January 3, 2001

Looking backwards on 2000 predictions

Author: JT Smith

-By Jack Bryar -
Open Source business -
The month of January is named after the Roman god Janus, a
minor deity in charge of gates (not Bill) and doors. He was also
considered the god of beginnings, a being who could foretell the
And since Roman times, writers have felt obliged to knock out a column
full of predictions about the coming year every January.

But Janus had two faces. He had to look into the future and the past
simultaneously, because in order to know where he was going, he needed
to be able to see where he had been. Since I began this column, I
pledged to spend one moment each year to share the occasions when I've
been hilariously wrong as well as note those few times when I made a
forecast that turned out to be right. There's no point in reading
predictions unless you know whether the author has ever been right
anything in the past.

I stuck my neck out a number of times last year. I suggested that
fear of outages
hacks on the Web
would slow the enthusiasm for Web commerce in many
executive offices. I suggested that poor
security in Canada
would make that country a favorite venue for
hackers, and that flaws in Microsoft's systems would result in incident
after incident...
and that nothing would change. I predicted that Linux services
would be a good business, that WAP would
be a blind alley
, and that unglamorous back-end systems and next-generation
would be "killer" Linux applications

So how'd I do? It's still a little early to tell, but I think I've
had better years, to be truthful. I was sure that Web services would
proliferate and that Internet banking would be
the next big thing
. Alas, Web banks sucked, even more than the
'n' mortar variety, hard as that was to imagine. Web-based B2B services
did grow explosively, and Linux based servers were a big element of B2B
systems, but I had to admit that many of articles written by me and
others about the triumph of Linux in this sector
were a little premature

As always seems to be the case, I figured technology would move
a lot faster than it actually has. It's a common mistake. After all,
Arthur C. Clarke jumped the gun a little concerning the likely state of
computing technology in
the year 2001
. I wish he had been right. I wish I had been right
when I said that 2000 was going to be the year that DSL and cable modems
. That turned out to be a little optimistic, although my
suggestion that consumers would be complaining about the need for
better service hasn't been too far off target. In those places where local
telcos didn't fight the rollout of the technology every step of the
DSL service has been pretty good and there's been a positive
effect on the local economy

Both the economy and technology moved slower than I anticipated. I
thought that the dot-com economy was teetering on the brink of a crash
August ... of
. Admittedly, some of the air began to come out of the
bubble before last January, but jokes about dot-bombs didn't start to
circulate before this summer. In the interim, I had talked about how to
dotcoms with a deathwish
(Look for firms obsessed with growth over
profits, trying to do everything simultaneously, and loaded with
egomaniacal executives with no focus). And in April, when I heard the
White House declare the stock market to be fundamentally sound, I
suggested we were headed for
a Nasdaq car crash
. "When major politicians start telling you
stock market is fundamentally sound ... RUN!"
So was that a good
prediction? Or just more proof that, if you are pessimistic long enough
about anything, you will usually turn out to be right? I don't dare

, I said that Linux stocks were going to be particularly
vulnerable, if the larger tech market began to crash. I suggested the
lack of an agreed on valuation model for Linux was looming as a big
issue, as was the lack of an agreed on model for evaluating
the total cost of ownership
for firms adapting Linux versus some
other platform. I also said that most Linux specialists were so small
that it would be nearly impossible for them to grow fast enough to meet
the expectations implicit in their initial stock prices. And, as the
year has gone on, many Linux pioneers have
been trashed in the press
. But I can't say I expected to see stock
prices drop by 90%.

Does it matter? Stock prices and actual business prospects are
frequently unrelated. I wasn't sure how much Linux firms were going to
benefit from the Linux boomlet, or
how much they might suffer
if the economy slowed down. I'm still
sure. I do know that while every traditional I.T. vendor got
into the Open-Source act
, that others among the early pioneers,
firms like Corel and Cobalt began
to walk away
from their earlier commitments to Open Source. That
trend intensified
as the year went on, as IBM committed billions to
the Open Source model and Corel ran in the other direction.

One thing was certain; despite accumulating losses, most Linux firms
were hard to kill. Even the
most vulnerable
hung on for another year. Still, if your name is
Linuxcare, and your biggest news was winning 10 new customers, your long-term prospects are still a bit iffy,
and may get more so. Funding has been getting hard to come by. Last
fall, I noted that some
VCs were coming back
into the market. That's turned out to be
optimistic. Money hasn't dried up entirely, but amounts have been
smaller and the deals have been tougher. Many VCs were having a hard
time raising money for new projects, but there hasn't been much of a
Linux shakeout yet, unless you count near-death of LinuxOne, and I never
, although I was kinder to their founders than most tech

I angered a number of readers when I compared the views of Republican
and Democratic presidential candidates
toward Open Source,
Microsoft, and software contract law. Was I unfair? We'll see. Remember
Virginia's Gov. Gilmore, of UCITA
? During the UCITA controversy, Gilmore helped orchestrate
articles in the conservative press that demonized the Open Source
movement. And now he's been made head of the national Republican Party.
Tobacco and Microsoft lobbyist Haley Barbour is frequently mentioned
a principal economic advisor to President-elect Bush. And presumptive
attorney general John Ashcroft is considered an antitrust skeptic. All
this should bode well for Microsoft. But Bill Gates's less-than-honest
performance in front of Ashcroft's Senate committee in 1998 reportedly
infuriated the future AG. Even so, a Republican administration almost
certainly means that David
probably won't be
kicking around Gates or Ballmer next year.

I've tried to be balanced. If conservatives want to complain, I want
to point out that I said that the biggest threats to civil liberties on
the web in Y2K came from
the left
, in the person of the UK's Jack Straw, a good socialist
bureaucrat and a thoroughly bad man. It was a bad year for intellectual
freedom in the UK, where industry groups like the
made the Recording Industry of America look almost reasonable,
). And I noted that it continues to be a bad year for Internet
civil liberties in China, and that U.S. corporations are
making a bad situation worse.

My story on the patent lawyers and the
U.S. Patent and Trademark Office
drew a lot of fire, and I got
several nasty notes from a number of U.S."intellectual property"
attorneys. The U.S. Patent and Trademark Office's Todd Dickinson is still there, at least for the
moment. But the office's wholesale granting of "business methods"
patents drew a lot of scorn around the world. And Dickinson has
retreated somewhat. Perhaps mindful of a potentially huge dustup
concerning claims by British Telecom that they
"own" the rights to hypertext
, Dickinson has taken to warning I.T.
Biotech firms that they need to avoid taking advantage of their new
patents, and he has urged them make deals "on reasonable terms." He
recently aid that he is concerned about a "backlash" that could reach
Congress or the courts next year, "undermining the whole patent
Quite possibly, Mr. Dickinson, quite possibly......

So it was a mixed year. I did get a few stories right; I suggested
that the Cyberpatrol was damaging Mattel's reputation
and management
so badly that neither the relationship nor Mattel's
executive team was likely to survive the mess. My suggestions about
making Open Source part
of any "technical" fix
of the U.S. voting system did get picked
in the larger press. And, by coincidence, organizations like Safevote and the Internet Voting Technology Alliance
set specifications that now include Open Source code. I think my
overall assessment of the Linux business model has remained just about
right, for better or for worse. It was an interesting year. I'm glad I
got to share it with you.

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