What’s ahead for 2015 in the tech industry? Members of the GeekWire news team offer their perspectives with this look ahead the key stories and trends we’ll be tracking in the coming year, with a few predictions along the way.
John Cook, Editor and Co-founder
IPOs in 2015
Will the IPO window remain open or closed in 2015?
Several heavily-funded, privately-held companies will be asking themselves that question as the new year kicks off. In fact, CB Insights recently reported that there are now 40 private technology companies valued at more than $1 billion — big consumer brand names such as Airbnb, Jawbone and Uber. If the IPO window remains open, some of those companies will most likely try to go public.
It certainly has been a good time to test the IPO waters. In 2014, 273 companies priced public offerings in the U.S., the greatest tally since 2000 and a 23 percent increase over 2013, according to Renaissance Capital.
Washington state’s IPO lineup had a decidedly life-science bent in 2014, as three biotechnology companies (Alder BioPharmaceuticals, Juno Therapeutics and Immune Design) completed public offerings. Now, we’ll see if another crop of companies can make it out. Likely candidates include electronic signature powerhouse DocuSign, real estate company Redfin and enterprise software companies Apptio and Avalara.
Seattle’s startup scene
Seattle’s startup community continues to produce groundbreaking companies, but two core challenges remain, and they will continue to surface in 2015: Talent and capital.
Amazon.com’s growth in Seattle, along with the arrival of large technology companies such as Alibaba, Dropbox, Apple and Twitter, is making it especially tough for up-and-coming companies to attract engineers and developers. That problem will likely continue in 2015, putting strains on early-stage companies.
The capital markets are relatively strong right now in the tech industry, but the Seattle startup community has been hurt in recent years as the number of homegrown venture capital firms has dwindled. That means the angel community and investors from outside the region have had to step up. A fresh injection of capital in the region could do wonders.
Just imagine what the startup ecosystem would look like in Seattle if three homegrown venture capital or super angel funds — created by top-notch technologists or investors — were formed with $50 million each? That could dramatically alter an already dynamic startup ecosystem.
The new tech giant: Starbucks
One of the companies we’re planning to cover heavily in 2015 is Starbucks, which is emerging as a technology giant in its own right. The launch of the company’s mobile ordering system as a pilot in Portland, Ore., will be followed by a national rollout this year, positioning Starbucks as one of the leading retailers embracing mobile technology.
“We believe it will be a huge driver to our customer experience and our business,” said Adam Brotman, Starbucks’ chief digital officer, in an interview with GeekWire’s Tricia Duryee at the Portland launch.
Even before the mobile ordering rollout, the company says mobile devices (using preloaded digital cards) account for 16 percent of all Starbucks transactions in the United States. Starbucks CEO Howard Shultz has made it clear that the company will be aggressive with its technology rollout, with food and coffee delivery also in the works.
Tricia Duryee, Staff Reporter
Amazon: An evolving device strategy
By nearly every account, Amazon’s Voyage is the thinnest, lightest and best e-reader the company has ever made. It could also be the company’s last big upgrade to its lineup of e-readers.
The e-book giant may continue to sell e-ink readers for the foreseeable future to those people seeking a single-purpose device, but starting this year, there are very few reasons for Amazon to tweak the hardware. An estimated 7.8 million e-readers are expected to ship in 2015, which is down from 2011 when 23.2 million were shipped at the height of the market, according to Statista.
Meanwhile, Amazon must turn its attention to the next chapter, which includes a whole family of devices. Today, it has a line-up Fire tablets, the Echo living room speaker and TV streaming devices. The very flawed Amazon Fire Phone will get a major reboot in 2015. Our prediction is that it won’t be the hardware that will stand out, but the business model. Watch for intriguing data plans, or major discounts for Amazon Prime customers that will make owning the device an easy sell.
What else? A wearable or watch, of course!
T-Mobile: Phoning a friend
For the fourth-place carrier, Bellevue-based T-Mobile US, the past few years have seen multiple acquisition bids by interested suitors: First AT&T, then Sprint and its parent company Softbank, and finally France’s Iliad.
In each case, T-Mobile remained independent, and the company has seen steady customer growth under CEO John Legere.
