By Gary Griffiths, CEO
It’s that time of year again, reflections on the year past and predictions for the year ahead. But as we’ve just had a presidential election, I’ll skip the former and reflect solely on the latter. After all, we don’t get that many new presidents, every four years at best. And since there have only been three one-term presidents since 1932, it’s pretty much a once in an every eight years opportunity. Post-election years are always fun; for some, lofty expectations of great change dashed, and for others, dire prognostications of global catastrophes unfulfilled. While for most of us, despite the election hype, angst, despair or jubilation, we’ll return to the reality that we, not Washington, D.C., determine our own destinies.
That said, the election of businessman Donald Trump, our first president that was never an elected public official or military man, will likely have more impact on the global economy and our day-to-day existence than most others. Love him or hate him, it is hard to deny Trump is the most pro-business president ever – even if some would argue that it only applies to businesses confined within U.S. borders. Although I’m neither inclined nor qualified to opine in any great depth on such complex, broad and reaching issues as U.S. immigration policy, global trade, net neutrality, universal healthcare or corporate tax structures, I will offer a few prognostications on what you may see in the high tech industry, and more specifically in the business of internet connectivity. So let’s jump right in.
- Net neutrality. In short, Obama’s FCC (Federal Communications Commission) implemented net neutrality, essentially declaring broadband a public utility and allowing the FCC to regulate ISPs (Internet Service Providers) like telephone companies. Net neutrality mandates that all data transmitted over the internet should be treated equally. Sounds good, right? Who can argue with “equal?” The idea of “all data being equal” means that ISPs would have to offer the same level of service and speed to all content providers. Critics argue that net neutrality protects the internet’s biggest companies like Google and Netflix, who, unlike ISPs like Comcast and Verizon, back net neutrality, while hurting small content providers (like a high school blog,) who would end up paying the same rates as big data providers like Netflix. Some detractors, Trump among them, go much further in their criticism; they fear that net neutrality could effectively lead to censorship, by giving the FCC the power to decide who gets bandwidth and who doesn’t, essentially a reincarnation of the Fairness Doctrine, only on steroids.
What to expect in 2017? Whether or not net neutrality is actually repealed, we can expect the Trump administration to reduce oversight by federal agencies like the FCC, allowing a power shift away from Google, Facebook and other internet giants to telecom and media giants like Comcast and other cable ISPs, like Verizon, AT&T etc. Or, to quote The Who, “Meet the new boss, same as the old boss,” whether it’s Google or Comcast, Wi-Fi and intelligent connection management figure prominently in their stated strategies, so we don’t need to bet on a single horse in this race.
- Immigration. I’ll shy away from fences and focus on more arcane topics like H-1B visas. Trump’s protectionist views on immigration could have a significant impact on the U.S. technology industry, which relies heavily on engineering talent “borrowed” from countries like India and China who get specialized visas. This issue is pragmatic: we don’t import this talent for diversity. We simply don’t have sufficient skills in the U.S. to meet the demands of our expanding technology industry. This is a problem that has existed for years and is getting worse. Alan Greenspan summarized the situation pretty well a couple of decades ago: “We’re graduating too many philosophers and economists and too few engineers.” While estimates vary widely, Chinese universities award about half-a-million degrees in computer science every year. India? Over one million. In contrast, the U.S. graduates about 40,000 programmers a year, down from a peak of about 60,000 a decade ago. So this is not the human labor equivalent of protective tariffs. We need programmers and engineers in the U.S. And we pay handsomely for them, whether they come from Bangor or Bengaluru.
What to expect in 2017? No change – at least when it comes to H-1B and similar visas that allow for skills-based immigration. Trump may have a lot of flaws, but he is not stupid. He is not about to cut off the flow of talent that is fueling our nation’s top driver of economic growth. And even if, in the short term, there are tighter restrictions on H-1Bs, most Silicon Valley firms (iPass including) have hedged their bets, by establishing software development operations in India, China, Eastern Europe and other hotbeds of programming talent.
- Infrastructure. Trump campaigned heavily on a platform of job creation – jobs coming from new infrastructure in transportation, clean water, the electricity grid and, parochially important, in telecom and security. This will likely translate into increased capital spending on IT projects. As noted above, technology is driving our economy; and if Trump is to fulfill his job-creation promises, the IT industry will be a huge beneficiary and flourish under the new administration. Some Wall Street firms have noted that there may be a short-term pullback in federal spending, as Trump trims a bloated budget. And therefore, investment in the Software-as-a-Service (SaaS) model is more attractive than in more traditional, enterprise perpetual license models.
So what does this mean in 2017? Infrastructure investment, combined with lower corporate tax rates, a near certainty with Trump in the White House, make for a safe bet that a good portion of corporate savings will be plowed back into enterprise IT, specifically into programs that increase and improve the productivity and security of a global mobile workforce.
And so to wrap this up in an admittedly self-serving fashion, 2017 should be a pretty good year for iPass, at least from a macro level. We’ve spent the greater part of 2016 transitioning to a SaaS business model. We will benefit from expected spending increases in infrastructure and IT. And while there may not be any explicit, mobility-related benefits, there is certainly no indication that anything happening in Washington will curb the insatiable, global demand for ubiquitous and secure mobile data. I remain bullish on the critical need for intelligent connection management technology to optimize costs for Mobile Network Operators (MNOs) and Mobile Virtual Network Operators (MVNOs,) while providing secure connectivity to end-users, whether on cellular or Wi-Fi. As with politics, businesses don’t move in a straight line, but we now know that the course we plotted at iPass eighteen months ago is heading in the right direction.