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Why 2002 Will Be Better Than 2001
Commercial Web Sites Will Make Money in 2002
Commercial Internet expansion will not stop just because some of the most-publicized early dot-coms were run badly and are now going broke. For every Amazon that goes down, there will be another company like J C Penney that expands its Web presence and turns it from brochureware into a complete online shopping experience, another airline like Southwest that decides to rely more on its Web site than on travel agents to sell tickets, and a whole new crop of online businesses that will be started by people who learned their lessons from the first burst of ecommerce and will be more hardheaded and profit-oriented than their predecessors.
There may never be as much venture capital looking for silly Internet schemes as there was before 2001, but so what? I started the limo business that gave me the "Roblimo" screen name without venture capital, and it is a lot more expensive to buy limousines than it is to make a Web site. I have many friends who own and operate small and medium-sized businesses they founded either with their own savings or with the help of friends and family, who are making excellent livings today and aren't thinking about going public or getting bought out. They take in more than they spend every month, expand a little at a time, and that's all they need to keep them happy. I believe we will see more of this thinking applied to Internet businesses in the future by both small-timers and big companies. The land-grab mentality is over. The Internet is now part of the business landscape, not something special.
Internet businesses will still come and go. The classic figure is that 80% of all small businesses fail in their first five years. But plenty of online businesses will grow and prosper, buy or lease server hardware, and hire programmers and Web designers. They aren't going to do it in frenzied end-of-the-20th-century style, and the days of workplace-as-playground are probably gone, but there will be more Internet jobs than ever once we get through today's shakeout.
Hardware Will Wear Out
Advances in hardware, especially desktop and laptop units, have been negligible over the past few years. Yes, you can now buy a GHz uP for less than you paid for a 500 MHz one a few years ago, and RAM is cheaper, and so on. That's all very nice, but it means nothing. A majority of desktops and laptops in the world today are used for nothing but running business software, email, and Web browsing. In this context, rather than in the geek/techie world of speed for its own sake (and for game playing), there is little practical gain in doubling CPU speed, and a 20 GB hard drive is plenty big enough, especially for a business desktop connected to a network -- as most are nowadays.
The generally accepted lifespan of a computer in the world of corporate accounting is about three years, and the IRS depreciation schedule says it's five years. So all those computers purchased in the last half of 1998, in all of 1999, and into the first quarter of 2000 are still new enough that there is no compelling financial reason to replace them. But computers wear out. Keyboards get grungy, monitors get dim, and cases start to get a yellow tinge even if they are cleaned regularly. Hard drives crash after they've spun around umpty-ump times, and parts failures in general increase with age. A manager who is trying to look thrifty might not feel comfortable asking to replace two-year-old computers, but can easily justify replacing three-year-old computers that are starting to need regular repairs. And after five years, when those computers are "depreciated out" by IRS standards, and buying new ones can start the depreciation tax break cycle all over again, it becomes mighty tempting for even the worlds' most penny-pinching boss to start taking bids for new boxes.
Computers bought in 1997 will reach the end of their tax-depreciation life next year. Computers bought in 1999 will be three years old in 2002. Even if no great new technologies hit us in the next few months, we are going to see a lot of old computers replaced before long, probably starting in the fourth quarter of 2001, in a cycle that is going to continue for at least another three years after that.
Why Corporations Will Happily Lease Software
As co-owner of DSM&RM Inc, the holding company that owns Robin's Limousine and rights to any freelance writing I do outside of OSDN, I love to lease instead of buy. For many years, the limousine I drove was owned by a corporation controlled by a friend, who leased it to me. We did this because limousines, like computers, have a five-year tax depreciation lifespan, while lease payments are 100% deductible in the year you make them. It gets a bit more complicated than this in practice, and you can buy up to $20,000 worth of computer equipment and deduct it all in a single year, but Slashdot is not a tax advice site and I am not a CPA or a tax lawyer (and this article should not be considered personal or corporate tax advice, which you should only get from a qualified professional) so we'll keep things simple here.
Suffice it to say that from a tax standpoint, most companies consider leasing better than buying. And as a side benefit, leasing leaves capital in your hands to carry you through a slow month or make a sudden purchase instead of tieing it up in things like computers, limousines, trucks, bulldozers, office furniture or whatever -- or in software, which the IRS allows you to depreciate over three years.
