Editor Predictions for 2001 . .

. . and beyond. Predicting the future is low risk. If I'm wrong, nobody will remember anyway - and if I'm right, I'll make sure nobody forgets.

Home

Index

Services

25-Dec-00
Microsoft Buys Great Plains

25-Dec-00
.NET Takes Shape

24-Nov-00
The Next Windows

08-Oct-00
Winds of Change

23-Jun-00
Microsoft .Net

10-Jun-00
Microsoft strikes out at Linux

7-Jun-00
Tried, Guilty, Sentenced

28-May-00
OS/2 Finally Dead

11-May-00
the ILOVEYOU Worm

6-Apr-00
What's to be done with Microsoft

25-Mar-00
Our Web comes alive again

Contents

Investment

While the general investment market will do OK (not spectacular, but OK), technology issues will remain in a deep slump. Why will investors avoid technology issues? Well, because they've been burned over and over and over again. It's their own fault, but they'll blame the technology market.

The B2C (Business to Consumer) Dot.coms took their money, blew it all, and vanished. Now the B2B (Business to Business) Dot.coms are in the late stages of doing exactly the same thing. Linux IPOs came out way high, and Investors bid them up absurdly higher because it was "the next big thing", and they lost nearly all their money there too.

All these "opportunities" based their business plans of pure fantasy. It got so absurd one big consulting firm loudly claimed that ROI (Return on Investment) was no longer a valid measure. Well, it wasn't valid for any of these "investments", because none ever had the slightest possibility (or even intent, in some cases) of returning a profit.

ASPs (Application Service Providers) are the current darling for those still in the technology market. They'll go down with all the grace of an airliner with a bad jackscrew - twisting and turning the whole way. Microsoft's .NET is the biggest ASP play, and will do the most twisting and turning, but they'll keep it in the air somehow.

PC company stocks are headed for the tank in a big way, and will never recover their former glory. Disappointing sales from a saturated market are already a big factor. Delays in release of Whistler (next version of Windows) will cause sales to dry up almost completely, then slow sales for Whistler, as business realizes it's just Windows warmed over again and nothing really new. Then lower cost (read, "lower profit") network devices will start moving in.

Linux stocks will stay low, where they belong, for the simple reason nobody's going to make much money on a product that's almost free. Linux will generate vast amounts of money, but not for "pure play" Linux companies. Linux distributors like Red Hat intend to make money from "support", but they have little if any advantage over companies already in the support business - like IBM

Microsoft stock will stagnate as investors finally begin to realize the company peaked a couple of years ago and will never return to growth rates supporting absurdly high stock valuation. The "Greatest Fool" has already been elected at $119-13/16. This means big problems for Microsoft and it's employees, because they've been floating the whole business on stock options that are turning into so much wallpaper.

Smart Investors (not quite an oxymoron) will do quite well by very selective bottom fishing. Business that really are sound are being dragged down by the high profile failures. The cream will eventually rise. The really important "technology investments" will be investments in technology to enhance the operation of real businesses.
(Top)

Linux

Linux will continue to gain steam rapidly in the server space, and will start to gain a tiny foothold on business desktops. Why? Because many companies are investing very large amounts of money in Linux. IBM alone intends to invest $1 Billion in this "free" operating system in 2001. Yes, that's Billion with a "B".

Why all this money when the fruits of this investment have to be "contributed back to the community"? Simple - because it will generate lots of revenue.

An example: IBM's new Web server for ISPs. It's an S/390 G6 mainframe running at least 1,500 instances of Linux, each running IBM's WebSphere e-commerce server (based on Apache, another "free" software product). This system also enables IBM to sell it's Shark disk storage product, starting from 11-Terabytes (11,000 Gigabytes). An entry level system brings in $3 million.

Notice something else about this beast? All the revenue goes to IBM, and not a dime to Microsoft. This also holds true for everyone else implementing their systems on Linux (See "Microsoft stock" above).

Couldn't IBM have used their own AIX Unix instead? Sure, but then they couldn't take advantage of all that Linux software development going on out there. Instead, IBM, Hewlett Packard, Caldera (SCO) and others are working to make Unix into "Big Linux".

Another factor is startup companies and the capital they need to get going. A few years ago, you couldn't get financing for development in any environment but Windows. Today, as Microsoft crushes the life out of the Windows market (see below), the situation has reversed. Startups (and the money guys) will favor Linux.

All in all, Linux allows integrators to offer solutions with a lot more service content (benefiting the customer and higher profit to the provider) and still come in at a lower price than a Microsoft based solution.

Linux won't dominate though. Most integrators still aggressively push Microsoft solutions. It's the "easy sell" and they can milk the sale indefinitely with expensive "fixes" and "upgrades" and "add-ons". Also, Microsoft has invested millions in key integrators to assure their loyalty.

Many customers will reject Linux because Windows is the path of least resistance. "Nobody ever got fired for buying Microsoft" (not actually true). I recently read an article where a corporate IS guy was asked "What would need to happen for you to install Linux?" The response was, "I guess Microsoft would have to sell it."

