End Game

I, Cringely . The Pulpit | PBS

This is my 603rd and last column for pbs.org. If you want to continue reading my work, please visit http://www.cringely.com, which is also in this week's links. Thanks for your support.

Everybody in my line of work writes prediction columns for the coming year, but I wonder how many we will see this time around? The world is unsettled. It's not just this damned financial nightmare we have to deal with but also a sense of between-ness, like something has just ended yet still lingers slightly though it is obvious that something new is about to arrive. But will it be a good something new? That's hard to tell. So for this reason I think the prognosticators will mainly keep their heads down this year. Except, of course, for me. I'm too stupid to shut up.

So let's get on with this experiment in humiliation. You know the drill. We begin with a look at last year's predictions to see how I did then jump into my predictions for 2009. If you care to follow along you'll find last year's predictions column in this week's links. For a real laugh you can find my predictions from many previous years in the archive.

I wrote a year ago that we'd see the beginning of a shift away from PC-centrism with other platforms beginning to supercede the venerable PC. This is a slow process as I said it would be but generally I think I was correct. Sales growth for PCs slowed in general while growth for smartphones and netbooks increased. I never said PC sales were going in the toilet but it seems clear that the action these days is elsewhere, so I'm going to claim this one.

I said the Digital TV conversion would be a nightmare, though the greatest pain would be felt in 2009 when the analog transmitters are actually turned off. I think this is correct. Poll your friends and you'll find most are in denial. While everyone has seen a DTV commercial, there are millions of people who still don't know what's happening. Free converter boxes are sold out, which ought to be good, but expected DTV sales have not met forecasts, so I say there are 10-15 million people who are going to wake up mad as hell in February. So I got this one right and claim it for 2009, too. While it may seem quiet now, February and March are going to be ugly.

I wrote that Cisco would acquire Macrovision, which didn't happen. Two right and one wrong. I still think Macrovision has to find a landing place somewhere or the company is doomed.

I predicted that venture capitalists would sour on start-ups with revenue models based solely on advertising, citing Facebook as an example. This one is hard to call because the general tightening in the economy has led VCs to push all their companies toward multiple revenue models and much tighter books. Still, I probably got this one wrong, though I'd say it is still coming.

I predicted that Google would bid and win the 700 MHz spectrum auction. They bid, true, and made a good effort at shaping the deals that resulted, but Google didn't win so this was wrong. I am not worthy.

I predicted that IBM would have bad earnings, would try to sell Global Services, and failing that might fund the sale itself. Wrong, wrong and wrong. IBM's earnings were saved by the weak dollar or I would have been right. They couldn't sell Global Services because no company was stupid enough to buy. But they didn't have to finance anything because the credit crunch came and it was clearly not going to happen. I'm the loser here. If you are keeping score it is pretty dismal, down to two right and four wrong.

I said Microsoft would indefinitely extend the life of Windows XP. I might well claim this one but -- like Wall Street -- I may as well take all my losses while I can. Yes, you can still get XP, but if you are an individual it requires downgrading from Vista so you have to buy Vista anyway. In the long run this strategy really hurts Microsoft because the made-for-Vista computers that are being downgraded to XP don't work as well and Microsoft's reputation suffers even further, if that's possible. Redmond sees this as a clever success on their part, too, which says a lot about the company.

Of course I had to say that Steve Ballmer was going to retire, too, though now I see him not following Gates for another 2-3 years. In the long run, though, he's toast, simply because things are going to get uglier and uglier for Microsoft. Two right and six wrong. Maybe it IS time for me to retire.

I said Apple would embrace multi-touch pointing in its computers. They did. Whew!

I said a 3G iPhone was coming. Yes! And an Apple subnotebook/tablet. No! This latter device remains in the wings, however. Four right and seven wrong.

Apple didn't license ANYTHING, much less its embedded OS X. Silly me.

Let's get this over with quickly. Apple DIDN'T license the Windows API, DIDN'T dump Akamai for Google (ironically Google became an Akamai customer), and Season 2 of NerdTV never appeared.

Final score four right and 11 wrong -- my worst outcome EVER and the first time I dropped below 50 percent. Obviously I have to start making vaguer predictions or move into pizza delivery -- probably the latter.

