A Tech Market on the Mend

By Eric Lundquist  |  Posted 2003-12-22

A Tech Market on the Mend

The return of a pulse to the technology market after three moribund years was certainly the biggest story of 2003. Economic prognosticators put much of their effort into answering three questions. Are we in a recession? Are we coming out of the recession? How long will the good times last? However, far less analysis is expended concerning how this recovery will be different from those of the past. The huge increases in bandwidth and storage capacity provide the foundation for shifting technology development locations—and jobs—in a manner that remains contentious.

Another story was a paradox. At the same time that concern about viruses, bugs and computer security reached an all-time high, consumer purchasing via the Web continued to grow. Forrester Research predicts this Thanksgiving-to-Christmas period will see consumers spending $12.2 billion online, for a 42 percent year-to-year increase.

Virus writers and hackers continue to become more adept at finding security holes, and the constant rounds of warnings have led to low expectations that vendors will solve their problems. On the consumer side, the belief that credit transactions will take place securely is in evidence this holiday season. At present, people are more confident in doing their personal business and shopping via the Internet than they are in putting their companys operations on the Web.

One important technology story that was underreported in 2003 was the dissonance between military spending on technology over the last decade and the return on that spending in the current campaigns in Iraq and Afghanistan. This story is a corollary of the gap between armed forces that are geared for big World War II-type battles and the ongoing terrorist campaigns. The ability—so prevalent in business—to extract information from a sea of data has not been translated well to military intelligence. The need to retool our military technology for the new reality of the war on terror was a story in need of telling in 2003. It will continue to be one next year and beyond.

Next page: The battle for hearts and minds in the corporate technology infrastructure increased in intensity in 2003...

The battle for hearts

and minds in the corporate technology infrastructure increased in intensity in 2003">

The battle for hearts and minds in the corporate technology infrastructure increased in intensity in 2003. Sun suffered slings and arrows from the open-source and Microsoft forces. The open-source crowd claimed you could get Sun performance and scale at a much lower cost, and Microsoft made the same claim. By the end of the year, Sun seemed to find solid footing by claiming open-source pricing, Sun dependability and freedom to range outside of the Microsoft environs. IBM made great gains by leveraging its service and middleware business as an answer to infrastructure woes. Companies such as Salesforce. com and NetSuite led the way in proving Web-based applications really work.

For Microsoft, the technology slowdown was no more than a bump in the road. Of larger concern was the need to persuade customers to invest in a new round of server-based products while building interest in the next big operating system, "Longhorn." The advantages being touted for the next version of Office have shifted from personal productivity to group productivity. The advantages of Longhorn sound a lot like a return to the fat-client arguments of a better file system, superior user experience and improved security.

In open source, the question shifted from whether the technology is sufficiently robust to meet corporate requirements—it is—to whether the code is legal. As 2003 closes, the question of legality remains undecided in the courtroom.

In 2003, the story of wireless networks took a significant turn. No longer was it a question of whether it was possible to build a secure, reliable wireless network. The question instead became, Which wireless network do you choose? The value of standards was in strong evidence as the flavors of 802.11 were moved from standards to products at a rapid pace. In 2003, hot spots popped up everywhere from McDonalds to Starbucks. The wireless always-on network became available for $50 a month or less.

2003 will be remembered as the year when the stage was set to deliver on the promise of dependable, scalable and widespread corporate technology. With the economy rebounding, a significant measure of that promise may be realized next year.

Editor in Chief Eric Lundquists e-mail address is eric_lundquist@ziffdavis.com.

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