You can laugh at the idea of software having a three-year lifespan if you want, but that's the IRS rule right now, and if you look at Microsoft's release cycle, you'll notice a three-year pattern. You may not like Microsoft, and the company may make a lot of mistakes, but when it comes to macro-marketing, especially in the commercial arena, their people generally know what they are doing. And Microsoft is turning to software leasing.
"Ha ha," lots of techies say, "Who in their right mind is going to lease software instead of owning it?"
Answer: Lots of corporate managers who listen to their financial people and tax strategists.
Besides tax advantages, leasing software with upgrades as part of the deal makes software budgets predictable, and unless your business is software, you'd just as soon not spend any time or energy worrying about it. It's lots easier to sign a lease contract once every two or three years than to constantly track software upgrades. I'd like to do that myself. Of course, since my business runs entirely on Linux, I am not interested in leasing software from Microsoft. But isn't the Red Hat Network essentially the Free/Open Source Software equivalent of a Microsoft software lease program? If I sign up with Red Hat Network, every dime I spend on it is tax deductible, and I have a fixed-price contract with a known company that (for a fee) makes sure my computers have the latest stable versions of all the software I use, and will take care of security patches and upgrades so that I don't have to worry about such things and can concentrate on running my business instead.
And note that everything I say about my tiny, home-based business applies even more to larger companies. I have five computers, three of which are critical for everyday operation. If you have thousands of computers, anything that makes managing them and making their cost more predictable is worthwhile. Whether you are using Macintosh, Windows, Amiga, OS/2, BSD Unix or Linux doesn't matter. Money and taxes are totally OS-independent.
Open Source Opportunity
What I -- and most people in business I know -- really want from our computers is to have them do their jobs without any fuss. I have more personal commitment to Open Source and Free Software than most small business owners, and I'm more than typically willing to experiment with hardware and software, but in the end my main desire, most of the time, for my business computers, is to not think about them at all!
For me, business computer nirvana would be the ability to write a single monthly check (of moderate size) to a local company and have that company take care of all my computer needs. Other than out of curiosity, I wouldn't care whether my computers were running an RPM-based or Debian-based distribution. As long as my computers worked reliably and ran all the software I needed at a reasonable speed, I'd be satisfied
There are plenty of systems packagers and value-added resellers [VARs] that provide this level of service for Windows-based business computing, but few for Open Source users. This is silly, and it is going to change. There is a grand business opportunity in this area for small entrepreneurs who don't have a lot of capital, and it continually shocks me that companies like VA (which owns Slashdot, remember), Red Hat, and others that play heavily in the Open Source sandbox haven't been encouraging resellers and systems packagers all along, right down to providing franchise-style "Linux Consultant in a Box" packages complete with "approved" software, "certified" hardware packages, and all the rest of the support structure that has long been availbale to Windows-based VARs.
This is not the first time (or place) I've suggested this business opportunity, and it won't be the last. But now that investment capital is not easy to come by, and Linux companies need to make profits just like car parts warehouses and all the other businesses in the world, maybe a few more people will listen to the idea.
What I Say Here Doesn't Matter
Real life is real life. It will take its course whether you agree or disagree with what I have said here. Aging computers are going to wear out and get replaced either way. The cost of developing proprietary software is going to keep on rising, and Open Source is going to become an increasingly attractive alternative. Sooner or later -- probably sooner -- at least one innovative politician will claim he or she can save taxpayers millions (on the local or state level) or billions (on the national level) by switching from proprietary to Open Source Software and, especially if the local, state or national economy is in "down" mode at the time, will get additional votes by taking that stance. Other politicians will notice, and suddenly you'll see Linux and Open Source popping up all over the place in government buildings, even (perhaps especially) on office desktops.
IRS policies have -- and will continue to have -- more effect on corporate computer purchasing policies than all of the articles and comments on Slashdot put together. All the dying "pure" dot-coms in the world aren't collectively spit next to the big, established companies like J C Penney and Wal-Mart that are just now starting to pick up steam on the Internet (and are hiring laid-off dot-commers). And even these giants aren't going to have as much of an effect on Internet spending over the next few years as the millions of small businesses that are only now discovering that a Web site is less expensive (and often more effective) than a big Yellow Pages ad.
So relax. Whatever you and I say or do, things will be better next year than this year for almost everyone who works with computers or the Internet. And while Linux and Open Source may not dominate the world as fast as some people would like, you are going to see them become steadily more popular over the next few years, no matter what happens to any particular Linux or Open Source company.
They will not. They are just another business model.