At the high end, neither Linux nor Windows is in the picture. Neither can compete with high end Unix, AS/400s and mainframes.
(Top)

Windows - Business

Windows will retain it's desktop monopoly on the PC for the next few years, but erosion will set in, slowly at first, as non-PC devices become common.

Windows 2000 will be adopted, but the pace will continue to be sluggish, because it breaks just about everything it touches. Check out Putting on the Breaks in ent (a magazine devoted to Windows NT/2000). For a lot more see our article Adopting Windows 2000. In recognition of this pace, Microsoft has canceled plans to end Windows NT certification in January.

Linux enthusiasts say Linux will take over because it costs a lot less, is more stable, standards compliant, and offers a lot more choices. They are dead wrong. Choices is precisely what most people don't want, and they'll pay the monopolist any price he asks, and put up with instability, in order to avoid choices.

This deep seated desire to have "no choice" is the true power behind the Windows monopoly, and why it's a monopoly in the first place, but it's not all roses for Microsoft either. What people have now is "good enough", so they're not buying a lot of new computers, and when they do they want it just like what they already have, not "new and improved". This is not a good thing for a company that depends on continual upgrades for its revenue growth.
(Top)

Windows - Consumer

Microsoft will continue to tighten it's grip on the consumer market (entertainment, shopping and gaming), and on the consumer. It is in this market that .NET will see some success - because there simply won't be any alternatives.

It probably won't happen in 2001, but soon enough, when you bring home your new Windows computer it will be entirely non-functional except for the ability to make an Internet connection. Before you can use it for anything you will have to connect to Microsoft's registration page. License keys will be downloaded when your computer has passed inspection.

Don't have Internet access? Not a problem, you'll be offered the opportunity to sign up with MSN right then and there - just plug in your phone line. If you dig around you'll find buttons to sign up with other services (due to anti-trust meddlers, you know), but by then you'll already have MSN. Of course, to use your computer effectively, .NET will require you upgrade to a high speed Internet connection.

Your computer will maintain a continuing dialog with Microsoft (if you use Internet Explorer, it already does), and Microsoft will know what's on your computer and how you use it (and they will deny that they know). If Microsoft finds violations of licenses, they will simply disable your computer, and you have no recourse (see UCITA). If you don't allow Microsoft access to your computer, it simply won't do much, and then your licenses will expire and it won't do anything (except connect to Microsoft's registration page).

Windows will be the only way consumer entertainment and gaming sites can be accessed. This is already nearly the case. Macintosh users will have access to some sites (if they use Internet Explorer) but not to many others. Linux and OS/2 users will have to settle for "alternative media" sites.

Doesn't this all mean a great loss of freedom? Won't there be rebellion? Yes. No. Freedom is of interest only to a few intellectuals and nutcases. The vast majority couldn't care less so long as they have entertainment. Communism didn't fall for lack of freedom, it fell because it didn't provide enough entertainment.
(Top)

Mobile Computing

Lightweight Mobile devices will continue to find new uses and become common, but not to the level of industry hype. There are a lot of people for whom a mobile solution makes a lot of sense, but there are a lot more for whom it does not, or does not make enough sense to justify the cost and inconvenience.

New wireless protocols and services will make mobile devices a lot more practical. They can stay connected to the office network, allowing them to leverage the power of stationary applications servers and data storage. On the other hand, they will remain much slower and clumsier to use than desktop machines.

Palm, Linux, Symbian and others will do well in the mobile marketplace. Microsoft will not do so well because Windows just requires too much power. Battery life is a major concern, and significant improvements in battery technology have been few and far between. Also, there's Microsoft's high royalty demands and forced upgrades. Linux is free, and other proprietary systems are far less costly, a major concern in consumer market devices.

"Windows compatibility" will not be such a big issue with mobile devices, since just about everything will be browser and Java based. Microsoft's "Pocket PC" (formerly Windows CE) isn't that Windows compatible either.
(Top)

The Internet

Increasing use of the Internet will create ever increasing demand for low cost broadband network connections. Increasing availability of low cost broadband network connections will spur increasing use of the Internet, resulting in . . .

So many services and so much information will be moved to the Internet every business will find it necessary to have Internet access for nearly every worker who has a PC or other computing device.

So many clients, customers and business partners will simply expect your business to offer information and services on the Internet you will just have to. If you don't, It'll be like telling them you don't have a fax machine.

How good your Web site is will be the competitive factor, not whether or not you have one. Right now, most Web sites are very poorly implemented, and it'll be years before a good site is the norm. Now is the time to take advantage of the situation - a good site doesn't have to be flashy, costly or "cool" - it has to be usable.

Microsoft will have complete control over gaming and entertainment sites, because unless they host on Windows 2000 servers with IIS (Internet Information Server) they won't be able to implement Microsoft proprietary features Windows users expect.

Microsoft will fail to take over the entire Internet, because they won't be able to control most of the servers. Sites that must have Microsoft proprietary features (entertainment, gaming) will host on IIS, but the majority will host on Unix, Linux, BSD, and mainframes running Linux.