But it will be harder and harder for T-Mobile to go it alone. In 2014, its shares lost about 18 percent of their value, and it still must raise a lot of debt to participate in the current and upcoming spectrum auctions. As for who might buy T-Mobile, there’s two safe guesses: Dish Network, which has been hording spectrum licenses for quite some time, and Telmex, a venture owned by Mexican tycoon Carlos Slim, who also owns and operates the U.S. prepaid wireless carrier Tracfone.
Two wild guesses to add to the list: Google, which has plenty of investments in fiber and WiFi, but not cellular, and China Mobile, which is partially owned by the Chinese government, but has been looking to spend its $60 billion-plus in cash on foreign investments.
Mobile payments: Big deals to come, but consumers still paying with plastic
Sorry, but 2015 won’t be the year for mobile payments, either. Things move at a glacier’s pace when it comes to money.
For instance, only 2 percent of U.S. retailers have point-of-sale systems that are NFC-enabled, and there’s around 9 million retailers in the country. Many customers have not even used Apple Pay, Softcard or Google Wallet. Apple Pay only works in the store on the iPhone 6, and after three years, only 20 percent of Android phones are using Gingerbread (which is the first NFC-capable Android OS).
Still, banks, carriers and other tech giants will feel pressure to catch up, so expect large bets to be made. Some potential acquisition targets to watch: Square, Stripe, PayPal and Groupon.
Todd Bishop, Editor and Co-founder
Microsoft’s test: Windows 10
The past year has brought unprecedented change at Microsoft, and new CEO Satya Nadella has already started to put his stamp on the company — striking partnerships with longtime rivals, making Microsoft’s apps work across competing platforms and, despite a high-profile misstep, generally bringing a fresh new approach to the company’s operations.
Now comes the hard part: ensuring the company’s future at a time when its flagship operating system is no longer the center of the technology universe. The big test in 2015 will be the rollout of Windows 10, starting with a press event later this month where the company is expected to unveil many of the key consumer features.
The company is likely to expand its Surface tablet lineup along with Windows 10, and the return of the Start menu will appease longtime Windows users, but the key question is whether Microsoft can make Windows relevant again for a consumer audience that has shifted its focus to smartphones and tablets.
Who controls your data?
On the topic of Microsoft, we’ll be closely tracking the company’s battle with the U.S. government over a warrant ordering the company to turn over email account data stored in Dublin, Ireland.
The case has turned into a catalyst for the larger debate between tech companies and the government over privacy and control of user data, following Edward Snowden’s revelations about government surveillance.
This is becoming all the more important in the era of sensors and wearable devices (see more on this trend below) with more and more forms of personal data being stored on servers around the world.
Amazon Growth: Is it sustainable?
Amazon has been hiring at a rapid pace, reaching nearly 150,000 employees worldwide as of September — an increase of nearly 40,000 employees over the prior 12 months. The company is expanding with a massive new complex of office buildings across four blocks on the northern edge of downtown Seattle.
The company is growing so quickly that it needs developers to build 30 new residential buildings in and around downtown Seattle, with at least 200 units each, just to accommodate its employees in the coming years.
All of this comes as the company maintains a tenuous relationship with Wall Street, testing the patience of investors with a lack of consistent profits. No, we never elected Jeff Bezos as mayor, but like it or not, Seattle’s future is now intertwined with Amazon’s fate.
Blair Hanley Frank, Bay Area Correspondent
The Apple Watch, and the growth of the wearable tech market
Apple made a big splash this year with its announcement of the Apple Watch, a new smartwatch that the company will release sometime early next year. It’s designed to give users access to the features of their iPhone right on their wrist, as well as track users’ fitness, including their heart rate.
It’s one in a line of such devices, which also include the Pebble e-ink watch, and a number of new watches released this year that are powered by Android Wear, Google’s version of an operating system for wearable devices.
Rightly or wrongly, the success or failure of Apple’s smartwatch will be considered a bellwether for how consumers feel about wearable devices. There’s a lot of potential for failure. Case in point: Microsoft’s SPOT watch, which failed to catch on outside the wealthy nerd demographic a decade ago.
At the same time, I think some form of wearable tech – even if it doesn’t take this current form – is inevitable. Computers are getting smaller and more powerful every year. Thanks to Bluetooth, wearable devices can just piggy-back off the internet connection from our phones, rather than worry about building their own wireless modems in.
