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I, Cringely - The Survival of the Nerdiest with Robert X. Cringely
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The Pulpit
The Pulpit

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Weekly Column
By Robert X. Cringely

This is my first column of the new year, which means I have to give my predictions for 2005. We've been doing this for many years now, and unlike every other predictor I've read, I begin with a look back at the predictions I made a year ago. How accurate was I? Or, more properly, how vague was I that I can claim accuracy?

A year ago this time, my claimed accuracy was more than 80 percent, and would have been almost 90 percent had Intel not waited one more week before embracing AMD's 64-bit processor instructions as I predicted. I doubt that this time I'll do so well, especially since a couple readers have already weighed-in with their interpretations of that 2004 column.

I wrote that Microsoft would make a bold run for video game leadership, which to me meant a boffo xBox2, which has been delayed, so I was wrong there. It is much easier to know WHAT is going to happen than WHEN it is going to happen. I still expect Microsoft to take a huge gamble on xBox2, but I also expect it not to put either Japanese company out of the game, so to speak.

I predicted that we'd see no major example of cyber-terrorism because the bad guys prefer to kill real -- not cyber -- people, but that theft and extortion would both increase. Right on all counts there.

I wrote that spam would get worse, that there would be useless laws passed to stop it (Can-Spam, anyone?) and that Microsoft would propose proprietary technologies (Purported Responsible Address) in an attempt to take advantage of the situation and increase its power over the market. I was right, but fortunately the IETF shot down PRA.

I predicted that all kinds of software companies would abandon support for older products, thus forcing us to upgrade to new operating systems and new hardware. Bingo.

I said that there would be a crisis in the Linux community thanks to the SCO threat, and that some new governing structure would emerge as a result. At the time I wrote that, I thought Open Source Development Labs was stepping-up to take some semblance of control of Linux through its hiring of Linus Torvalds. This one is hard to call, but I think I got it more right than wrong. Certainly, Linus' move to OSDL was prompted mainly by the SCO lawsuit, since OSDL offered to pay his legal fees and Transmeta, his former employer, did not. So the SCO link is definitely there. And OSDL, as a result of having Linus on staff, has doubled its corporate membership and is taking a much more influential role in vetting Linux distributions. So while it didn't go as far as I'd hoped, I'm going to claim this one.

I wrote that the SCO legal case against Linux would implode and it did.

I predicted that 2004 would be a critical year for streaming media. What I meant then was that was going to beat Microsoft and lead to a new world order in streaming, but the trial was delayed and that hasn't happened.... yet. Okay, so I got this one wrong. Again, it is just a matter of timing (see below).

I predicted that digital convergence would accelerate in 2004 with a rise in VoIP and broadband content, along with a bunch of mergers. I was right.

I said that U.S. IT would grow except for HP and Sun, and that Dell would start selling MP3 players and TVs, and that their stellar customer satisfaction numbers would suffer. I was right, right, right.

I predicted that Cisco would maintain its market leadership in routers (correct) and make some inroads against EMC and others in managed storage. (Yes and no -- Cisco is certainly a player in managed storage and EMC has changed some of its tactics in response, but Cisco's effect has been less than I -- or they -- expected.) Still, I think I got this one more right than wrong.

I said WiFi would continue to grow, but would still be lacking a business model. Right on.

I wrote that Wal-Mart would take the music downloading lead away from Apple. Wrong, wrong, wrong.

I said Apple wouldn't introduce a G6 in 2004 (right) and wouldn't sell as many G5s as it would like, either (right again).

Here is a contentious one. I wrote that IT outsourcing would become an issue in the 2004 Presidential race. One reader claims that's not the case, but since it was an important subject in two of the debates and in many Kerry speeches I think I was right. Just because Bush ignored the issue and won the election doesn't mean that it wasn't an issue.

I wrote that touchscreen voting problems wouldn't resolved or improved, and I was right.