First off, the internet. The only companies that can make money online are companies that can also make money offline. There is nothing fundamentally new about the internet, and by the law of diminishing returns it is a lot less revolutionary than the telegraph and telephone were in their day. It eases communication and remote business, sure, but it does not provide some new paradigm. The people, usually the High Priests of Wired magazine and denizens of this site, who claim that the internet is radically new are completely wrong.
Open Source, too, does not change business plans. Microsoft is moving to .NET and distributed application hiring models anyway. Redhat, Sun and the like are doing the best they can to keep up with this. Because in 10 years most businesses will be running dumb terminals and applications will be actually running inside the software giants houses, whether something is open source or not is largely irrelevent. This is the new reality we are moving too - what matters is not Linux, Windows and other OS's, what matters is applications and the ability to keep them up stably. MS can do this, as can Red Hat and Sun and IBM. We will see the return of an effective closed source business policy, as Red Hat will be leveraging its .NET equivalent, and customers will not be able to access the source code as said source code will be running on Red Hat's machines.
My view is that all the twaddle talked of new paradigms and so on is just rot. Business models haven't changed since the 1850's in any significant way. The law of declining returns is showing that new technologies effect our profit making capabilities less and less.
The British East India Company, the largest company the world has ever seen (who said multinationals were a new phenomenon? They have benefitted us for a couple of centuries, and are smaller now than they were last century), had a business model no different from Microsofts. While people may despise MS, I must say that as a libertarian I cannot in all conscience say that I would like them to be punished. Libertarianism is about allowing companies like MS to do what they want, as the market is always right. I agree.
--
- Enter the niche market, want a Transformers T-shirt?
Actually I do want a Transformers t-shirtAlex Bischoff
---
Alex Bischoff
HTML/CSS coder for hire
Good idea, it will be cheaper to replace the employee.
( N O T )
Wait a minute, you're saying that people paying RedHat $50 instead of paying Microsoft $100 means $50 less into the economy? Can someone explain this to me? Won't consumers just spend that $50 on something else (maybe hardware?), thereby still injecting the full $100 into the economy? It's just going into RedHat and some other company, instead of into Microsoft.
--
$x='S24;r)>63/* h@<5+oZ)32"5cz';$me='phroggy'x$];
$x=~y+ -xz+\0-Tx+;print$_^chop$me for split'',$x;
Historically recessions last 1/3 as long as expansions. Most economists believe the recession will last until 2005. Historically software engineers had to reach near total unemployment before a recovery started and we're not there yet. Either enough had to get disenchanted to drain the applicant pool or enough had to get fired to motivate startups before a recovery could happen. Unfortunately most CS majors who got laid off before 1993 left the industry and leave little perception of reality to today's CS majors.
What's going on in the US economy is a financial hangover from the binge-drinking VC funding of questionable Internet startups. It's not like computers or the Internet is going away. Businesses are going to leverage network technology a lot more adroitly in the near future. Businesses exist to make money, not change society. Those ventures that forget this are soon dispatched.
While I'm uncertain if more friendly tax laws for R&D will revive the bull market, I do think that it will only take a few months of investor wound-licking before a new surge happens. Despite the machinations of Al Greenspan, economic surges are a bottom-up phenomenon.
We are in a time of correction. Consumer and VC spending will be forth coming. Unlike the recessions of the Reagan years, this economy has some very strong things going for it. Investor fear will soon diminish.
It might be a good time for techies to take a vacation before the next wave of startups locks them away from sunlight again. ;-)
In the case of a lease, you're NOT allowed to use the software if you don't pay. With the way things are right now, if things don't work, you don't need the "enhancements" you don't buy a nev version. It's not leasing right now and frankly, I don't want it that way.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
Depends on percentages. You can deduct a percentage of the machine proportionate to the business use and it'll pass an audit- because it's allowed for in the Tax Codes.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
Leasing equipment makes some small sense for small business- leasing software is a disaster.
If you own the software, you own your data.
If someone else owns the software, it is thier data as they control every aspect of it's use- especially if you're leasing it. If they don't agree to your usage, you're not entitled to it after you've put it there.
Personally, as a businessman, I don't want anyone except myself owning the information that I use and collect on a daily basis. If a business sees that, they're not going to like leasing as it's a liability not a benefit like it might be with physical items like equipment.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
Well said. The constant that exists is that people have to eat, and they will invent ways to make a living if the old way doesn't work anymore.
