|
 January 2002
Last
year was a dismal year for forecasters: for economists predicting that
the US would avoid recession, and for technology
pundits, whose reputations lie bloodily scattered in the office parks of Silicon Valley.
The technology industry is particularly
unpredictable. It is subject to the increasing returns phenomenon, in
which new software creeps up to a critical point of market acceptance and
then suddenly sweeps all before it, and to infectious fads, such as
online music-swapping.
And technology marketing is especially
prone to hype. The lines are blurred between forecast, self-fulfilling
prophecy, and marketing spiel.
Technology predictions have been awful
since the stockmarket turned down in 2000.
Technology stocks ignored the buy recommendations of once-adulated stock
analysts; the much-hyped wireless internet did not take off; and
broadband access providers went bankrupt.
And
the forecasters have paid the price. Henry Blodget,
the internet bull who forecast a doubling in Amazon.com's
share price, left Merrill Lynch after a series of investor lawsuits.
Journalists who raced to discover the future first are now being told by
sober editors to focus on companies with real revenues. And those who
said the internet changes all the rules have egg on their face.
So
it is with trepidation that I venture forecasts for the industry in 2002.
Military
technology: The technology-industrial complex has leapt to identify
business opportunities arising out of the 11 September attacks. To that
end, a wave of investments in ventures offering high-tech security. My
bet: most extra funding will go to traditional defence
manufacturers to build traditional military equipment.
Instant
messaging: This software, which allows internet users to chat online with
friends in real time, is central to the online experiences of US
teenagers. With instant messaging built into Microsoft's latest version
of its Windows operating system, the habit will be taken up by
professional users the world over. Employers will worry about time wasted
on office gossip.
Remote
working: The September attacks made people more nervous about working in
large buildings, but a bigger influence is the availability of high-speed
internet links. I’m writing this from a village in Thailand. It may not have a cashpoint machine or even a surfaced road, but the
internet is available everywhere. Remote working is an old idea whose
time has come.
New
mobile devices: Small screens, letterless
keyboards, expensive connections: hardly a recipe for mass adoption. But
there is a device I’d have liked for Christmas: the elegant new
‘hiptop’ from Danger, which acts as
a mobile phone and lets the owner to pick up email and send instant
messages to friends. With expectations of the mobile internet now
lowered, such products may be competitive.
Web
services: Techies, venture capitalists and entrepreneurs will still talk
about applications that can be harnessed together over the internet. For
example, a catalogue shopping system can be welded to a payment system
developed by a different firm. But practical uses will be rare.
Enterprise software: Due for re-evaluation. Many
VCs pushed their portfolio firms to sell to the IT departments of major
corporations because that was where the money was. But, as the Fortune
500 cut costs, they are questioning spending on expensive systems such as
CRM. In a recession, spending on enterprise software shows questionable
returns.
Unemployment:
The internet generation of entrepreneurs and VCs will come back to earth
with a bump - many of them are functionally unemployed and the brutal
truth is that they are often unemployable.
Piracy:
Despite the suppression of Napster, all attempts to stop online music and
video piracy will fail. Official online music sites, such as MusicNet, will falter, because they fail to offer the
range of music available on pirate services. Music labels will merge
their services yet find it impossible to compete with free. It will
become as easy for a consumer to ‘rip’ a DVD as it is to
strip digital music from a CD. And after music, Hollywood.
Revenge
of the dotcoms: The real story in 2002 will be the resurgence of dot.coms. The survivors are still growing and
internet usage is still increasing. And in 2002, the internet may
actually have a revenue model. The spread of services like Paypal, which lets users email money, may allow
internet companies to charge just as mobile phone firms do.
Scepticism: Expect to see more doubt cast on
forecasts. For instance, Red Herring sees nanotechnology, the engineering
of objects on a microscopic scale, as one of its top 10 trends for 2002.
This smacks more of VCs in search of a sector whose potential returns are
so far in the future that their funds will not need to prove themselves
for at least half a decade. Nanotechnology, genomics, microgenerators,
distributed computing as the next boom … I don't think so.
Earlier Management Today columns
Dec 2001: Keeping the
talent in its place
Nov 2001: Sales people
are not like you and me
Oct
2001: Europe: did anything happen?
Sep
2001: It is all about timing
Aug 2001: Stop calling me a
visionary
Jul 2001: Not so much a
recession as an extended vacation
Jun 2001: Fucked company
May 2001: The mighty are fallen
Apr 2001: Wireless, finally, I
believe
Mar 2001: Lessons from the last
time round
Feb 2001: Silicon Valley comes
down to earth
Jan 2001: Enterprise software,
fashionable again
Dec 2000: Jaded, saved by DivX
Nov 2000: Reality, distorted
Oct 2000: Maybe there is no new
new thing
Sep 2000: The tricks of raising
venture capital
Back to nickdenton.org
|
