1. The Bear market will result in failure of E*Trade competitors
Prediction: -By the end of 2001, there will be no more than three or four major online traders standing, and all of them will look more like online banks than online stock managers."
Outcome: I was pretty much dead on target here. As the market continued to spiral downward, the only pure online play that held its ground was E*Trade, and, as I predicted, it has evolved into an across-the-board, financial-services player from its inception as a pure online stock brokerage.
The companies hit hardest were those vying to make their mark in day trading (e.g., Datek) or in cheap trades with little ancillary value (e.g., Scottrade). The company that seemed to benefit the most from the downsizing of the electronic trading market was American Express. Because AmEx had a niche customer sector in place when the enterprise went to the Webââ,¬"thanks to strong, established financial relationships with wealthy individualsââ,¬"it was one of the best performing financial stocks for the year, largely due to the strength of online investment accounts.
2. The big ASP and data center shakeout
Prediction: -By the middle of next year, you should expect the failure and/or acquisitions of many large, public ASPs."
Outcome: I think all of us expected a shakeout, but the pace at which the Internet economy contracted made this prediction frighteningly real to thousands of ASP employees.
The biggest surprise was the failure of some top financed companies. I can remember sitting in a meeting with a CIO right before my 2001 predictions article published and listening to him tell me that he had moved all his servers to Exodus because -they would be safe there." Exodus filed bankruptcy on September 26 and is having certain assets and liabilities acquired by Cable and Wireless, PLC.
Data Return, once the darling of the applications infrastructure provider (AIP) market (and heavily funded by Microsoft and Compaq), got acquired for cents on the dollar by divine, a company whose strategy resembles that of Computer Associates. Divine is to the Internet space what Charles Wang and CA were to the dying mainframe space. (CA's claim to fame is buying up distressed technologies, repackaging them, and attempting to live on residuals.) I also predicted that Microsoft and Oracle wouldn't sit idle while other companies made services revenue on hosting their software. Oracle now tightly controls the hosting of its financial systems, and this year, Microsoft announced its intention to sell Great Plains, which is hosted through its bCentral organisation. Microsoft has also announced its MyServices initiative. By the end of next year, the company will be in a position to collect millions from consumers by providing hosted mail, collaboration, calendaring, and Wallet services.
3. The movement toward server-centric computing will accelerate
Prediction: -Businesses will move rapidly toward less-sophisticated terminal devices...instead of perpetuating the desktop upgrade cycle."
Outcome: In 2001, businesses did recognise that perpetuating the desktop upgrade cycle didn't make sense for many reasons but primarily from an economic aspect. Unfortunately, this realization then spurred on the downward economic tech spiral. Since companies didn't buy PCs or upgrade systems, investors then downgraded stocks.
I also predicted that the ubiquity of wireless networks would make centrally stored data, with less-sophisticated terminal devices, more appealing. The weakness in the tech sector kept wireless from taking off in WANs but didn't stop wireless LAN (802.11b) growth. The bottom line: Businesses did slow down the upgrade cycle, but the move to wireless, portable devices didn't take place at the pace I expected.
4. Home and nonprofessional video will come of age
Prediction: -Next year, manufacturers will release the hardware and software that allows us to manipulate video like we manipulate data files today."
Outcome: To support this prediction, I also forecasted that DVD recorders and 1394 ports would become standard equipment on PCs by the holiday buying season. In fact, most desktop manufacturers do have 1394 ports on their PCs. And Sony, Compaq, and HP all have high-end PCs that ship with DVD recorders. Unfortunately, however, Sony and Compaq support one standard while HP supports another. Both will burn DVD-Rs that play in most DVD recorders, but they have different standards for rewriteable media.
Until the standards war plays outââ,¬"probably by the end of next summerââ,¬"PC manufacturers will hesitate to install DVD recorders across low-end systems. There's no question, however, that home-video enthusiasts now have several low-cost options for software and hardware that can take video and move it onto more portable, and higher quality, DVDs.
5. The requisite off-the-wall prediction
Prediction: -Microsoft will embrace Linux as a distribution platform for its .NET technology."
Outcome: Obviously it hasn't happened yet. Microsoft did, however, announce that it would be supporting a port of the .NET Common Language Infrastructure (CLI) and C# to BSD UNIX. One reason is that the licensing terms are less restrictive than the Linux license distribution. Microsoft stresses that the BSD port of .NET is for academic purposes only and is not to be distributed or used in a commercial environment. But I still believe that what's best for Microsoft, in the long term, is to make .NET available on any O/S or hardware platform. I'm pretty sure now, though, that Microsoft disagrees with me.
Looking ahead
So there's the report card for my 2001 predictions. Not bad, if I do say so myself: I hit four out of five pretty much on target.
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