Eliminating inefficient uses of people causes those people to find other jobs, hopefully in more efficient tasks. This helps to drive the economy forward, because the global productivity value goes up.
If tits were wings it'd be flying around.
Roblimo is right, for us Americans, taxes can have a huge impact on what you buy.
If you don't have a homebased business, you should, it's amazing what you can deduct. And the IRS rules let you get creative on deductions. Ie, computers must be depreciated over 5 years, but I think you can claim parts all in one year. Buy a $50 Pentium, deduct it $10 a year for 5 years. Buy a 40 gig HD, a Pentium 500, 128 Meg of RAM, a burner, that's all supplies/office expenses, $600 you can deduct right away (about $150 back in my tax bracket).
So, gentlemen, start you SOHO businesses.
later, thermo
More money in the economy, less money in the consumer's pocket, less consumer confidence. It's six of one and a half-dozen of the other.
The Free Software Movement was an inevitable response to the way corporate america was handling software development. We let Microsoft do it their way for a long time, and computer experts were frustrated because the "hood was welded shut".
Interoperation is there, but done poorly. Microsoft had no interest in the internet by themselves, it took other people to point out that it was the next big thing.
Was I the only one to notice that Microsoft quit shipping a free programming environment many, many years ago? Now why the hell would they go and do that? Because they hate developers. Developers are their primary source of competition.
We won't see the fruits of the free software movement for another decade (in a way), and there had to be a downside when the overinflated market corrected itself.
The free market can work wonders, but it isn't very innovative. Something like government investment in R&D or free software has to come along to shake things up every now and then. It's life.
This is an old argument, trotted out and tarted up for review every time some new technology or business practice leads to greater efficiency. Unfortunately history has proven this argument to be a fallacy. It never makes sense in the long term to stick with a less efficient means of production. Never, ever, and greater efficiency has so far lead to every increasing wealth. Somehow all those manually telephone switchers found jobs elsewhere in the economy when automated switches replaced them.
It is getting to the point now where in my projects I can usually search the net and find a piece of free code or a free library that does a specific function, no matter how arcane or niche I might find that function to be - the code is out there and it is free.
Now, do you realize how marvelously productive this can make a single programmer? No license fees to pay, and little code to write - just script together other's components to create a new and unique piece of software. In the past this would have taken 1000's of man hours of programming, or thousands of dollars in licensing fees. Now it can take me a weekend.
How long can Microsoft compete? Not long. Sure, Microsoft will lose money, but the market as a whole will remain robust, I just think that the money will be more evenly distribute among smaller companies and freelancers whose job it will be to integrate and repack the free software for those that don't want to muck with the details.
-josh
Yeah, but if software expands to use the CPU cycles and fill the memory, what have you gained? The MS bloat cycle is what is driving the craze for faster computers. (Well ... ok, games get a share of the credit.)
Caution: Now approaching the (technological) singularity.
I think we've pushed this "anyone can grow up to be president" thing too far.
If people now buy one $50 Redhat installer instead of 10,000 Microsoft licenses, there is that much less money into the economy. Companies such as Microsoft will find that they will do less well, and the knockon effect will be on the economy
This ignores the fact that MS did not create the money it would take to buy these 10,000 licenses. It was generated through some other field of endeavor (probably ultimately tracable to some sort of extractive practive like agriculture, mining, etc.). This money is already in the economy!. If it isn't spent on Microsoft, it will be spent on something else. Since free software specifically promotes reuse of code (its whole purpose), then the process of creating software is more efficient. Thus this funding, which is already in the ecomony, can be put towards someting more useful, rather than being used on the inherently inefficient process of proprietary software.
Free software has every little to do with communism. It has everything to do with increasing efficiency, making capitalism work better.
signed,
a hardcore capitalist.
Main difference is that software leasing would be leasing directly from the maker. Basically instead of buying a software package you buy the right to use it for a year, then buy another when the year's up. If you don't pay, you lose the software. If you do pay, you presumably get the most recent version, and usually updated versions at various times during the year.
Rob, I think software leasing will, if it catches on at all, last only a short time. There's one fundamental difference between leasing a car and leasing software: with a car you know what you're getting and what you'll get when the lease runs out. The car won't change on you for the life of the lease, and when the lease runs out you'll get to pick which car you want to lease again and won't be in the position of having the car company decide they'd rather you used station wagons instead of limos.
