I’m gazing into the crystal ball to make some predications and observations about what we can expect in 2010 in the telecom and IT markets.

1. Although we aren’t out of the woods yet, U.S. business and consumer confidence is growing and should reach a peak about the third quarter of this year. However, attempting to guess the level of corporate or consumer spending is a dicey business because there are multiple factors that go into purchasing decisions.

2. I’ve been hearing that there is pent up demand for technology (both software and hardware) that will drive new purchases in both SMB and large enterprise businesses. Regarding pent up demand for technology, my gaze says that this will only have a small impact on spending trends in 2010. We heard similar wishful thinking in the years following the technology bubble and subsequent telecom bomb of the early 2000’s. Historically, pent up demand had no impact on business spending patterns then, and I suspect it will have little impact now in 2010.

3. Lessons learned. During our recent economic down-turn both companies and consumers have learned to make do with less. As a matter of company survival, projects and improvements have been shelved or cancelled all together. The net result is that businesses have learned they can protect profits by tightly controlling the bottom line when growing the top line is difficult (back to Business 101). This means that increases in spending will be slow in 2010 and largely driven by efforts to branch out into new markets or to increase competitive advantages.

4. Products and services that help businesses and consumers save money on essential services will continue to do well in 2010. Good money can be made by those who figure out how to deliver the things we can’t live without for less than we’re already paying. For example, AT&T has recently asked the FCC on the behalf of RBOCs around the country (and itself of course) to stop maintaining the country’s public switched telephone network (PSTN). AT&T says it wants to focus its maintenance efforts towards new fiber optic infrastructure that reaches further and further towards the end customer. In the near future look to see neighborhood micro-cell sites designed to service a customer base that isn’t driving between cell towers. This type of phone service can be installed for a fraction of the cost of trenching and running copper lines between homes, pedestals and central offices.

5. The demand for DSL technologies (ADSL, IDSL, VDSL, etc.) will decrease as increasing demand for faster Internet services push beyond what copper lines can deliver even with new modulation/DSP techniques. During 2010, the preferred Internet delivery methods will be fiber, digital cable TV and satellite systems.

6. Improvements in VoIP over wireless technologies will come this year, making it more practical and cost effective to deliver last mile access for VoIP and Internet services.

7. Last mile wireless technologies with fiber runs between pedestals and central offices will be the savior for America’s aging PSTN infrastructure.

8. Wireless Internet services owned and operated by municipalities will disappear this year as the cost of maintaining such systems increase beyond what local governments can afford.

9. In 2010, VoIP is no longer considered new. This year VoIP is a mainstream technology and simply is the way phone systems and voice services work.

10. Green was good in 2009 and saved money too. Look to see green technologies such as virtualization to do very well in 2010.

11. Late in 2010, 1 gig Ethernet within the data center and enterprise will begin to look slow as manufactures release 10 gig and 40 gig Ethernet products.

12. Software applications that merge office automation with business communications (both VoIP and cellular) will gain greater acceptance in 2010. However, due to business financial constraints all that Unified Communications promises to deliver will not be fully realized this year.

These are the changes in business infrastructure and focus that I am seeing for 2010. Do you agree? What other areas of change do you anticipate in your firm in 2010?

Is your company taking advantage of virtualization technologies? Has the company explored the advantages of communication virtualization for the contact center? This post summarizes how virtualization of resources via an intelligent, enterprise communication architecture can deliver eye-popping returns that even the boldest of system sales person would not claim.

Most telecom solutions providers tout savings such as reduced long distance and telco expenses in traditional tactical (OPEX-reduction) business cases. Most of my blog posts aim to elevate communication investment decision making to the strategic level.

One of our clients delivers broadband service to over one hundred cities, with most calls handled locally in small contact centers within the service areas. The customer care leadership recognized that customer service reps skilled at “saving” a cancellation request were rare. When each service center operated on its own, the likelihood was very low that a cancellation request would be matched up with a customer service representative (CSR) with the skill to turn the caller around. The net present value of each subscriber won or lost is nearly $4,000.

The virtualization concept, in this scenario, refers to unifying all of the small contact centers to appear as one set of resources. A short self-service menu picked out nearly 90% of intended cancellation requests. These calls were routed to those select CSRs proven to be capable of retaining subscribers. The save rate tripled from one out of four to three out of four. Put another way, retention rates improved from 25% to 75%. Based on a conservative rate of $3,500 value (NPV of net cash flows) per subscriber, the aggregate value of virtualizing routing calls based on skill set was greater than the entire capital cost of deploying a distributed (VoIP-networked) communication infrastructure.

Allowing customers, partners and even employees’ quick access to the right resources is applicable to nearly all businesses. While the client above is in a heavy customer service (“call center”) industry, all enterprises must improve the ability to communicate with the right resources quickly and on the first call. Being able to problem solve, using the best media, e.g. voice, text, email, IM, video as selected by the customer, is the business value proposition of unified communications.

The moral of this story is that the success described above is an obvious lesson in how communication technology investments aid in the retention of customers. Immediately matching the right resource to a valuable customer scenario was easily quantifiable … Businesses must be proactive in empowering high value customers, knowledge workers, and business partners to collaborate with them on their terms. That takes planning and forward thinking, moving beyond yesterday’s staid communication and information management tools. If your firm doesn’t, your competitor will.

What are your thoughts on telecom virtualization and skills based routing? If you found this post useful, please leave a comment, share with your peers, or subscribe to the news feed to have my future posts delivered to your news feed reader.