2002 tech predictions get a low grade

Columnist Tim Landgrave reviews his 2002 technology predictions and how they fared as the year comes to an end. While he believes the sluggish economy was a major reason for his poor prediction grades, he's still pretty bullish on a few expectations.

The month of December means one thing for computer journalists who don’t have the sense to stop making predictions: It’s time to face the music! Before I issue my own (slightly biased) grades on my predictions for 2002, I think it’s fair to point out that no one—including me—had any idea how badly the tech collapse and the incidents of 9/11 would affect the overall economy.

I believe that many of my early 2002 predictions would have come true if the economy had been vibrant enough to support some of the technological advances that I foresaw. But, I’ve made enough excuses. Here’s how my original predictions actually panned out during the year.

1. The death of the ASP and ISP
With the “bells” (the Regional Bell operating companies or RBOCs) running roughshod over the DSL providers in 2001, and AOL and MSN pouring millions of dollars into building the consumer last-mile business, I thought it was a foregone conclusion that these forces would continue to dominate the Internet services business model by crushing the ASPs and ISPs.

As it turns out, I wasn’t that far off. Generic ASPs have virtually disappeared and all that remains are software providers that use application hosting as a distribution model. It seems the ASP model was never a new category of business but a repackaging of the distribution model used by software developers to spread software and services costs over a long time without the hassle or expense of leasing.

The ISP consolidation is also continuing. In my city alone, the number of ISPs has dropped from 10 to three. And ISPs have segmented into two very distinct entities. The first type attempts to provide connectivity services to business and residential customers that aren’t serviced effectively by the bells, MSN, or AOL—e.g., rural coverage, wireless coverage, or low cost, local-only DSL with other bundled services. The other type basically follows the business model I suggested—they’ve become Web services providers that eschew the title of ISP and instead use the more generic “Web hosting” or “Web services” labels.

So, as I predicted, the market has segmented into a few large companies providing connectivity services (with some boutique providers) and application services provided under a horizontal service label like Web hosting or a vertical software distribution offering.

Final Grade: A

2. De-emphasis on HTML
I predicted that as Web services standards emerged, companies would move toward exposing products and services in such a way that non-HTML clients could consume them and make corporate portals that were richer, more secure, and more spam-resistant.

I still think this will happen, but given the time it’s taken to get the Web services security standards in place, we’re still another year from this becoming a reality. One of the reasons I’m confident that this will happen is that this trend has already started on many intranets. Companies have begun wrapping internal systems with Web services front ends and creating highly functional portals that aren’t limited by HTML restrictions. It’s only a matter of time—and Web services security standardization—before the practice goes mainstream.

Final Grade: C-

3. Universal Internet Identity (UID)
I just plain missed this one. I really believed that there was enough momentum behind the universal identity movement that either Microsoft Passport or the Liberty Alliance group would find a way to drive the UID.

As it turns out, companies don’t want someone else to issue new IDs. They want to have standards in place that allow other companies to authenticate using IDs that they issue and then be authorized to use resources based on those IDs. I predicted that “Microsoft and members of the Liberty Access Project will agree on a Kerberos-based standard that allows Federation of identities…” As it turns out, I was right on this part of the prediction—companies preferred Federation. I just missed the fact that companies didn’t want or need a middleman to manage the authentication if these services were moved into the OS or onto a separate server managed by the companies themselves.

Final Grade: D

4. Bluetooth will disappear
OK, so Bluetooth isn’t dead yet but it’s been repositioned as a replacement for device cables (cell phones, keyboards, mice, PDAs, headsets) with 802.11 being repositioned as the replacement for network cables.

In other words, Bluetooth will become a replacement for the relatively slow and position-dependent IrDA ports on PCs and 802.11 will become the replacement—or an alternative—to the 10/100 ports.

Final Grade: C

5. The markets will recover to reasonable levels
I predicted that the Nasdaq would recover to 2,500 and the Dow would be back up to 13,000. At the time of this writing, the Nasdaq was at 1,484 and the Dow was at 8,862.

If I ever ask you for money to invest in the stock market, just say “No.” At least this is a prediction that we’re both disappointed that I missed.

Final Grade: F

6. HPAQ will never happen
I shouldn’t have been so bold. What I meant to say was, “if HPAQ happens then it will be out of desperation rather than sound fiscal or strategic planning.” But that didn’t sound as good. As you know by now, the HP/Compaq merger did happen.

As it turns out, I was right about one thing. Since the Compaq PC server, PC desktop, and PocketPC product lines survived, my advice to avoid the HP versions of these products turned out to be prophetic. I still don’t see how this company survives long term with Dell removing the margins from printers, consumables, and Pocket PC devices just as it did from desktop PCs and servers. And the HP consulting services group will continue to get hammered from IBM Global Services.

If HP leader Carly Fiorina can survive another year without having to gut the company, I owe her a big steak dinner and an expensive bottle of wine.

Final Grade: C

7. Emergence of peer-to-peer as a viable business model
Companies like Groove have never hit their groove. And electronic mail traffic continues to increase as companies use it to replace more costly forms of electronic communication—phones and faxes. The peer-to-peer (P2P) model is actually losing ground to the centralized server model because as companies implement new technologies like instant messaging, they want central servers to provide auditing, security, and other services that are cost- or technology-prohibitive in the peer-to-peer model.

That’s not to say that there haven’t been some successes. Napster has been replaced with BearShare, Morpheus, and Kazaa. These services combined to push massive amounts of traffic around the Internet. But none of it is legitimate, revenue-producing, business activity. In fact, the vast majority of this activity simply supports pirating copyrighted works. This exposes another flaw in the P2P model.

The technology has failed to catch on because no one has been able to come up with a viable revenue model. So the prediction that P2P traffic would increase was dead on—if I’d just left out the part about the business model.

Final Grade: C

8. Going out on a limb…and sitting there
I predicted that a simple programming tool would emerge that allowed everyone from housewives to CEOs to compose rich applications that aggregated Web services into robust Internet applications.

I based the assumption on the emergence of commercial Web services and a security and pricing model to support them. Without the Web services in place to stitch together, there was no incentive to create the programming tool.

I still believe this will happen, but the glacial pace at which the standards are proceeding has removed the incentive for companies to make the investment to develop the tool.

Final Grade: I (for incomplete)

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