So, having lost all credibility, let's just leap into my predictions for 2009. Who knows, I might see a miracle and actually get one or two right.

These are in no particular order, by the way.

The economy and its many problems will clearly dominate 2009. We're in a recession that will last at least through the middle of the year and maybe longer. They way we'll buy our way out of it will affect the nation for decades to come. It is NOT a happy time.

1) The good news is that most recessions mean new IT platforms. The minicomputer hit its stride in the early '70s recession, the PC in the early '80s recession, client-server computing in the early '90s recession (notice these things happen every 10 years or so?), the Internet in the 2001 recession, and now we're about to see mobile take over in an even bigger way. Desktops will survive but most of the growth will be in mobile devices.

2) This one isn't what you'd expect. In 2009 there will be several HUGE cyber thefts as well as companies admitting huge cyber thefts that happened in previous years but were kept secret. The former will happen because the security infrastructure on the Internet is more fragile than ever while the latter will happen because companies -- especially banks -- will want to get every write-off they can while the news is so generally bleak. Who will care if they report losing $1+ billion or so to some guys from Russia or Nigeria three years past?

3) IT layoffs are going to happen, putting tens of thousands of technical people on the streets, yet STILL the big employers will be pushing for unlimited H1B visas to bring in technical people from South Asia. This mean-spirited and blatant age discrimination might be successful, too, unless the Obama administration does the right thing.

4) Intel will continue to dominate while AMD slowly suffers, but I don't see AMD being acquired in 2009.

5) Death of daily newspapers will accelerate and many papers will fail outright. When the Detroit Free Press announces it is ending home delivery on most days as they are expected to, well that's it. I thought this process would take longer but it is likely that half the daily newspapers in America will be gone in three years.

6) The next Yahoo CEO will dismember the company and sell it piecemeal, made possible by the fact that only the Internet companies have much real cash. The Yahoo name will survive but the company will not.

7) Microsoft will peak in 2009. By this I don't mean the company's shares will reach a peak value by any means, but its aggregate peak of wealth and influence will be reached and everything will be slowly downhill from here, accelerated primarily by the efforts of Apple. Microsoft hasn't been able to find a franchise to replace the PC. Games are big but not profitable enough. Mobile is too crowded. Content they simply aren't good at. That leaves Enterprise and Microsoft can dominate that only as a smaller company, so smaller it will become.

8) The catalyst for Microsoft's decline will be when the world's most influential IT analyst, Walt Mossberg of the Wall Street Journal, writes sometime this spring that he can no longer see any reason to own Microsoft products. He could have written that story a year ago but it is taking Mossberg time to get up his nerve, but he eventually will.

9) Not only will Microsoft peak, Google will, too! Oh Google will continue to grow for another decade or more, but as a technology leader Android is probably the peak. The company is too fat and happy to be a technical leader for much longer. It's still a good investment, though.

10) If Microsoft and Google are down then what's up? Apple! This could play out a number of ways. Apple will certainly continue to grow its Macintosh market share. iPod growth may be softening but the iPhone will make up for that. Still, faced with Android I think Apple will drive its content business through an acquisition in the cheap-or-free networking space (remember it was Apple that came up with WiFi in the first place) to stake some claim on the last mile. But even more importantly, at some time next year Apple will take the gloves off and go head-to-head against Microsoft Office, driving margins down for Redmond and generally making trouble.

11) My last prediction for 2009 has to do with venture capital. While investments in technology will continue, the really smart VCs will realize there is a much better and more certain way to make a ton of money in the short term: start a bank. Look for the rebirth of community banks, in this case backed by VCs. Work with me on this one. There is no credit available because the big banks won't lend. But it takes only about $20 million to start a very fine little bank that WILL loan money because the cash can be acquired from the Fed for almost nothing and lent at high rates to technology companies that can pay it back. By creating banks the technology industry will become self-funding. And when the big banks finally stop being frozen with fear and want to take back the lending business, they'll have to buy all those little banks for at least a 10X multiple. It's not like starting Cisco or Dell, but a 10-bagger business model that can be replicated over and over again while actually helping the nation can't fail.

That last one was my gift to you, America and the world. Thanks for 11 good years.