, visual voicemail, etc.  And the home phone is clearly due for a complete overhaul anyway– it has hardly changed in the past 10 years while all this evolution has hit the rest of our devices. There are something like 10 million total fixed-line phones out there now, and no one is making money on them.”

What about the car as a platform for more consumer connectivity? “Taxis clearly are an opportunity, and Chumby is playing there. But given what’s happened in the economy and in Detroit, things have slowed down a lot in consumer automotive. So the gestational period for that is beyond my attention span.”

Meantime, may your holidays be filled with all the devices you want–connected ones, of course!

Earlier this week, IBM revealed its financial commitment to invest further in cloud-enabled facilities; building the 80 million ( New Zealand dollar) worth of data center in Auckland, which is scheduled to be completed in 2010, and adding a new research laboratory in Hong Kong for the development of cloud-based collaborative applications.  According to Joe Dzaluk, vice president of infrastructure services at IBM, investing in new facilities is part of the company’s three-year program to update and expand its worldwide network of 488 data centers ( including both IBM owned and client data centers managed by IBM).

From a quantitative point of view, having a total of 488 data centers is already a fairly resourceful asset.  Seemingly, IBM is not investing for quantity purposes.  What is the motive behind the move?  How can the technology giant possibly profit from its infrastructure investment?

IBM is making its bet on two enterprise demand trends, namely data center outsourcing and cloud computing adoption.

Data center outsourcing is not a brand new demand but there is a sign of growing in the mid-sized and large enterprise segments.  As CIOs come to terms with rapid equipment depreciation, increasing power consumption, and surging maintenance costs,  data center outsourcing makes business sense.  Together with the constant pressure to reduce costs and control IT spending, more and more business organizations are turning to IT outsourcers for help.   This is evident in Yankee Group Anywhere Enterprise—Large: 2009 U.S. Transforming Infrastructure and Transforming Applications Survey, one-third of enterprise respondents( with 500 or more employees) stated that 50 percent  or more of their data center resources are outsourced to a third-party provider for management and support.

In bad economic times, cost-savings is an obvious entry point for any emerging technology to get the attention of potential customers. The economics of cloud computing has caught the attention of enterprise customers that are looking for operational efficiency without compromising performance. As the economy has yet to fully recover, costs will continue to play a role in driving enterprise cloud adoption. According to our survey results, 59 percent of enterprise respondents (with 500 or more employees) estimate that more than 30 percent of their internal IT infrastructure (such as servers and applications) will shift to cloud computing services in the next 24 months.

For IBM, the two enterprise trends represent a tremendous growth opportunity.  But still, the technology giant is mindful when making its strategic move elsewhere.  Evidently, Asia Pacific is a region of growing interest for IBM to harness the cloud.

Will Asia Pacific be the direction of cloud diffusion?

The economic crisis proved a major obstacle for consumers, enterprises and network builders, and each has had to evolve to survive. The changes from 2009 will create new opportunities in the Anywhere ecosystem, especially in the areas of cord-cutting, devices, cloud computing and network innovation.

Earlier today, I was joined by my colleagues Jon Paisner, Camille Mendler and Josh Holbrook to unveil Yankee Group’s top predictions for the 2010 communications industry. We discussed six of our eleven published predictions and took questions live from the audience. Check out the webinar replay below. You can also register as a Guest on the Yankee Group Web site to get the full report for free.

The webinar runs about an hour: audio (mp3) and slides (pdf).

With the global recession sending not just companies but public-sector budgets into massive decline, lots of pols want to know what to do to help the major growth engines in their regions spin back up.

My home state is no exception; the meltdown in Massachusetts tax revenues caused a gap of at least $600M in the state’s FY2010 budget, putting us in the top 5 in absolute size of gap when we’re 15th in population. A recent gathering of some of the good and the great in the state’s tech sector, attended by our governor, assessed the burgeoning reach of the digital technology sector in the state’s economy and considered prospects for stimulating its growth.

Massachusetts Governor Deval Patrick admiring my moderating? Or my haircut?