Finally, I wrote that Microsoft would settle tons of legal cases for cash, but that nothing would be learned from it by anyone. Three billion dollars later, I am absolutely correct.

Out of 15 loosely-clustered predictions, I got 11 right for 73 percent, which is about my historical average and will hopefully be good enough for me to keep my job for another year.

Now to my predictions for 2005, which come in no particular order.

1) Microsoft's entry into the anti-virus and anti-spyware businesses will be a disaster for users. This is based on everything I know about Microsoft, having watched the company for almost 28 years. They will make a big fanfare, spend a lot of marketing dollars, but in the end, the company simply won't be able to keep up with the demands of keeping virus signatures current, which isn't the real point of this gambit, anyway. There is so much to this story and so much that I could write that I think I'll do so next week, and just move on to the next prediction.

2) Carrying over from last year, I predict that will beat Microsoft in their current lawsuit. But to avoid having to eat crow again over timing, let me put this in greater context. IF a trial actually takes place, as it is now scheduled to do this summer, Burst will easily win. Microsoft is at a disadvantage already as a bully. Burst will probably get Judge Motz to tell the jury that Microsoft deliberately destroyed evidence, and it doesn't hurt, either, that Burst is just plain right on all counts -- Microsoft DID violate their patents, DID violate Burst's non-disclosure agreement, DID attempt to illegally put them out of business, and DID attempt to control the market.

Of course, Microsoft might settle before trial, but at this point, I don't think that is likely out of simple arrogance on Microsoft's part. Microsoft is furious with Burst for the little company's continued survival, plus Microsoft is listening to the wrong lawyers on this one. So Burst will win on some or all counts ,and I expect the damage award to be in the billions. Of course, Microsoft will appeal. But the key difference between this case and other Microsoft cases is that once Burst wins, Real Networks and Apple Computer, both of which are also infringing Burst's patents (along with TiVO and a bunch of other companies), will immediately buy Burst licenses, throwing $100+ million into Burst's coffers and leading to everyone else EXCEPT Microsoft taking a Burst license, too. At that point -- if it goes that far and Microsoft is that stupid -- Redmond won't be able to risk not having a Burst license and will settle, too. Only by waiting so long Microsoft will have blown any number of advantages it could have had. Typical.

3) Apple will take a big risk in 2005. This could be in the form of a major acquisition. With almost $6 billion in cash, Steve Jobs hinted to a group of employees not long ago that he might want to buy something big, though I am at a loss right now for what that might be. Or Apple might decide to throw some of that cash into the box along with new computers by deliberately losing some money on each unit in order to buy market share.

We might see that as early as next week with the rumored introduction of an el-cheapo Mac without a display. The price for that box is supposed to be $499, which would give customers a box with processor, disk, memory, and OS into which you plug your current display, keyboard, and mouse. Given that this sounds a lot like AMD's new Personal Internet Communicator, which will sell for $185, there is probably plenty of profit left for Apple in a $499 price. But what if they priced it at $399 or even $349? Now make it $249, where I calculate they'd be losing $100 per unit. At $100 per unit, how many little Macs could they sell if Jobs is willing to spend $1 billion? TEN MILLION and Apple suddenly becomes the world's number one PC company. Think of it as a non-mobile iPod with computing capability. Think of the music sales it could spawn. Think of the iPod sales it would hurt (zero, because of the lack of mobility). Think of the more expensive Mac sales it would hurt (zero, because a Mac loyalist would only be interested in using this box as an EXTRA computer they would otherwise not have bought). Think of the extra application sales it would generate and especially the OS upgrade sales, which alone could pay back that $100. Think of the impact it would have on Windows sales (minus 10 million units). And if it doesn't work, Steve will still have $5 billion in cash with no measurable negative impact on the company. I think he'll do it.

