Forecast ’06: Major Tech Trends and Companies to Watch

We got the bad news out of the way last week when I highlighted four companies I see as likely to go into decline next year. This time let’s focus on the major technology trends coming in 2006 and point to some companies you may not have heard of that should benefit from these trends, both corporate and consumer.

Mass Customization

For the last century mass manufacturing lines were king, resulting in large numbers of virtually identical products. This remains the case in many industries; product models contain the same components and look more less identical to one another. The initial iPods, for example, were all white, all standard size and very difficult to distinguish from each other. But now, that kind of mindset is changing.

Increasingly consumers want hardware that is unique to them, and companies, too, need new and unique configurations to fit their increasingly unique needs.

This concept came up repeatedly at a recent AMD conference in Florida focused on future trends. Clearly Nokia stands out as a company that understands this trend: One only need look at how they have designed many of their phones to be uniquely customized by users who re-skin at almost every opportunity they get. Similarly, HP, before their deal with Apple to resell the iPod collapsed, brought out an iPod skin kit that buyers could use to make their own custom covers for that popular device.

Small companies like Smooth Creations, mentioned in last week’s column, are custom painting PCs and laptops just as shows on TV like “Pimp My Ride” are showcasing the same thing with automobiles.

On the consumer side, a company called Hannspree is breaking the mold when it comes to personal computers for children. Using a variety of themes ranging from animals to trucks, to sports, to Disney Characters they have aggressively moved in a unique direction at a time when unique is becoming vogue.

For older customers, Voodoo PC has stood out for some time with a unique view that custom is better. Their media-center PC is like no other. Customized colors are the norm with them and they just released their Omen Elementals product which extends the “Lexus” PC concept that Dell showcased with their XPS line one big step further.

On the corporate side, interest continues to build in the concept of the modular computer, which is becoming vastly more practical now that the major PC chip companies including Intel, AMD, and VIA have all aggressively gone after low power, low heat, X86 processors. A modular computer is one that can morph from a handheld computer to anything else, including a desktop or regular laptop computer, just by adding or subtracting accessories. A company who you’ve heard me talk about before, OQO, and one you haven’t, Integral Computing, are working to provide the flexibility that corporations want in a device but don’t yet get from the major vendors.

End-to-End Security Moves to User Authentication

With the Sony rootkit fiasco hot on everyone’s mind and getting worse, new indications that rootkits are now targeting the most secure windows systems have inspired a wide variety of vendors to step up to address these issues.

The concentrated effort is from the Trusted Computing Group whose Trusted Platform Module is increasingly being found in PCs from Lenovo to Apple. This component helps assure that your computer, whether it is running Linux, Apple, or Windows, is getting updates from trusted sources. Security is one way that companies like HP, Gateway, and even Dell are starting to differentiate themselves from one another.

The changing types of threats are pushing a new set of security firms into the spotlight. Sana Security has a unique approach to virus protection and may be the only security software firm with a strong solution specifically targeting rootkit attacks on PCs. Panda Software was also identified as providing a faster response to the massive increase of traditional threats. Panda is a European company that popped up in a market we generally think of as being dominated by Symantec and McAfee. We’ll be seeing a lot more of a third company, Phoenix, as well. They specialize in pre-boot security tools which could be critical in world where rootkit attacks are becoming more and more common.

But it is user authentication that is becoming the incredibly hot topic for the PCs of tomorrow and here one company consistently stands out. AuthenTec remains the leading firm for biometric fingerprint readers. Their product has been showing up in PCs for some time and recently started showing up in smartphones too. With the increase of phishing attacks, Internet fraud, and identity theft, the use of dual-factor authentication is becoming a common requirement for users of Web services. The TPM can be one safety, but a second is needed, and a fingerprint is clearly easier to carry then a security dongle.

Software as a Service: Thin Client is Back but Linux Missed the Boat

Microsoft’s launch of the Windows Live service this year and its plans to launch Office Live service next year highlights clearly an aggressive overall push toward providing software as a service. Even Google is reported to be in this game and we are expecting that company to go after the home market with a Linux-based appliance some time next year. Of course Google will need to do something else, as according to Nielson they have dropped to fourth place in the search wars (Yahoo is number one, and Microsoft takes second and third place, according to Nielsen).

The big heads up, however, came with the move by Cisco to buy Scientific-Atlanta. This combination could result in the killer platform for the digital home if Cisco can pull off the most difficult merger in its history.

Another company that that has suddenly hit the digital home radar is Digital Deck which is staffed by a bunch of ex-TiVo executives. TiVo’s platform was based on Linux, but the first thing the Digital Deck folks did is switch to Windows. But they didn’t do Media Center– they did embedded Windows, making this a thin-client device and the only one that effectively moves existing multi-media (music and video — including DVD video) around the home today. It is also interesting to note that they use the VIA processor — not one from either Intel or AMD.

In the corporate world, HP has taken the lead position in general business equipment from IBM now that Big Blue has exited the PC business with its sale of the unit to Lenovo. Now HP offers PCs and all flavors of thin-client devices. The hot new flavor is PC blades, believed to be the most secure type of PC deployment in the market.

A small company to watch in this area, Clear Cube, was the founder of the PC blade concept and partnered with Lenovo, which now builds what many believe to be the best laptop computer in the professional market: the ThinkPad.

One other small company stands out in this space, Ardence, whose product allows the entire software image, including the OS, to be hosted. This offering is used in Dell’s diskless workstation solution and in HP’s ultra-thin client offering. In a world that increasingly doesn’t want anything on the hardware that isn’t supposed to be there, Ardence seems to have a product that stands out and should be worth watching in what is likely to be a world where, increasingly, software is a service.

Home Studios Displace Home Theaters as the Next Big Thing

One of the biggest trends out there in the consumer arena is the make-your-own-music concept. Increasingly disenchanted with the hostile attacks by the music industry on its own customer base, that base is beginning to revolt by choosing not to buy new titles — and/or making their own music. Over the last year I’ve heard from more and more folks who are getting excited about making their own music and building in-home music studios. This is becoming so popular there is even a “PC Recording Studios for Dummies” book available.

Additional demand has been stirred by hit reality shows like “American Idol” which has promoted the idea that anyone can become a star. Those that want that big break now have Internet services like Mercora to help them reach fans that would have been out of reach before the Internet.

While Apple really fueled this trend with Garageband, most don’t have Apple machines and a company that can deliver solutions to both platforms has become vastly more interesting as a result. M-Audio, known for their professional lines, has launched consumer products targeted at this emerging market. The only company in the segment that is fully staffed by musicians and has complete professional and consumer lines, this firm would seem well poised to ride this new digital entertainment wave. The ability to create music is more compelling than the ability to watch movies which is why I think, over the next several years, home studios will flourish while home theaters will wane.

Gift Idea #2: The Gift of Song

It is getting closer to Christmas and you are running out of time for shopping. So, let me suggest a packaged product that can teach a user how to sing and won’t break the bank. Selling for US$80 at Amazon.com, Singing Coach Unlimited by Carry-A-Tune Technologies has over 10,000 tunes to help your emerging American Idol learn to carry a tune and perhaps learn to stop scaring the kids and pets. This may be more of a self preservation gift as I know many who have thought the world was ending when one of my relatives broke into song. (We won’t mention names, because I have a New Years’ resolution to survive).

The product has an easy lesson style and is fun for both kids and adults. It comes with a headset (one of the first things I’d upgrade) and allows your special someone to experience the wonders of improving his or her own voice.