The Upside of the Downside

By Eric Lundquist  |  Posted 2001-01-01 Print this article Print

A couple of questions and maybe a few answers coming into the new year.

A couple of questions and maybe a few answers coming into the new year.

Managed and hosted services were all the rage a year ago, but too few customers and too high a cash burn rate have shut down many hosting providers. Who will benefit? Watch enterprises with staying power. Scott Cook at Intuit has a strong financial-hosted model for small and midsize businesses. E-mail service providers will see an upturn once corporate evaluation processes are done. Even Microsoft seems headed down the right path with its NetDocs project. The hosting providers trying to grow within their cash-starved Net incubators face a tough future.

Whats the next big technology driver from government? I think youll see privacy laws that require major infrastructure investments in personnel and products. Private industry has failed to assure the public that security and privacy safeguards are in place for private data. Health and insurance records, purchasing characteristics, and the digital identity of private individuals will more and more fall under the sway of government regulation. And developing an online voting system that allows wide access while assuring integrity is a growth industry for this year.

Whats the upside of the dot-com fallout and the technology sell-off? Two items. One is a legacy of technology development that was rapid, well-funded and broadly dispersed. Smart companies are now pawing through the shattered dot-com pile looking to incorporate new technologies. The dot-coms fall was not the fault of technology but of irrational business plans. The second is a big round of bargain hunting for acquisitions in a deflated stock market. Companies have recognized they may never again see such bargain prices on companies that have had their development paid for by venture dollars and are now discounted for pennies on those dollars. The green light for acquisitions provided by government approval of the AOL-Time Warner merger will only spur this buy-up binge.

Since 1996, Eric Lundquist has been Editor in Chief of eWEEK, which includes domestic, international and online editions. As eWEEK's EIC, Lundquist oversees a staff of nearly 40 editors, reporters and Labs analysts covering product, services and companies in the high-technology community. He is a frequent speaker at industry gatherings and user events and sits on numerous advisory boards. Eric writes the popular weekly column, 'Up Front,' and he is a confidant of eWEEK's Spencer F. Katt gossip columnist.

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