Will 2015 be the year smartwatches go mainstream? It’s hard to say just yet. The Apple Watch, with its design and Apple’s pedigree, seems like the best shot any company has, though.
Will virtual reality really go anywhere this time around?
It has been a big year for the second coming of virtual reality. Facebook bought Oculus for $2 billion, and Sony announced Project Morpheus, its own VR headset. Samsung released its Galaxy Gear virtual reality viewer that was built in conjunction with Oculus, while Google unveiled its own Cardboard VR prototype. Apple is even getting in on the virtual reality game, posting a couple of job openings for engineers experienced in developing VR tools.
It’s clear that the leading tech companies are investing big into VR, but there are still unanswered questions. Will developers be able to bypass issues of motion sickness in the new experiences? What will we do about simulating other parts of the experience, like touch or smell?
I haven’t seen a company effectively answer those yet. Nobody is going to want a virtual reality headset that makes them sick to their stomachs, even if it can provide breathtaking vistas never created by a computer.
Much like wearable tech, VR has been tried before. It never quite caught on. 2015 could be the year when we see the future of human-computer interaction come to the fore, or slink away after another failed attempt.
How Amazon, Microsoft and Google will differentiate themselves in the cloud
Base-level cloud computing resources are either at or quickly approaching commodity status. Companies that want to run a simple workload in the cloud can do so cheaply, and there are a variety of providers to choose from. So how do Amazon, Microsoft and Google differentiate themselves from one another, and make real money off the cloud?
That’s the billion dollar question – literally – and each company has its own take on how it can add value. Amazon announced a whole suite of new tools for developers at its ReInvent conference, while Microsoft has spent its time developing new high-level services for Azure like a machine learning service that gives users the ability to process large volumes of information without a data science background. Google followed in a similar path with its Container Engine service, which is designed to let developers easily manage dockerized applications in the cloud.
Odds are, we’ll see more of these services come around in the coming year, along with some more expected wars over pricing. Each of these companies has a lot to gain, and offering new services is one of the best ways they can attract new customers as more companies move their workloads into the cloud.
Taylor Soper, Staff Reporter
Will Uber truly become more “humble”?
Whether the company is raising another billion dollars or given the finger by another city, Uber was certainly the center of attention in the tech world this year.
Now that the fast-growing startup has some serious cash to work with and a massive user base in more than 250 cities worldwide, it will be fascinating to watch how the company grows in 2015.
How will fellow on-demand transportation startups like Lyft and Sidecar react? Will cities like Portland continue to block out Uber and similar companies? And how exactly will Uber CEO Travis Kalanick follow up on his promise to make Uber a more “humble” company? We’ll be continuing to track these issues closely, given Uber’s role at the center of this emerging economic sector.
Food meets technology
Like many of you, food is one of my passions, and it’s so cool to see how technology is changing the entire food industry.
In 2014, we saw a rush of food delivery startups gain traction. This will only continue as people become more busy but still demand healthy, affordable food in a reasonable amount of time.
Also, keep your eye on restaurants using mobile devices to help people order food and pay bills. Places like Chili’s are already doing so, and I think it’s going to be almost expected to see tablets embedded at every table in the near future.
Technology transforms sports
The intersection between sports and technology is becoming more busy — and interesting — each day.
But here’s the best part — I feel like we’re just at the beginning of technology really changing how sports are played, watched, and consumed. Not every new innovation will make the games better — I’m not a fan of reviewing every single possible play during an NFL game, just because you can — but for the most part, I’m optimistic that technology will continue having an exponentially positive impact on sport.
Frank Catalano, GeekWire columnist
As technology in education goes increasingly mainstream, with superstars like Sal Khan and companies at all levels of education raising more attention and cash from VCs, I’ll be watching the impact it has on the startup community and investors, and what it means for the geeky masses, from toddlers to the toddling. My expertise in this area comes from my day job as an industry consultant.
The impact of “open”
Open source software has been a big deal for decades, but it’s now being supplemented by various open initiatives, from content (think Creative Commons) to credentials (Mozilla’s Open Badges). A center of this action is Portland, and the “open” movement affects startups and established tech firms as they complement it, or compete with it. I’ve closely observed and worked on projects leveraging the Mozilla Foundation’s Open Badges initiative for more than two years and, as a result, have developed some insight into the issues of what’s “open” and what’s charitably called “openwashing.”