It’s that time of year again. As 2012 draws to a close, we decorate our homes for the holiday season, reflect on the year about to end and ready our resolutions for the New Year.

"Prediction is very difficult, especially about the future."
"Prediction is very difficult,
especially about the future."
Niels Bohr, Danish physicist
(1885 - 1962)

And, of course, try to ascertain and prognosticate what developments the next 12 months will bring. Following this tradition, I have assembled my top predictions for 2013 below, based on daily observations, anecdotal input from others, conferences I have attended, trade publications, analyst reports, and Scotch-fueled late night conversations with others in the field. It should be noted that I am a hands-on practitioner and not an analyst, professional writer, or industry pundit. As such my focus is more practical – and perhaps more narrow – than some and the views represented are solely mine and unencumbered by any agenda. We’ll see in the coming months what impact, if any, this has on the quality of my predictions.

This is a long post, reflecting the magnitude of the change I sense is underway and the dramatic impact it will have on business and our daily lives. I apologize in advance for those who, like me, struggle when confronted with long prose (and short attention spans), but hope my tone and diction aid in making it somewhat consumable.

You will find that many of the trends outlined below are interrelated and mutually reinforcing. This is one of the reasons for their rapid, exponential growth and propagation. It is also why their impact on business and our daily lives promises to be significant, as individual developments act to reinforce one another, thereby unlocking synergistic effects that work to magnify and increase the overall impact of each.

For instance, as mobile device proliferation drives anytime/anyplace access, it will greatly increase network traffic and growth in “mineable” data volumes, which in turn will accelerate the growth of both cloud computing and analytics to extract value. All of this will spur investments in technology, and make technical proficiency more critical to all roles and functional areas of business. Likewise, as network access becomes more pervasive, users will derive more utility and benefit, which in turn will drive consumer and business demand for tablets and other mobile devices. Growth in device demand will, once again, increase usage, data volumes and the potential for value creation, thereby closing the loop and creating a virtuous (one hopes) cycle of self-reinforcing, explosive growth.

Mobile Computing

There has been much talk about the rise of the mobile Internet and it looks like the oft-heralded “Year of Mobile” may finally be upon us in 2013. While most analysts predict that mobile Internet traffic will not eclipse the desktop until 2014, some are now adjusting their predictions based on more recent growth data to say this will occur next year already. I remain skeptical of this. For one, many analysts include tablets accessing the Web via WiFi connections, which in my book isn’t true mobile. But, this may be splitting hairs.

The fact remains, however, that alternate devices – as in anything other than traditional desktop or notebook computers – are on a tear and this is fundamentally changing the Web. For one, companies now really need to take a hard look at their digital strategies with a serious consideration towards device diversity. Many see responsive design as the solution here, others are betting the farm on a mobile-first approach, with desktop almost as an afterthought. Only time will tell what approach is the better but one thing is for sure: the mobile Internet – regardless of how you define or respond to it – is here to stay and growing rapidly. Ignore this trend at your peril.

A lot of companies are still currently underinvested in an effective mobile offering and I regularly encounter large retailers, service providers, and entertainment venues that offer little or nothing in the way of a serious mobile strategy.

Convergence

I view convergence as an overarching meta-trend of sorts and see it taking place on several levels, including user expectations, devices, technical standards, applications and business models. As such, it is driven by a number of other trends and, similarly, also acts to accelerate others.

Convergence has been happening for some time and across sectors, but is now increasing in scope, speed and impact. Think of data networks that have converged around common IP standards and protocols such as TCP/IP, and now carry data, telephony, television signals and more. Device convergence is seen in modern smart phones that handle voice, SMS and Internet access.

What’s new – and will become an increasingly powerful factor – is true convergence at the application, integrated device and business model level.

Examples here include mobile payments, such as Google Wallet and ISIS, which combine Internet technology, standards and infrastructure with payment industry standards, such as PCI, and mobile telephony and device standards. Square is another great example here and one that has been taking the retail payment acceptance space by storm. We also see increasing convergence at the application and business model level online, where these are increasingly coming together to deliver more integrated, seamless data exchange and a richer, more rewarding user experience, while also creating powerful synergy. Social media, smart phones and location-based services have been big drivers in this area.

Expect more of this, including examples that combine elements of social media, loyalty, discounts or daily-deals, and location-based services such as FourSquare. One example might be to offer certain users unique deals based on demographic and income data, past purchases, and other data once they are within a certain distance of a retailer or restaurant. Another example could be a targeted coupon from a CPG company, redeemed through a mobile payment service and offered upon entering a super market or department store. Some of this may appear a bit creepy at first and companies must take care to avoid consumer backlash but, just like targeted couponing around frequently bought items at time of check-out at the supermarket, this sort of real-time suggestive offer delivered via your smart phone represents an example of application convergence and will eventually become commonplace.

Tablet Computing

On the device and computing hardware front the biggest change threatening the traditional desktop or notebook computer is the rise of tablet computing.

