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Cringely's Predictions for 2004

Via Slashdot comes word of Robert X. Cringely's predictions for 2004 (my comments in italics):

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. The original Xbox was perhaps the best 1.0 product in Microsoft's history. They studied Sony and Nintendo and avoided their mistakes. Instead of memory cartridges, the Xbox comes with a built-in hard drive (which, once one gets used to, is hard to live without). Instead of making networking an add-on product, the Xbox builds it in. Instead of an alien API, the Xbox uses a variant of the same DirectX APIs that Windows developers already know. The only thing Microsoft got wrong with the Xbox was shipping it too late. By the time it came out, Sony was already well in front with the PlayStation 2. Microsoft won't repeat that mistake with the Xbox 2 versus the PlayStation 3. Whatever else one might say about Microsoft, it is a smart and relentless company. To bet against it in this space is a leap of faith.

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. This seems like a gimme prediction. Sure.

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. I think Cringely's on target with this prediction, but doesn't get to the interesting part. Yes, Microsoft will propose new protocols to fight spam. But so will other vendors, and some of them will begin to be adopted. By the end of 2005, SMTP and POP3 could be breathing their last breaths. If solid, truly open protocols are proposed, and a few major ISPs adopt them, it could create a cascading effect.

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. The sun rose yesterday and today. I think it's probably going to rise tomorrow, too.

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. I don't see the evidence of this "crisis." Indeed, what I see is the Linux community forming new ad hoc structures and response patterns to deal with such a malevolent threat.

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. Absolutely right on target. I'll go further: I think some SCO people may be doing jail time by 2005.

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. I agree that the Burst case will be significant. I've heard conflicting reports on whether the judge in the case has been truly outraged by Microsoft's pre-trial behavior (as Cringely has alleged in the past) or not. Either way, something has to give here.

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. Cringely fails to mention that one of the key drivers for this is Voice Over IP (VOIP). I've just subscribed to Vonage myself, and though the service isn't up to traditional Baby Bell/AT&T standards, I can't imagine going back to paying for long-distance minutes on my landline. Now I want to figure out how to hook my cell phone into everything so that I never pay incrementally for another long-distance call again. It's true that cable operators have the advantage here: there's not much logic in using DSL for VOIP. As for electric utilities, watch ham radio operators and other spectrum users to fight them based on what appears to be very real evidence of interference from delivering IP over power lines.

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. I'm probably going to regret saying this, but it's hard to imagine Dell going into the retail channel and doing well. Their price advantage will evaporate and their legendary customer relations (which I, as a Dell user, don't think are all that great) will suffer horribly.

10) Cisco will not only maintain its leadership in networking, they'll make big inroads into managed storage against companies like EMC. Not my domain. If Cringely says so, sure.

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. I agree that something needs to happen in the Wi-Fi aggregration business. As for Cringely's new model, I wonder if this will be like his wacky model for online music?

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. I don't buy the Wal-Mart argument at all, not one bit. First, we know that Apple only breaks even on its iTunes Music Store business, using it as a loss leader to drive iPod sales, which is where the money is. How will Wal-Mart make money on this? Second, who thinks that twentysomethings (who are driving online music sales) want to buy their music from Wal-Mart? Music is about attitude, about appearance, about being hip. No one with a shred of hipness buys anything from Wal-Mart that could ever be traced back to it. Apple has done an incredible job with the iTunes Music Store, and they're establishing iTunes and iPod as the branding for digital music. Meanwhile, Microsoft is attempting to pull a typically Microsoft maneuver, establishing a framework for delivering secure music and then presuming a mass of third-parties will outmuscle its one big competitor. Again, I don't buy it. Apple has the branding and the simplicity. The Microsoft-based online music stores are fragmented and confusing to consumers. Apple is winning. As for a video iPod, I'd love to see this, and I think Apple could take just as much leadership in this area as they have for audio.

13) No Apple G6 in 2004, and the company won't sell nearly as many G5s as it hopes. Why would they need a G6? They've already announced their G5s will be running at 3.0 GHz by this summer.

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. This is presuming that the average American cares far more than Cringely believes about what happens in high-tech. This issue is going to be way, way, way down the list.

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.With regard to settling lawsuits, again, that sun just keeps rising. What's up with that, anyway? As for Bill Gates winning the Nobel Peace Price, if he keeps doing such good work in the Third World, he might just deserve it at some point. Did I say that with my outside voice?

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