4) The Recording Industries Association of America will continue to sue customers while their business slowly dissolves. The big threat here isn't file swapping, but affiliate programs like Apple's iTunes Affiliate Program that I am sure will be shortly copied by all the online music stores. These affiliate programs turn bloggers into shills and blogs into record stores, with the result that record company's last source of power -- marketing clout -- is taken away. This will take time, but it is the beginning of the end for old-style record companies.

5) WiMax will be a huge story by summer, but widespread adoption of the wireless networking technology will take at least another two years. In the meantime, though, nobody will make money on WiFi, but it will become ubiquitous anyway, especially with the arrival of 802.11n.

6) VoIP will continue to shatter the telephone industry with the arrival of WiFi phones, which might finally be the killer app for hotspots. Eventually, all the backbone suppliers will figure out that VoIP is their salvation and will either start their own VoIP companies or ally with big VoIP players.

7) The trend of repurposing Linux-based consumer electronics devices through revised firmware will expand dramatically as people realize the cost-benefit advantage, AND nerds realize that they can sell reprogrammed WRT54GS stuff all over town and over the Internet. Just look at Sveasoft's James Ewing, sitting on a little island off the coast of Sweden serving firmware upgrades to 44,178 users who each put $20 per year into his PayPal account. Do the numbers. The next killer app in this space will be a cut-down version of the Asterisk Open Source PBX. Imagine a $100 box that manages your telco, VoIP, and mobile phone lines, making them appear as a virtual three-line phone with common dialing rules and always choosing the cheapest route for each call.

8) Desktop Linux will finally make some serious inroads as Linspire sets the trend for how to make Linux more user-friendly. There will undoubtedly be other players in this space, but they'll just be emulating Linspire (formerly Lindows). Now if Linspire could only manage a one-click installation of MythTV.

9) And speaking of MythTV, 2005 will start to show some innovative online video initiatives. Don't expect this until late in the year, but the networks are starting to figure out that control of the broadcast schedule is being taken over by the viewers in a TiVO world, while producers with big libraries are starting to realize they don't need a network to sell bad TV. Since this is a tide they can't stop, the networks will have to decide how best they can surf it. Expect some interesting attempts this year, most of which will fail.

10) In 2005, the major beneficiaries of the Peoplesoft-Oracle merger will be SAP and IBM, NOT Peoplesoft or Oracle customers, despite anything Larry Ellison says ("Oversupport" Peoplesoft customers? -- sheesh).

11) Cisco will rediscover its ability to buy and assimilate startup companies since it REALLY needs a shot of new ideas and has a ton of cash to spend. At least, I hope they will.

12) There is no evidence that Sun will change its current course, which is inexorably downward. I know Jonathan Schwartz thinks I'm crazy, but so far I am more right than he is, and hear no reason coming from him why that should change.

13) While Intel thinks its 2004 course corrections will do the job, I just don't see much in the new product roadmap to get excited about. AMD will continue to grow at Intel's expense. And keep an eye on IBM's PowerPC introductions later in the year that should really give Intel fits, especially if they are accompanied by substantial OEM agreements.

14) Two thousand five will NOT be the year for UltraWide Band (UWB) networking or Power Line Networking, but both will do really well in 2006.

15) Sony's PS3 will be delayed yet again, giving a real advantage to xBox2 IF Microsoft can get it out the door this year in volume.

Now to last week's column about tsunamis and tsunami warning systems. While my idea may have set many people to work, only a couple of them have been telling me about it. Developer Charles R. Martin and Canadian earth scientist Darren Griffith met through this column, and are in the initial stages of building an Open Tsunami Alerting System (OTAS). Although work has just started, they've established a few basic principles: OTAS will be very lightweight; will use openly available geophysical or seismic data sources; will be highly distributed and decentralized; and will be built to run on very low-powered commodity hardware. They currently foresee using Python and Java, but aren't religious about it. Anyone who wants to help out is welcome and their OTAS blog can be found in this week's links.

Catch the wave.

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