The good news: the state’s tech hub has fared better than other sectors, and by many measures — VC investment, attractiveness to entrepreneurs, more — is the second-ranked state in the U.S. (following of course the state with the biggest budget woes by far).

The bad news: the number of things we could consider doing to help is legion. Participants debated changing state laws regarding non-compete agreements (which personally I believe is a red herring, but that’s another post), the role of the academic sector in creating awareness of the local employment opportunities for students after graduation, and more.

I led the Q&A, but the entire time I just wanted to yell out: “Build out the network!” In my opinion, the expansion of a high-capacity, intelligent network infrastructure is the single biggest contributor to economic productivity we have available to us, either at the state level or worldwide, because it:

1. Brings service work to people in remote locations (where factories may have closed or other options are limited)
2. Attracts businesses to the area that depend on network capacity and speed
3. Helps businesses eliminate physical infrastructure expense
4. Recaptures productivity from workers on the move

Happily, the first question the governor was asked touched on the state’s leverage of federal broadband stimulus funds. The Anywhere Network needs to get to the towns of western Massachusetts just as much as it needs to reach India and sub-Saharan Africa.

I mentioned last month that I thought that Google might launch a net neutral mobile phone to spur the wireless market toward its vision. Well, according to Techcrunch and Google itself, Google apparently gave its employees unlocked Google phones for the holidays to “eat its own dogfood”. If Google sells these phones directly to the public, this promises to be nearly as disruptive a trend to the wireless operators as the iPhone was.

Fortunte notes at least nine ways of looking at this development. The bottom line though is that when others have been giving lip service to creating a more competitive consumer market, Google is actually doing something about it. Stay tuned: this is going to be a big change.

Calling all marketers: How do you sell a network?  While operators fear their offering being reduced to nothing more than dumb transfer of bits, the actual internal complexity of their infrastructure gets more impressive every day. But I’m a geek. That stuff doesn’t lend itself to mass-market messaging.

Talking the other day about the most important attributes of networks, I said they were reach (where does it go), capacity (how much traffic can it support) and intelligence (how much software in the network helps bits move around with other useful stuff to the right places at the right time).

Verizon Wireless is doing a yeoman’s job of talking about reach and capacity. With Google taking over our map consciousness, who’d have thought that it would be a network taking over the use of maps in marketing?

I haven’t seen a network operator in the U.S. or elsewhere yet talk about its network being more intelligent than the other guys’. While networks are indeed getting more intelligent with the addition of technologies like IMS, SDP, DPI and whatever other TLA* I’ve forgotten to mention, it may take another couple of years before operators figure out how to translate those assets into a simple, clearly-articulated marketing message for their clients. So I guess we have to wait for the competitive battle over network IQ.

So what about speed? From gamers to financial services firms, many network users know that they want the fastest possible network. But it might be a case of the positive (going fast) not being as compelling in marketing messages as the negative. Fast is nice — but missing out on something is bad. When offered the chance to pay a higher toll to use a less congested lane on the highway, the most compelling way to get my attention would be to suggest that if I don’t do it, I might be late for my meeting. Put up a clock over the roadway and estimate the arrival time at an exit using the main path versus the low-congestion path.

The way to sell the negative when it comes to network speed, is to talk about latency. But then that’s one of those words we geeks favor that makes normal people’s eyes glaze over.

Akamai, the content and app delivery network people, has struggled with how to talk about this, using words like acceleration. Their messaging includes discussions of latency using lots of facts and figures. Cable operator Comcast takes a softer, more comedic approach, linking slower networks with turtles. These approaches to marketing network speed, or the lack of latency, fall at either end of a spectrum: very techie (which admittedly Akamai’s customers may require) versus very cutesy.

There must be solutions in the middle. The experiences we can all relate to are missing trains and airplanes. The movie image of subway doors closing on the smirking bad guy, just as our hero in hot pursuit rushes down to the platform only to see the train pull away, is familiar yet compelling. Network marketeers need to develop our sense of urgency around the negative impact of slow networks. Missed messages, missed packets, missed trades… lateness means missing out.

