March 23, 2006
Philip Gallagher, Guidewire's European Research Director on Assignment at CeBit 2006
The CeBIT 06 show, which wrapped up March 15, spotlighted a clutch of major new market trends that promise to drive innovation and breed young companies in Europe.
On top of that came signs from leading EU politicians that they know more than hot air is needed to encourage technology innovation in the Euro zone.
Over the next several days we’ll be blogging about these aspects of the show. Here we’ll give snapshots the big picture trends, each likely trigger a flurry of innovations. Following mails will drill down to specific innovators and technologies.
Basic facts & figures: The seven-day show in Hannover, Germany, attracted 6262 exhibitors, from 70 nations in 3.3 million square feet / 310,000 square meters of exhibition space. A final total of 450,000 visitors is forecast, excluding exhibitor staff, around 80% expected to be deciders or co-deciders.
1.LBS (locations-based services) and telematics come of age.
A headline message from CeBIT 06 is that LBS features, today meaning GPS capability, are following MP3 functionality as a must-have feature of various types of handsets and mobile devices.
At the enterprise level, telematics in the form of fleet management technologies are an important ROI tool for companies moving goods round the 25 and rising member countries of the EU.
Both personal and corporate LBS technologies will get a strong boost when the EU launches GALILEO, its 4 billion Euro ($4.75 billion) answer to the USA’s GPS and Russia’s Glonass.
2. Big buzz about VOIP.
A buzzing VOIP (Voice over IP) exhibit at CeBIT attracted almost 300 exhibitors and 70 conference speakers.
The application has got attention at the show back to the Vocaltec days. But even last year Cisco’s strong VOIP presentations seemed to get a ho-hum reaction from corporate buyers. They were uneasy about security and QoS issues while wincing at handset prices.
Two things have changed European attitudes over 12 months. At the low-end the phenomenal uptake of Skype, the European origin company bought by eBay. Then the spread of IP-based Next Generation Networks within companies.
Granted some analysts believe Europe’s old incumbent telcos will squelch pure-play VOIP operators through regulatory attack and new PSTN pricing packages. And granted enterprise buyers still have security and control concerns.
Nevertheless the turn-out for CeBIT 06’s VOIP display showed a high-level of serious interest among the show’s professional audience. And the profusion of VOIP SOHO end-user equipment from small suppliers echoed the early days of Wi-FI.
VOIP is also marrying with cellular. Nokia showed three business handsets capable of sending data by 3G ceullular, 802.11x WLANs and VOIP. A reminder that VOIP will not spare cellular while disrupting fixed line.
(A must-have function for dual-mode cellular/WLAN handsets -- though maybe not those supplied by big cellular operators – a Skype button.)
3. HDTV finally arrives in Europe
Fifteen years ago Europe’s TV broadcasters said no-way to the Euro-standard HDTV system being pushed Philips.
The TV stations reckoned their viewers were happy with PAL-standard picture quality. Broadcasters, especially from the commercial sector, wanted to hook their audiences on more channels receivable on existing TVs with a little help from a settop box. That meant going digital without HD.
Since 1996 Europe has sprouted a profusion of standard definition digital channels, via satellite, cable and over the air.
Facing a mature subscription TV market, the big commercial media cos are finally ready to offer HDTV. And guess what, the soccer World Cup held in Germany this summer offers an ideal launch event.
So CeBIT was awash with HD LCD and plasma screens and projectors, plus home networking demos to show how the signals could be moved around the house.
At CeBIT, it was big name East Asian makers pushing this kit – the Hitachis, Panasonics and Samsungs – with Microsoft Media Center of course as the home network hub.
We expect the entrepreneurial fallout in Europe will be seen at the broadcasting trade shows, where a wave of production companies and facilities houses specialising in HD will come to the fore.
4. TV by cellphone
CeBIT saw the opening rounds of another standards battle stimulated by the soccer World Cup. TV reception is coming to cellular handsets in Europe.
Operators are placing bets on two mobile standards: DVB-H is the handheld version of Europe’s highly successful DVB digital TV standard; rival DMB has been developed in Korea.
Prototypes for DVB-H, which can deliver up to 60 channels per network, were demo’d by BenQ Siemens and Nokia. Prototypes for DMB, which though delivering fewer channels has greater range, were shown by LG and Samsung.
We believe that the content demands created by TV-to-cellular feeds, plus the HSDPA super speed overlay for 3G networks also premiered at CeBIT, will undermine the current content provision strategy of the leading cellular operators in Europe.
They have embraced a “walled garden” approach, offering exclusive closely controlled content. Content volumes have been relatively limited.
The even higher bandwidths being opened up by the technology will demand much greater content volumes. We expect to see European operators moving to the “open garden” model of DoCoMo’s imode model or France’s hugely successful pre-Internet Minitel. These two systems, like the Internet itself, allowed large numbers of service providers – large and small – to set up shop on the network. Another stimulus to Europe’s entrepreneurs.
5. RFID gets political backing
One of the world’s top retails, METRO Group, took a vast stand at CeBIT, with dozens of partners including IBM, Intel, SAP and Deutsche Telekom’s T-Systems. These companies were demonstrating their Future Store initiative, using RFID technology to revolutionise retail logistics.
Metro’s stand received a visit from Germany’s recently elected leader Angela Merkel. A significant move as RFID technology has received much criticism in Germany for threatening privacy.
More political support came from The European Commission’s Viviane Reding, responsible for information technology and media in the EU. She chaired a conference on the show site to discuss RFID issues. Star speaker was Vint Cerf, now Google Chief Evangelist. This was the first time an official holding Reding’s key technology role in Europe had taken such an active role at CeBIT.
Besides retail applications, exhibitors in the RFID hall at CeBIT showed applications for mass transit, event management (World Cup again), chemical, pharmaceutical and airline industries.
We expect the early days of RFID in Europe will generate some business for small equipment suppliers. But as the market matures, big name IT vendors will dominate, plus vertical software suppliers.
Posted by Joanne Donn at March 23, 2006 04:20 PM