Computing OS by Market Share
Combined, Android and iOS have displaced Wintel as the dominant computing OS.
Image Copyright 2012, KPCB

In fact, Business Insider cites this as the top threat to Microsoft’s hitherto reliable profit stream from their Windows operating system. Meanwhile, Mary Meeker of KPCB points out on slide 24 of her Internet Trends Update Presentation what a dramatic effect the rise of Android is having on Wintel’s seemingly unassailable lock on the OS market.

And, based on my personal use and anecdotal information from others, it would appear plausible that tablets are in fact cutting into consumer desktop usage, though few folks are quite ready to ditch their notebook computer altogether. Not yet, at least.

Expect this trend to continue and also look for more alternatives to Apple's iPad to hit the market, including Android devices and targeted niche tablets such as Amazon’s excellent Kindle Fire.

With the introduction of Google’s Chromebook, starting at just $199, we also see how this trend begins to threaten the more traditional PC/laptop business and Microsoft’s core business.

My kids will be getting a Chromebook for Christmas this year, by the way, along with a new Kindle. My last purchase

was a notebook I bought last month with Windows 8 (plus a shit-ton of bloat- and adware) that left everyone in my household less than impressed.

I sure hope somebody in Redmond is reading my blog.

Big Data and Analytics

There has been a lot of talk about Big Data in 2012 and next year will see a continued focus on data, both big and small. This will have a fairly dramatic effect across all areas of business. Marketing – and digital marketing in particular – will most likely feel the greatest impact though, as the C-Suite insists on ROI and the data to back it up. Instead of feeling threatened, marketers should welcome this, though most seem currently ill-prepared to rise to the challenge. As I wrote a few weeks back, there are reasons for this, but these can be overcome and marketers should seize this opportunity to prove the effectiveness of their work and justify the investment it requires.

Marketing spend on digital channels continues to grow rapidly, at far greater rates than other channels and media. In fact, it is now second only to broadcast television – a misallocation that persists, despite consumers spending more time online than watching television – and one can expect the importance of metrics data surrounding reach, engagement, conversion, and attribution to increase in lockstep. And, since digital media is uniquely measurable when compared to traditional, and each interaction generates a data point, expect the resulting data volumes to grow in lockstep.

To truly derive value and actionable insight from these mountains of data, marketers will need to make investments in hardware, software, people and process in order to store, structure, dissect and analyze it. This will add further impetus to the rise of cloud computing, while the move to data-centric decision making will require more technical and analytical skills across all functional areas, including marketing.

Increasingly Cloudy

Cloud computing will reach true maturity and permeate both business and personal applications. Software-as-a-Service (SaaS) will become the dominant model for most corporate applications, displacing the traditional software lifecycle and license purchase model.

This will have dramatic effects on the IT department and the role of the CIO. Once freed – or, at least, greatly relieved – of the need to manage desktop applications, networks and common business solutions such as CRM, SFA and even Finance and ERP, the CIO will shift from an operational to a more strategic focus. Eventually, the role will morph into that of Chief Digital Officer. Not all will be up to the task, but those that are will find their influence and impact on the future success of their company greatly enhanced.

Cloud computing will also continue to penetrate the consumer space and eventually most of our data, applications, and content will reside there, accessible to us anytime, independent of device, place or time.

Social Media is dead. Long Live Social Media!

Social Media will experience moderation and enter the Trough of Disillusionment, before emerging stronger and more focused. This is not necessarily because the power of social media has been over-sold (though, at times, it clearly has) but, rather, because companies have over-invested and need time to digest, sort out what works, and apply more operational and investment rigor.

Already there are early indicators that many are falling out of love with the Web’s latest new new-thing and, increasingly CMOs – or maybe CEOs, concerned about overall spend in this area – are questioning corporate investments in social media and demanding to see proof of its effectiveness and ROI.

It is not uncommon for new, disruptive concepts to become over-hyped in their early stages, then fall into disfavor, only to emerge stronger but more focused later. Arguably, the Web itself experienced this in the late 90s with the dot-com bubble and bust in 2000. Expect social media to undergo a similar trajectory, though perhaps not quite as extreme. This should not be seen as a dismissal or distract from the validity and effectiveness of social media as a concept. Instead, interpret it as a call to moderate efforts, make them more thoughtful, targeted and focus more on quality over quantity, substance over style and frequency. We'll get there.

Expertise in Technology Becomes More Important than Ever

As I wrote last week, expect technical proficiency across a wide range of common Internet standards and concepts to become more important than ever, across the enterprise and regardless of functional role.

The fact is, we live in a tech-driven world and business – and employees – will need to adapt and evolve or risk obsolescence. Internet technology and concepts now permeate every function of business, from accounting to supply-chain and whether you’re a lawyer or an HR professional, it behooves you to develop and maintain technical skills.

And that’s it, I’m spent. I hope you enjoyed reading my predictions and I welcome your comments, feedback and thoughts. I also trust you’ll join me again in a year – or maybe earlier – when I will review these and see how I did. Until then, best of luck, prosperity and good health in 2013!