Last issue we spent some time posting our predictions for the year to come. It seems that around this time of the year this sort of behavior is standard operating procedure for computer journalists. As we pointed out last time, writing about the bleeding edge is much like living on it: You're working without a net. Predicting the future of this industry only tends to make the "without a net" part all that more apparent. This month, we'll use the high-tech miracle of 20/20 hindsight to take a look at what predictions did (or didn't) hold up for 1998.

The year that wasn't

So what did happen last year? According to many of the previous year's seers, 1998 either was to be the year the Internet collapsed or the year it became a runaway success. As we all know by now, neither one of these actually happened. The Internet, while still growing, is still (to us) a niche medium--far more people on this planet do not have Internet access than do, and until that changes we don't see the Internet becoming a runaway success.

But the Internet did grow, and with it came problems in the form of slowdowns and outright outages. In spite of the promise of "more bandwidth just around the corner," the Internet continues to get slower for the majority of its users. And while it didn't exactly collapse, performance on the Internet sometimes makes one wish it would so we could all just get on with our lives and cease the endless waiting. By the end of the year it was apparent that no immediate improvement in Internet performance was forthcoming. The delays and typical fumbles of the Baby Bells as they attempt to deploy faster last-mile access technologies like ISDN and xDSL and the inherent problems of circuit switched versus packet switched networks all have conspired with the Internet's growth rate to make it pretty clear that things will get worse before they start to get better.

Since we're walking through the doomsayers' realm already, let's take a look at a few more of the gloomier predictions for last year.

Last year, the popular and PC-biased press predicted the death of Apple Computer. It was all over except for the dirges, according to the pundits. Shrinking market share, improvements to Windows and lack of market visibility all were supposed to be the nails in Apple's corporate coffin. What actually happened was that Apple showed profits every quarter last year, simplified its model line, introduced highly successful products like the G3 PowerPC model computers and PowerBooks and re-entered the consumer market with the wildly successful iMac. It also revived its flagship operating system with exciting new releases and started the task of reinforcing its brand identity by creating industry award-winning national advertising campaigns. By the end of the year Apple was far from dead, showing signs of growth and profitability.

Netscape also was supposed to be on the endangered species list in 1998. Microsoft's Internet Explorer (given away free with Windows 95/98) was supposed to dominate the browser market by the end of this year, and Microsoft Internet Information Server AKA IIS (given away free with NT server) was supposed to have killed Netscape's server market. Again, reality didn't meet the pundits' projections.

First, the browsers are just about splitting the market 50/50 at year's end, and the market share is only that good for IE if you count the AOL users as IE users. Second, the most popular Web server on the Internet isn't Microsoft's IIS. It is the freeware Apache server from the Apache project. Netscape and IIS make up the largest bulk of the rest of the server market after Apache, depending on which surveys you believe.

And last, faced with the loss of income from its browser sales (giving away IE did hurt Netscape, after all), Netscape did two amazing things: first it opened to the public the Navigator/Communicator source code, allowing anybody who wanted to work on improving Netscape's browser to do so; and second, it recast itself as a major player in the Web portal industry. It also still focuses on selling its suite of servers to the enterprise market. As with Apple, stories of Netscape's demise were exaggerated.

Let's take a look at some of the more positive predictions made for the year that was.

The past year was supposed to be the year that ecommerce really took off. And it did take off--sort of.

On the positive side, bookseller Amazon.com was joined online by Barnes & Noble. The two of them are duking it out for the heart and minds (and pocketbooks) of online book buyers. Computer hardware and software sites also continue to do pretty well, as do online automobile sales sites.

But there are negatives, too. When you get past high-profile sites, the consumer-oriented e-commerce terrain starts getting a little stark. Home banking continues to fizzle along, despite repeated stories proclaiming it as one of the major "trigger" services of the Web commerce universe. Online payment--e-cash, credit cards and smart cards--continues to be a problem with no clear solution on the horizon. Further more, consumer surveys indicate that a lot of the online traffic at e-commerce sites is mainly window shopping. Users research their purchase online, then go out and buy it from a physical store.

There is an aspect of e-commerce, however, that not only has taken off, but has grown rapidly in volume and importance. The clear ecommerce winner from this past year was in the field of business-to-business sales. Apparently, it's because many businesses already are set up to deal with purchase orders, electronic fund transfers and EDI. The payment hurdles that business-to-consumer sites face are non-existent in the business-to-business online market.

Wide availability of sub-$1,000 computers was another prediction that came true. Almost every manufacturer offers at least one model in this price range. They are available, but how well they sell remains to be seen. So far, market research shows that many are lured into the stores because of the existence of these sub-$1,000 wonders, but walk out having purchased a PC in the $1,200-to-$1,800 range.

The move to selling computers online was also another prediction for 1998. It was predicted that most manufacturers would follow the lead of Dell and Gateway by directly marketing online to the consumer. Apple Computer joined Dell in creating a state-of-the-art online store for their products, as did Compaq, NEC, Micron and others.

Taking it one step further, Gateway created Yourware, which allows consumers to buy a fully decked-out Gateway computer of their choice plus Internet access all for monthly payments in the $50 range. After a few years the owner can trade in for a newer model and continue with the monthly payment plan.

Late in October, Apple Computer announced a similar plan for purchasers of its iMac computer. For no money down and $29.95 a month, a user can walk into an Apple retailer, get approved for credit while in the store and walk out with a new iMac. Apple also is willing to extend this program to cover any peripherals one might add up 90 days after the initial purchase. One expects other manufacturers to soon join Apple and Gateway with similar offerings.

While folks might have predicted that 1998 would see the Feds take on Microsoft, I'm not sure anybody expected Microsoft to come off as badly as it apparently has. Based on what has been revealed so far during the trial, Microsoft is far from the besieged market innovator that it likes us to think it is. On the contrary, Microsoft looks like an insecure giant that feels it must use a club to pound any serious competition into non-existence-that is, any competition that it can't successfully cut a deal with or otherwise intimidate. And who would have thought that the major evidence from both sides would take the form of corporate e-mail?

Share this post