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Weekly Column

Two Steps Forward, Two Steps Back: Bob's Predictions for 2004

Status: [CLOSED]
By Robert X. Cringely
bob@cringely.com

As promised last week, here are my predictions for 2004. But first, let's take a look back at how well I did in 2003. Years ago, a reader complained that I didn't follow up on my prognostications, and I realized he was right. People in my position make bold predictions and then hope they are forgotten. Ever since then, I've fessed-up to what I got right and wrong, and I'm probably still the only columnist anywhere who does so.

A year ago, I wrote that HP/Compaq would continue its long slide to oblivion, and if you look underneath the corporate numbers, you'll see I was correct. The promised synergies have been minimal, growth nonexistent, and the companies are several billion dollars behind where they would have been had they remained separate.

I predicted that Dell would continue to grow at the expense of its competitors, and would become by far the largest maker of personal computers. I was right.

I wrote that Linux would continue to give Microsoft fits (that's true) and that Microsoft would be forced to compete on quality. This latter part is hard to call because Microsoft CLAIMS to be competing on quality, but I think that's still more marketing than reality. Overall though, I think I got this one correct.

I said that Sun would decline further, generally because of the success of Linux. There is no doubt that this was correct.

Here is one I got wrong. I predicted that China would standardize on Linux running on MIPS hardware. I still think the software side of this is coming since China, Japan and Korea have committed to joint development of a non-Microsoft operating system, but I was clearly over-optimistic in terms of timing. I tend to do that. On the hardware side, I was flat-out wrong. I figured the Chinese MIPS-compatible Dragon chip would become the standard, but didn't take into account its lower performance compared to Intel and AMD.

I was wrong, too, in my prediction that Microsoft would force Intel to adopt AMD's 64-bit Opteron instructions. I'll point out, however, that Microsoft and AMD continue to work more closely on 64-bit development than do Microsoft and Intel.

I correctly predicted the Mac G5 computer line and correctly predicted that V.92 modem development would stall, but that nobody would care.

I predicted that Microsoft's Palladium security plan, now called Trustworthy Computing, would be distrusted and stall. That looks right to me.

I predicted the rise of spam as a major headache (true) and said that Congress would pass more laws infringing our civil rights. This latter part is especially true if you take into account the recent expansion of FBI powers, quietly passed on a voice vote and signed into law by President Bush as a rider to the 2004 intelligence appropriations bill -- a bill that, because it involves classified activities, is not subject to public hearings. This sneaky act effectively passed the widely denounced Patriot Act II before anyone noticed.

I wrote that Hollywood would come up with new digital rights management schemes that would be promptly broken and that 802.11a wireless networking would be overtaken by 802.11g. Right both times.

While I was correct that there wouldn't be a significant act of high-tech terrorism in 2003 I was wrong in my mysterious prediction of a new electronic way to foment social change. I just never got around to doing it myself (that was the plan), so I'll have to accept that I was wrong.

And finally, I correctly predicted a rise of web log aggregators and search engines. And for those of you who keep asking for my RSS feed, it can be found in the links that go with this column. The final score for last year's column was three wrong out of 15 for a score of 80 percent correct, which is slightly above my historical average of 70 percent. Maybe I was just vaguer in 2003 than I had been in earlier years. The more vague the predictions, the more likely they are to not be wrong, you know.

Now for this year's predictions, which come in no particular order. Given the global readership of this column, I'm sorry if the predictions seem too America-centric, but that's the way it goes.

1) It will happen late in the year, but Microsoft will make a bold run for video game leadership. Sony and Nintendo have both chosen IBM's Cell Processor for their next-generation game consoles. This is a processor that does not yet exist and for which nobody can fathom how to write games. While the two Japanese companies scratch their heads, Microsoft will be trying to make inroads with game developers and introduce its own next-generation machine. In the long run, though, Microsoft won't succeed in taking the gaming lead.

2) We still won't see a big example of cyber-terrorism simply because nobody has figured out how to actually kill people that way. When it comes to terrorism, all that matters are body counts. We will, however, see dramatic growth in cyber-extortion and plain old theft.

3) Despite new anti-spam laws, we'll still be plagued with unsolicited commercial messages, especially using Internet Messaging protocols. Look for new and unenforceable laws in this area, too. As for old fashioned spam, it will continue to cram our inboxes, making a good business for third-party anti-spam products and services while making e-mail pretty much useless for reliable communication. Microsoft will see opportunity here and propose new protocols to replace SMTP and POP3. They may even offer those protocols as Open Source, but there will be a catch. With Microsoft there always is.

