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5 Big Tech Predictions for 2012

Alex Planes
December 17, 2011

With 2011 nearly in the rearview mirror, it seems like a good time to peer into next year's cloudy crystal ball. The technology of 2012 is likely to look fairly similar to what's popular now, but with several notable improvements. There are a number of companies poised to ride a wave of big data to big gains, including several lesser-known players driving this revolution from the inside.

The Internet is (almost) everywhere
The age of dumb machines is nearly over. Ford (NYSE: F  ) wants to sell you a car that's hooked up to the cloud. Microsoft, Apple (Nasdaq: AAPL  ) , and Google (Nasdaq: GOOG  ) are all making serious inroads toward turning your TV into an intelligent entertainment hub. Wristbands can keep track of your health; your coffee pot remembers when to brew; and your refrigerator notices when you're low on milk and places an order for more. That's the essence of the Internet of things, a connected existence that's within the reach of ordinary consumers.

A number of appliances now come with an Internet connection as part of their functionality, and city planning has taken on an increasingly digital tint. While we're not yet at the point where pervasive connectivity follows everyone beyond their cell phones, 2012 should be a major tipping point past which a cell phone and tablet alone no longer cut it. The companies that supply the processing and connectivity hardware should see major growth in this area as traditional computing growth tapers off.

Targeted social advertising booms at the expense of privacy
According to a study released this July, that "tipping point" I mentioned earlier is just over 10% of the populace. By that measure, we've long since passed that point when it comes to giving up privacy for price cuts -- 52% of US consumers don't mind being tracked in exchange for discounts or free swag. That number isn't likely to drop as consumers connect more aspects of their lives to the Internet.

Constant connectivity combined with consumers' willing acceptance of tracking offers major opportunities for companies that have the most options for keeping tabs. Google is embedded in so much of its users' lives that it seems optimally poised to control this increasingly precise flow of information. Its greatest threat comes from Facebook, which could be valued at $100 billion when it goes public next year, but, Microsoft, and Apple also have access to extremely specific user data.

Data analytics becomes pervasive
Wholesale business adoption of analytics has so far been hindered by costs, personnel competencies, and computing capability. Next year could be when these issues are overcome as various analytics operations consolidate under more streamlined umbrellas. IBM (NYSE: IBM  ) is on the vanguard, with several analytics-based acquisitions set to bolster its services in the coming year -- to say nothing of Watson, which has far wider-ranging capabilities than simply schooling Ken Jennings on Jeopardy.

Analytics will be necessary to understand the data flowing out of an ever more connected populace. While some companies now succeed by telling people what they want (think Apple), the majority of future business successes should be highly data-driven, with a deeply statistical and highly granular understanding of their target market