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Technology developments this year started slowly but wound up in a merger and divestiture frenzy that shows no signs of letting up. But behind the headlines are some winners that wont emerge until next year. Here are my 2004 highlights, as well as predictions for what they will look like at the end of next year:
Feeding frenzy. If big is good, bigger is better, and biggest is best of all, according to the takeover philosophy of Oracle CEO Larry Ellison. Ellison is nothing if not dogged and determined to show that his prediction of widespread consolidation in the enterprise software space will come to pass—even if he has to do the acquiring himself.
Oracles $10.3 billion takeover bid for PeopleSoft was unfriendly and took a long time (18 months) to win consent. In addition, the negotiations have not proved that the combined company can support current PeopleSoft customers and persuade them to head to an Oracle-based environment. All the elements of the takeover run counter to the conventional wisdom about technology acquisitions and demonstrate exactly the point Ellison is making.
The acquisition frenzy is good news for all those little software companies running out of money and realizing a public offering will not be in their future, and also good news for SAP, which expects to gain from the unease of PeopleSoft customers.
I also expect to see a big surge in interest in open-source ERP projects (www.erp5.org for one) that promise a modular approach, instead of the big-bang ERP projects, and adhere to the open-standards mantra.
Telecom/mobile convergence. Once there were telecom operations and IT operations in companies, and rarely did the two meet. Now the aging RBOCs suddenly seem hip; mobile phone capabilities are outpacing those of PCs, and technologists need to be as conversant in VOIP as in XML or Linux. Still to come are mobile applications (especially in the CRM space) that take advantage of this mobility frenzy, rather than traditional applications that are simply tweaked for a mobile work force.
China calling. Chinas entry into the U.S. market had to happen; the IBM agreement to sell its PC line to Lenovo is only the most visible example. China has the manufacturing muscle, engineering expertise and government support to provide serious competition to U.S. vendors in the U.S. marketplace, which will witness new international entries of PCs, servers and networking devices. It will be interesting to see the reaction of U.S. companies that were quick to move jobs and development overseas, when those transferred skills translate into new competition on the home turf.
Searching through my desktop. Google, Microsoft and Yahoo have broadened their horizons by narrowing their search. The desktop computer file system—that last great black hole of lost files—is now the darling of the big vendors. I credit Bill Gross and the management team at X1 for being the first to not only recognize the need for desktop search but also to know how to market the search capabilities.
Now that you can search through your files, you can start to worry about other, unauthorized searchers mucking about your desktop. Security needs to be visible and capable of setting clear boundaries for what can and cannot be searched. The winner on desktop search will be the company that can best establish those boundaries.
The power of the network. Faster, more reliable networks make it easier to outsource applications and jobs and bring the reality of the truly distributed corporation closer. The missing elements continue to be programming tools and methods to weave together those outsourced applications, distributed programming environments and legacy operations that continue to provide the underpinnings of most companies.
The WebSphere business at IBM, Microsofts BizTalk and the Eclipse Foundation are working toward building the tools that in turn will build those integrated applications. What is missing are the business strategies to get the most use out of a truly connected company.
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Editor in Chief Eric Lundquist can be reached at [email protected].