Why can't Microsoft control the serves? Compare a warehouse full of quad Pentiums running Microsoft IIS (Internet Information Server) to a single IBM G6 box with a single 20-Terabyte storage array running 4,000 instances of Linux / WebSphere. Compare the reliability of a mainframe system to the reliability of a warehouse full of PCs. Compare administering a warehouse full of PCs to administering a single box from a single console. Are you getting the picture? It's pure economics.

Not everyone can afford a mainframe? For smaller sites there's Sun Unix boxes, and for smaller still there's Linux (or BSD) / Apache on Alphas and quad Pentiums, and Linux / Apache is free. None of these can run Microsoft software, or would want to.
(Top)

"Webification"

Business will accelerate its application of Internet technologies. Many companies are designing all their new applications around Web browsers and Java, and are "Web Enabling" existing applications using Tarantella and similar systems.

The reason for this shift to Web technologies is to free applications from both platform and location restraints.

  • Any device that supports a Java enabled Web browser can run the applications. It needn't be a full PC and it needn't run Windows.
  • Any device can run application from anywhere it can get a network connection, even over the Internet from remote locations.
  • Users are no longer tied to a single desktop computer. They can access their own applications, data and preferences just as well from any other device, regardless of location.
  • IS staff no longer have to fully configure every desktop computer individually. All it needs is a Web browser.
  • Data is all on centralized servers where it can be properly backed up and security policy can be maintained.
Microsoft .NET represents Microsoft's recognition of this trend and implements the major points, but using C# (C Sharp) instead of Java. Big difference are that .NET requires you to use Microsoft applications hosted on Microsoft serves, and your data is stored on those servers. Access to applications and your data is over the Internet, and payment is by subscription. Bits and pieces of .NET are available now, full implementation in 3 to 5 years.

Other approaches place company owned applications on company owned servers running over the company's network and store the data on company owned hard disks. Availability is now, but this is still mostly custom development.

"When I think about having a molding machine connected to the Internet, I realize we open up to a lot of things" - Delphi Automotive's Gary Robertson. nonetheless, Robertson is fully committed to .NET because Microsoft has promised him "molding machine to boardroom integration" in just 3 to 5 years.
(Top)

Attacks

OK, this one's so easy it doesn't even count as a prediction. 2001 will be a banner year for exploits by hackers, script kiddies and viruses. It is simply inevitable. Nearly all home PCs and business networks are based on a system from which all traces of security have been carefully squeezed in favor of tight integration and ease of use.

Windows and Office include a wide selection of marvelous virus writing tools built right in. There's no security to prevent them from going about their business, and they have full use of the most effective virus spreading mechanism ever imagined, Microsoft Outlook.

The people who wrote the "ILOVEYOU" virus had only a few weeks training. They certainly weren't "expert hackers", yet they cost business hundreds of millions of dollars within a few hours. What expert hackers could do is truly frightening.

So if Windows insecurity costs business hundreds of millions of dollars in 2001, won't people start avoiding Microsoft products? No. People truly want to believe they have no choice. If getting your network shut down and your data corrupted periodically is a cost of using Windows, most people and businesses will simply accept that cost.

Microsoft will repeat over and over, "If any other environment were as popular it would be just as vulnerable". This is simply not true - see Microsoft's Security Model for the reasons why - but it will be accepted because it's what people want to hear.
(Top)

Microsoft and Anti-Trust

Microsoft isn't going to be broken up. The Bush administration isn't going to do much to get them off the anti-trust hook though. The fact that the states have already committed to continuing the case even if the feds pull out pretty much assures the feds won't pull out - and it's hard to abandon a case you already won.

Microsoft has intensified the activities that got them hauled into court, and will continue to do so. They want to grab as much market and kill as many companies as they can before they are placed under restrictions.

Their "integration" of streaming media into Windows Me is precisely the tactic they were found guilty of using against Netscape, and is intended to destroy Real Media and other multimedia companies. Their purchase of Great Plains will be used against business management software publishers and ASPs.

This brings the probability of two additional major anti-trust suits, private or by the DOJ (Department of Justice). Expect at least one of them to get rolling in 2001 (complaints have already been filed with the DOJ in the Great Plains case).

Considering the weakness of Microsoft's appeals filing, the Court of Appeals may let substantial parts of judge Jackson's verdicts stand. This will probably force Microsoft to settle in other cases, but the damage is already too great for the Windows market to recover.
(Top)

Speaking of Predictions

My prediction (Sep-1999) that Microsoft would purchase Great Plains Software was dead on. I expect my prediction that this purchase will be used to crush the life out of the accounting and business software industry will be just as dead on. This is not a good time to be a developer of Windows based software.

[ Update: My companion prediction to the Great Plains buy was that Great Plains would come out with a low end accounting package to cover the space between Microsoft Money and Great Plains. In August 2001 this prediction came true with the announcement of Small Business Manager. Microsoft's revenue plan for Great Plains can only be met by pushing out practically every other accounting software vendor in existance, so we can presume that's the plan. ]
(Top)

©Andrew Grygus - Automation Access - www.aaxnet.com - aax@aaxnet.com
Velocity Networks: Network Consulting Service - Internet Service Provider - Web Page Design and Hosting
All trademarks and trade names are recognized as property of their owners