4) Continuing the security theme, look for lots of software companies to abandon support for old products and platforms. From their perspective, they already have your money, so continuing support is just a cost center for them. And if they stop support, you just may replace that old computer or application with something new, generating additional software sales opportunities. This means Microsoft giving up support for old OS variants and hardware, but it also means the same from security companies like Network Associates and Symantec. More and more old machines will become vulnerable, and there may appear a new kind of attack using just antiquated personal computers. Never underestimate the power of a Pentium-90 with a grudge to settle.

5) The SCO debacle has created a crisis within the Linux community. They pretend that it hasn't, but it has. This will come to a head in 2004 with either the development of a new organizational structure for Linux or the start of its demise. Linux has to grow or die, and the direction it takes will be determined in 2004.

6) As for SCO, they'll continue to make noise until the middle of the year, at which point the legal case will implode and the company will give up. By that time, the company executives, insiders, and major investors will have all sold their positions at a handsome profit. This was never more than a stock scam, pushing the price of SCO shares up by more than 15 times. The clever part is how they used a legal case to make public claims that would have caused serious regulatory problems in any other context. We'll see more of this ploy in the future.

7) 2004 will be a crucial year for streaming media. First, there is the Burst.com case against Microsoft. Burst will win unless Microsoft settles first, which I think will happen. If Microsoft buys Burst or takes an exclusive Burst license, it could mean the end for Real and Apple, both of which also are infringing Burst patents. Someone is going to come out of this a big winner. I just don't know who it is.

8) In the U.S., 2004 will see the start of the very digital convergence predicted by Al Gore back in 1996. Old Al was only eight years too early. What will drive this convergence is consolidation within industry segments and increased competition between industry segments. Comcast will continue to suck-up other companies, as will SBC and Verizon. Every cable TV company will move toward offering telephone service, and telephone companies will try to respond by offering greater broadband content, whatever that means. Clearly, the advantage here lies with the cable companies, but that is just for now. And don't forget the electric utilities, which will slowly start to roll out their own data offerings late in the year. This is really a 2005 story, but it will start in 2004.

9) The U.S. IT industry will see some real growth except for Hewlett- Packard and Sun, which will continue their declines. Dell will start to compete in new market segments and those might drive some of their low end products (MP3 players, especially, but also possibly TVs) into the retail channel. Dell service and support will suffer, but the company will still do well.

10) Cisco will not only maintain its leadership in networking, they'll make big inroads into managed storage against companies like EMC.

11) WiFi will be bigger than ever, of course, but progress and service will both be spotty. What's needed is a new business model for WiFi aggregation. I will offer that model in this space next week. Some smart company might just take it up and kick butt.

12) Wal-Mart's entry into the music download business changes everything, and will undoubtedly take the leadership away from Apple. This wouldn't bother Apple if Wal-Mart would support its file standards so Wal-Mart music can play on iPods, but that won't happen. In order to compete for what really counts (iPod sales, not music downloads), Apple MIGHT start to support other file formats. No guarantee on that. What IS guaranteed is that Apple will introduce a cheaper iPod using flash memory instead of a hard drive. Oh, and for next Christmas expect a video iPod, which is essentially a hard drive with a dedicated DV encoder/decoder and a FireWire interface. You'll be able to record video direct to the hard drive then edit from that same drive, completely eliminating tape. The logical follow-on from Apple would be a complete QuickTime video camera, but I don't see that until 2005.

13) No Apple G6 in 2004, and the company won't sell nearly as many G5s as it hopes.

14) IT outsourcing, as covered ad nauseum in this column, will become a political issue in the 2004 U.S. Presidential campaign. Whichever candidate comes out in opposition to outsourcing will have the advantage. And they'll be correct, though the extent of real damage to the U.S. economy and IT industry won't be apparent to those bozos for several more years. As for the touchscreen voting scandal, nothing will be resolved or improved. Don't get me started.

15) Microsoft will open its wallet here and in Europe, settling a ton of lawsuits, paying billions of dollars, but though the money will flow, no lessons will be learned on any side. Nor will Bill Gates achieve this year his dream of winning a Nobel Peace Prize. I am not making this up.

All told, 2004 looks to be a year of modest recovery, but little real technical advancement.

Come back in 366 more days and see how I did.

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