Compare that to leasing software. Take a look at the havoc that comes when you upgrade critical parts of an OS. Linux is less obnoxious when it comes to kernel and libc upgrades than Windows is when you jump versions, but it's still a headache and you don't do it to production servers quickly if you value your business's stability. Yet most software leases include provisions for automatic, unannounced updates of exactly that sort. RedHat's better about that in that you can avoid the update if you want, but I doubt Microsoft's leasing plan will let you continue to run 98 or NT4, no matter how well they work for you.
Software leasing may eventually work, but before it does it's going to have to not be designed as a revenue generator for the software companies and not have automatic upgrades and such added in to the basic concept.
How is Microsoft resting? 80s technology? Where the hell have you been for the last 20 years?
Excuse me, Mr. Clueless. Windows 95/98 are nothing more that and updated DOS that boots directly to a graphical console. They took EARLY 80's technology and painted a pretty picture in front of it. I guess it is innovative...if you consider animations of flying paper that lock you out of using your computer when deleting files innovative.
Last time I checked, Microsoft has been innovating in many, many areas (notably Outlook and COM+). Let us not forget that they were first to bring professional quality desktop publishing and ease of use to the PC either.
Is Outlook part of the OS now? And I thought COM+ was and extension of OLE, which is nothing more than runtime linking, which was developed in mid 80's? And tell me again how developing a DP program advances the state of the art in operating systems?
I may be living in a dream world as you say, but at least people don't walk around with their heads up their asses there.
Aah, change is good. -- Rafiki
Yeah, but it ain't easy. -- Simba
It removes the greed/growth that fuels our economy, our sandwich shops and our luxury goods, and replaces that with a communistic ideal which leaves no potential for any advancement.
You're not an engineer, are you?
In just about every system you design, the problem is not producing force or power. The problem is always how to efficiently control the energy of the system to do useful work. You can throw a 5,000Hp engine into a Honda Civic, but without a extremely well engineered drive train, all you will ever do is replace tires and CV joints as the engine rips both to shreds.
And so it is with capitalism. Unmitigated capitalism doesn't provide for the best society. It allows for certain parts of the system to destroy other parts. If one part of the system is broke, the whole thing is broke. Open source can be a mitigating/controlling factor, ensuring that commercial software houses continue to advance the state of the art. Why should M$ be able to rest on their collective laurels, reselling the same tired '80s technology? If a group of hobbyist can produce an OS as good as M$' flagship product in their spare time, why should I pay M$ anything? Linux has pushed them to feverishly develope better alternatives.
The greed/growth that fuels our economy has not been destroyed by open source. I has only been controlled.
Anyway, lost revenue for M$ means more revenue for my company, and eventually me (I hope). How does that damage society? I buy coffee, too!!
Aah, change is good. -- Rafiki
Yeah, but it ain't easy. -- Simba
While obviously some of the reasons that people moved away from that sort of enviroment are no longer true, there are many reasons that remain stoppers to businesses wanting to do that. (There are also reasons why business should have stayed on the central server pardigm, but no option has all pro, or all con).
Dude... You are smoking crack:
Here is the msdn download center and here is the code example center. Just about every microsoft binary on the system is usable by a third party in COM without having to hack the source. All of MSDN exists for developers. What do you have to pay for? A gui, the convience of having MS send you updates to the sdk's on cd, and in the unversal subscription case the right and access to play with any ms development related products you don't already own. Also to get that remaining stuff free/cheap for students, Msdn is doing this
I've seen this type of argument before on /. It's a weird one - and very, very wrong.
You argue that increased efficiency is BAD for the economy; how will poor Microsoft keep their inflated margins up?! This argument was first memorably made by the Luddites. See, the mechanical looms put weavers out of work, bad for the economy, see? Of course, it's almost too stupid to point out that all that money NOT going into Microsoft goes into the pockets of the owners of businesses that use Microsoft products, and can result in lower prices for *their* customers, and more money all around (that's good for the economy). Just like it was a waste of time explaining to Luddites that while a few people would be out of a job, clothing would become cheap enough for most poor people to afford, even if a few of them lost jobs.
But I guess you're not really into capitalism at all, just Microsoft's bottom line. Your invocation of communism is bizaare once the fallacy of your economic argument is made clear. However, it seems to be common - common enough that I disregarded the possibility that you are trolling. It's like thinking that after eight coin tosses get heads, the ninth is more likely to be tails; it should really be taught in first year econ classes, if it isn't already.
Boss of nothin. Big deal.
Son, go get daddy's hard plastic eyes.
