More than any other market segment, IT truly is global.  Parts and manufacturing typically happen outside of the United States (unfortunately for us), and we’ve seen an explosion in international startups lately.

If you haven’t been keeping up on the financial news lately, the dollar has been absorbing body blows left and right.  A recession looks imminent, and the Federal Reserve is kicking the dollar while it’s down by lowering interest rates and flooding the market with more money.  Kuwait recently stopped accepting dollars for oil, and there’s been talk of Saudi Arabia following suit.   Major foreign dollar holders such as China are losing value every day and are likely looking to get out of the USD as well.  Bush has suggested bailing out the sub-prime mortgage market.  The dollar index just reached an ALL-TIME low.

(Apologies to Line Rider)

All this adds up to bad, terrible, abysmal times for the dollar, and changing market dynamics across the board.  In IT, I think it means the following:

• Offshore outsourced labor will no longer be cheaper than domestic outsourced labor.  I think the falling dollar will eventually equalize the cost of doing work onshore and offshore.  IT labor is a global market.  Short-term, offshore costs will go up.  This will be good for domestic outsourcers workers, as it will create more demand here (especially from international companies—the shoe is on the other foot now), and bad for offshore workers, as they become more expensive to US companies. 
• Domestic Software as a Service will become an even more critical infrastructure component.  Hardware costs will go up at the real rate of inflation (not the artificially low CPI the Fed uses), which has been running about 10%.  As hardware becomes more expensive, the benefits of SaaS (no hardware to buy or maintain) will just keep on growing.
• International Software as a Service will become more expensive.  There have been a lot of cool international startups lately, such as FlexiScale, an alternative to Amazon EC2 in the utility computing space.  You’d better be prepared to pay a premium to use them, though, because they typically your monthly bill will be denominated in the Pound or the Euro instead of the dollar.  You will feel the decline of the USD directly and painfully in your monthly budget if you use these international SaaS companies.
• Lock in prices for as long as possible, in dollars.  Prices will eventually have to go up in USD to compensate for increased expenses, so lock in your current prices and contracts for as long as possible.  Use dollars if you possibly can, if you lock in the prices in Euros or anything else it really doesn’t do any good.

I’m not an economist, but I do keep an eye on the financial markets and I do possess a little common sense.  This is what I see as the ramifications of the great dollar crash of 2007-2008.  There’s not much good here, but there are a couple of things you can do to protect yourself as much possible.

Every once in a while I like to take a step back, survey the landscape, and take stock of the direction technology is moving.  It’s a fun exercise, and the feedback lets me know whether I have my head on straight or not.  So in the tradition of Wired’s Wired/Tired/Expired trends, here are my picks:

Hot Trends

Currently emerging trends that are catching on fast.

#1 - Crowd Sourcing

Crowd sourcing is getting a lot of press lately, primarily thanks to Wikipedia which is the best example and the shining superstar of crowd sourcing applications.  User generated content is huge, and if you can find a way to leverage your user base to create relevant content it’s money in the bank for you.  Other notable examples:  Amazon Mechanical Turk, Google Image Labeler, and Threadless.com.

I should also note that I’m a huge fan of the wisdom of crowds, which is one of the reasons I’m so big on crowd sourcing.  The knowledge of masses of people has proved to be far more accurate than a small group of very smart people, which in my mind is one of the biggest reasons that Wikipedia has been so successful.  Related to crowd sourcing are prediction markets, which are hard to grasp for a lot of people but otherwise intensely interesting technology.

#2 - Mobile Web

The Mobile Web has been getting a lot of attention lately thanks to the iPhone.   Ironically, although the iPhone was designed to make the normal everyday Web browsable without any changes, since its release there has been a proliferation of “iPhone compatible” sites which are sites specifically designed to be more readable on smaller screens.  If you don’t have an iPhone you must suffer with one of the old-school mobile Blackberry, Windows Mobile, or HTC browsers, all of which suck pretty badly in this day and age of AJAX.

While the Mobile Web is certainly improving, devices still have some improvements to make, and the networks themselves need to speed up.  Scott Karp has a nice writeup of why the Mobile Web is still maturing on his blog.

#3 - IPTV

I’ve been anticipating the decline of Old Media for a while now.  I think it’s one of the most archaic and painful systems we still have to deal with today, not to mention an insidious way for the people who control it to manipulate public opinion and politics.