*TLA of course stands for Three-Letter Acronym; along with its sibling the FLA, irresistible candy to tech geeks and policy wonks alike.

Dec 7th, Google announced its next step in the journey towards enabling an Anywhere lifestyle for both businesses and consumers. Although trials have occurred over the past year, Google is now launching a national campaign by sending out window decals which contain QR codes to over 100,000 local businesses as part of the Favorite Places program. By scanning these QR codes, consumers will be given detailed directions through Google Maps, read detailed reviews of the merchant and possibly even receive a mobile coupon.

Following upon the recent successes of integrating mobile into the Black Friday shopping experience (see blog post by fellow Yankee Group Analyst Dimitriy Mochanov titled “Retailers Beware! The Mobile Shopper is Here!”), proliferation of smartphones and data packages put these capabilities in the hands of the consumer. With this Google Favorite Places announcement, local merchants do not need to invest in a mobile platform to provide reviews or drive foot traffic into the store. Merchants leverage Google’s investment and do not require infrastructure to drive consumers to their store. However, once merchants offer mobile coupons they will need 2D barcode scanning capabilities at the point of sale (PoS) to redeem the coupon from the handset. Now that we’ve gotten the details out of the way, let’s examine what QR codes may mean for general consumers and merchants.

QR codes can provide value but how much value depends on how merchants use them:
• Directions through Google Maps: In this first iteration, Google is providing a consumer with step by step directions to a store. The problem is that the consumer is scanning this QR code once they are already in front of the store. The value to the consumer here is limited. However by integrating the same QR code within your online advertising? Now Google Maps can provide walking and/or driving directions which becomes a real value add to the consumer.
• Ratings & Reviews: Providing reviews for a restaurant or store is limited when the consumer is right outside. Why not just see if the restaurant is crowded or try to visually see the presentation of the food yourself? However the value here for the QR code is to let the consumer read reviews of the level of service provided and intangibles such as cleanliness that the consumer cannot easily observe from outside the establishment.
• Mobile coupons: A consumer is outside your store and has scanned your QR code, but how do you get them to come inside? You have a captive consumer ready to interact so the mobile coupon is the best option to get them inside. The other options discussed above provide information while mobile coupons provide transactions and revenue. Utilize them.

After scanning QR codes this morning on my 2 year old Blackberry Curve, here are my results (which are unscientific but at least show what an average consumer will be up against):
• Size matters: When scanning the QR codes directly from my computer monitor, the size of the code matters. None of the Google Favorite Places in Boston worked with 3 different app readers on my Blackberry Curve. Once I enlarged the size of the code they worked just fine. It appears that the stickers Google is issuing for merchant windows are large enough where this doesn’t become a problem but is still worrisome for merchants looking to integrate mobile into their offline and online marketing strategy.

• Consumers don’t discriminate, neither should technology: With no common standards utilized throughout the US, app readers work on different types of codes. Consumers don’t discriminate between QR codes, Datamatrix codes, or any other proprietary code but the app readers themselves are not universal for all of the various code types. In the mind of the consumer they think “hey, here’s a funky looking code, I’m sure my app reader will work” and not understand the nuances between the technology. If you don’t believe me, read the reviews in the various application stores. The 3rd party app readers have very poor ratings but it is often not a technology problem reading the codes. Consumers are just trying to read interoperable code types.
• Cameras aren’t a limiting factor: Using a 2 year old Blackberry Curve and an original iPhone (without autofocus) to test out various codes, these older camera’s worked just fine. New phones with high resolution cameras and autofocus should experience even lower failure rates.

A whole host of other issues still combat this industry trying to gain popularity anywhere outside of Japan. For QR codes to become popular inside the US very soon merchants will need to deliver value to consumers, whether that is information based or through cost savings. In the end, the merchants are looking to drive transactions and revenue and the best opportunity to do so is with mobile coupons. These coupons will drive price sensitive consumers to open the door and come inside.