Where is telecom headed in today's economy?

This month we look at the impact of the economy on telecom along with America's changing demograpics and how these different segments of the population approach and use technology.

Is there a topic of interest you would like for us to address in HealthLink Telecom? Let us know at marketing@vericom.net.

Telecom and the Economy: Part II
By Mike Mitchell

Last month I reviewed two perspectives, the upside and the downside, of the economic fallout effecting Telecom. In part ll of this two part series, I point to the economic realities due to America's changing demographics as well as the telecom outlook. Is change predictable as well as inevitable? Is there a reason for cautious optimism in the telecom community, especially healthcare?

In his fascinating book, The Age Curve, author and researcher Kenneth W. Gronbach focuses on the changing American demographics and its effect on the economy. Here are some of his findings:

The Boomers are still kicking (but not as hard)

• The Baby Boomer live birth population (now ages 44 to 63) is 78 million.
• They spent billions of dollars and spurred the economy but spending is now decreasing.
• Today they are just entering the age where healthcare is becoming a necessary expense. Healthcare dollars are being taken away from other markets like cars and houses.

Gen Xers to the Rescue?

• The Gen Xers population (ages 24 to 43) is 69.5 million - 9 million (or 11%) fewer than Boomers.
• They (as a generation) can't sustain the consumption levels of the Boomers.
• The internet is their primary source of relevant information (bad for newspapers, radio, and TV).

Can Gen Yers Help?

• They are younger than 23 and yet to be born (1985 to 2010) - estimated population of 100 million.
• They adapt easily to new technology and inhale electronics (phones, computers, iPods, etc.).
• The Boomers changed the rules in the 1960s; the Gen Yers are changing the actual game plan.

Economic Realities
There are not enough Gen Xers to buy all the Boomer houses or Detroit's non-green cars/SUVs. Gen Yers are demanding better, faster, and smarter technology. The marketplace and the economy are changing. To keep up with the natural and fast-paced changes, America's companies must identify new markets, rethink their approach to old markets, and look for new solutions in order to survive. Old things are passing away, but exciting things are on the horizon. What does this mean for healthcare telecom?

A Cautiously Optimistic Telecom Outlook
"Technology Trends: Analyzing Global Enterprise IT Budgets 2008," a report by independent market analyst firm Datamonitor was referenced in a November 2008 Certification Magazine article Health Care to Avoid Global IT Budget Crunch. According to the Datamonitor report, "[The] aging baby-boom generation is starting to increase demand on the health services, leading to rising costs for national and private health systems. In an attempt to address this, the health care industry is investing in new technologies that will enable it to cut costs and provide more efficient care."

The same report gave survey results showing global cutbacks in IT budget, with this caveat, "The exception, however, is the healthcare sector which, contrary to other verticals, is planning a significant number of increases in IT spending in 2009." It continued, "With 57 percent of respondents [8,000 plus IT decision makers] in the industry saying they plan to expand IT expenditure."

The telecom world is not falling apart. It just needs to make adjustments as demand for wired and traditional services decreases. As the current and future generations are demanding better, faster, and more mobile telecommunications solutions, the innovative, flexible and responsive companies will not only survive but will become strong. Meanwhile, healthcare is gearing up its technology to meet the future challenges of 78 million boomers.

- Mike

Dear Mike: I'm tired of working for someone else. Do you think becoming a consultant is a good career move?

Mike's Answer: Beginning a career as a consultant can be quite rewarding but it does have some disadvantages. Planning is the key to beginning and sustaining a new business. It's difficult to succeed even with a plan, so imagine the odds of success without a plan. Here are some things to consider before making your final decision.

Personality - Do you have the tenacity to stick to the task of building your business? If you are somewhat outgoing and have confidence in your level of knowledge, skills, and abilities, you might find it easy to sell yourself and your services. Can you handle the stress of being self-employed where everything depends on you?

Organization - Can you handle multiple projects simultaneously? Are you organized enough to prospect for clients while you're working on a project? You must always be thinking about lining up clients for the next day, week, month, and sometimes year.

Compensation - As a consultant, you only get paid when you're working. How will this affect your lifestyle? Since there are no paid holidays or sick days, how will this affect your income? How much can you charge for your services? You must consider travel expenses, administrative costs, and supplies when developing your rates.

Business - Can you start part-time to test the waters? Getting a business license is usually a simple process but do you need additional licenses for your area? It's important to keep records and to know your financial position. Find out how much liability insurance coverage you need. Can you find a competent and compatible backup person to fulfill your obligations when you need time off or take a vacation?

The most critical aspect to starting your own business is planning. I recommend exploring the programs available with the Small Business Administration. There are many helpful planning and assessment tools to guide you in making such an important decision.

- Mike

Have a question for Mike? Email him at mike@telexcellence.com.

Cisco unveils long-awaited new edge router

Cisco unveils today a new high-capacity edge router that it hopes will allow the vendor to take the lead against key rivals Juniper Networks and Alcatel-Lucent.

Smartphones driving mobile browser maturity

Thanks to user demand and advances in mobile application development, highly capable Internet browsers running on smartphones are becoming more widely available, in turn driving mobile data usage.

Hosted telecom services see uptick as SMBs cut costs

Small businesses are rapidly reacting to the current economic downturn by cutting their overhead costs, including their offices and traditional telecom services, according to Ring Central, a company that targets SMBs with hosted telecom services.