Thankfully, IPTV is on the way.  More and more content providers are streaming their content directly from their Web sites, and televisions are progressively gaining the capability to connect directly to the Web thanks to products like Apple TV, the Xbox 360, and my new favorite company Cisco with their acquisition of Scientific Atlantic.  YouTube is creating a global pool of content that anyone can contribute to and consume from.  The Web is already creating waves as it breaks news and provides information ahead of Old Media, this is (thankfully) a serious threat to their business.

Fading Fads

These fads are currently still creating buzz, but my gut says they’re all hot air (l probably just sucked on the flame-mail firehose, oh well…):

#4 - Virtual Worlds

It’s possible I just don’t understand this… but then again neither do a lot of other people.  While virtual worlds like Second Life continue to generate a lot of buzz, the results speak for themselves—and they’re not saying good things.  The businesses are not anywhere near profitable, and the worlds are mostly empty places populated primarily by porn-hounds.

My take is, if I want to play a game I’ll play a game.  If I want to find information, Google and the standard Web work just fine.  I’d rather not go finding and flying to a virtual kiosk somewhere.  I get the impression that this is the virtual reality of the 00’s—namely, a fad.

#5 - Web Desktops/Operating Systems

Web Desktops have been all the rage lately, and these companies have begun labeling themselves Web Operating Systems.  I always dislike it when someone takes a perfectly fine word like “operating system” and dilutes it to the point of uselessness; to me this is exactly what these companies are doing.  Google and Yahoo basically own the virtual desktop space (NetVibes seems to be doing alright as well), and there is no need for more entries in this marketplace, it is already saturated.  They make nice personalized home pages.  Relabeling your product a “Web OS” only serves to kill a perfectly useful word.

#6 - Proprietary API’s

I’m probably stepping into some hot water here, but I hate closed, proprietary API’s.  Anytime a company announces a new API (see SalesForce and, more recently, FaceBook and LinkedIn) they get applauded for being open.  To me this does not feel “open”, it feels more like an attempt to lock people into the system.  It's like buying a phone that only calls the company you bought it from, just doesn't make much sense to me.  If you actually sit down and take a look at these API’s you’ll see that they carefully pick and choose what they open up, and they typically try to keep most of the value locked up in their system.  A truly open API would open up some possibility for interoperability.  Instead of launching proprietary API’s that don’t work together, these companies should form an industry workgroup and hash out something that will work for everyone.  If they don’t, it will EVENTUALLY be their undoing.

Promising Trends Looking for Traction

These trends are extremely promising, just not popular. 

#7 - RSS/ATOM

So, so useful, but outside of the technology elites people just don’t get it.

#8 - Universal Contact Lists

One unified contact list (as opposed to a different contact list for every service you use) is one of the most useful things ever conceived.  Unfortunately, it’s just not here yet, so we’re stuck managing ten different accounts.  Hopefully that will fundamentally change soon, but in the meantime we have products like Plaxo that do a pretty bang-up job of synchronizing your lists.

#9 - The Semantic Web

Ah, the Semantic Web… it’s kind of like Green Energy—you always hear about it, it’s supposed to be a great thing, but you just don’t see it out there.  It also suffers from ambiguity, I take its meaning to be marked-up machine readable content.  I think it’s missing that one killer app that will make it more mainstream, but we will see.

Creeping Onto the Radar—Tomorrow’s Trends

These trends aren’t even really on the radar yet except in theoretical discussions by tech geeks, but I believe they’re the future.

#10 - Message Ambiguity and Convergence

The lines between different types of messages is blurring.  Witness the popularity microblogging (see Twitter and Pwnce), which is essentially just a hybrid text messages/blog post.  A message is a message is a message, and technology is starting to reflect that by allowing you to handle more messages in the same way.  Eventually you will have one universal inbox for voicemail, email, SMS, and instant messages—the iPhone and sites like GrandCentral are hinting towards that future.

#11 - Online Identity Convergence/Consolidation and Protection

Online identities are becoming increasingly important.  What comes up when you Google yourself matters, a lot.  This is sure to become a big, talked-about issue soon, because theoretically your online identity can be stolen.  Parents should be advised to start protecting their kids’ online identities proactively, and monitor what their kids are putting on the Web, because it all goes on your permanent record.

#12 - Personal Servers

No, not a big heavy loud server in everyone’s basement (like the two I’m currently sitting next to), but a virtualized, personally-owned and -controlled online presence—an extension of yourself that can be reached directly over the Net.  Or, as someone smarter than myself recently called it--much more accurately--your online avatar. 

So what do you think?  Agree/disagree/have other picks?