Expanding a vast wasteland since 1996.
Actually, as a professional programmer/software engineer working for a small business I think /. could use a little more of these type of things, and less of JonKatz. Damned surprising to see it right after the first cup of coffee, though.
Best Slashdot Co
>Because in 10 years most businesses will be running dumb terminals and applications will be actually running inside the software giants houses,
I really can't see this. There are many reasons why it is good to have your applications on your own server. Security, simpification of customiztion and introducing more points of failure are important issues. Look at how many problems websites have when their servers go down or when they make a move.
>whether something is open source or not is largely irrelevent.
I have to agree with the end of this point, except that costs do make a huge difference for businesses.
The surprise isn't how often we make bad choices; the surprise is how seldom they defeat us.
I don't really mind your comment, I just think that the moderation on it is really bad.
>Now recently as these companies have started to do less well, beset by open source, antitrust and so on, the economy has done badly.
One, if open source is really a major cause then you should see RedHat stock pretty high, its not. Two, alot of tech stocks were overvalued. I don't think that Cisco has a direct Open Source competior, yet its market cap has crashed as Microsofts has.
>If people now buy one $50 Redhat installer instead of 10,000 Microsoft licenses, there is that much less money into the economy.
I don't get this part and don't think the moderators understand what this implies. Say that MS gets $1 million less in sales, that money doesn't disappear from the econmoy, it still exists in the hands of other business, who will use it for other expenses. It still goes into the economy. One can even make a good case that the $1 million gets distubuted more since its goes to say 100 different companies rather than just one. This would be a good thing.
>Companies such as Microsoft will find that they will do less well,
Fine, but I don't support welfare for one single company. That would be like communism or something.
>It removes the greed/growth that fuels our economy,
But isn't the corporation RedHat based on an Open Source product?
The surprise isn't how often we make bad choices; the surprise is how seldom they defeat us.
My point was just that there is a sizeable impetus to develop these faster machines, not just for gamers and speed freaks. There is a point to these faster computers, someone is getting practical use out of them.
And businesses do too in ways they may not be aware of. For example, spell checking and grammar checking is now done on the fly in Word, it used to be a specific tool you had to activate, remember that? Because of x00 Mhz machines, they can slip something like that in and you don't even notice. Just an example, there's more.
I am sick and tired of the oft repeated adage that the only people who care about the new CPU speeds are speed freaks and game players. There are a huge amount of applications for which CPU speed is critical outside of the game market. The entire field of academics revels in CPU speed for analyzing data, as well as any kind of industrial or governmental research arena.
We're here, we buy fast computers, and we put them to good use. It's not just about games.
I don't think people working/coding for free are wrong, I think the economy is wrong.
"Death is a motherfucker. Death is the end of this known existence."
The only companies that can make money online are companies that can also make money offline.
I have to disagree, in my experience it is the companies that offer products to a niche market that really take it to the bank. The only reason most people buy things online is because they can't get them locally or easily. The companies that offer products or services that can be aquired locally will end up suffering because they cannot compete with the local marketplace. Enter the niche market, want a Transformers T-shirt? How about the latest Martian Successor Nadesico resin kit? I can't find stuff like this around town, where do I go? The 'net of course!
I guess what I'm trying to say is that there are two effective business models for online sales.
-Have an established company already, therefore loss will be minimal and you can offer better deals/service
-Be a niche supplier and don't get grandiose in design, keep it small and effeiciant and you will make money. Bloat and fear the reaper!
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crazy dynamite monkey
I have the perfect solution for this! Send all that money which isn't going to Microsoft directly to me. I promise to put 100% of it into the economy. I won't save a single dime. Even Bill Gates can't claim that. I won't have any wasteful foundation either. Remember 100% straight back to the economy. I know it will be difficult, but I am sure I can handle it.
Yes, you can now buy a GHz uP for less than you paid for a 500 MHz one a few years ago, and RAM is cheaper, and so on.
That really underemphasizes the downturns we've seen in price in the last few years.
You can now buy a GHz for less than you paid for a 500 MHz last year.
I just installed 256 MB of RAM for $50, a quarter of what it cost a year ago.
We've seen an extraordinary year for prices of computer components, and as an avid reloader of PriceWatch, I don't see any slowing in the trend. I think this year of capitalism-at-its-best deserves more than a gloss-over. It's been a great year for the starving college student/computer enthusiast!
El Karma: excelente(principalmente la suma de moderación hecha a los comentarios de los usuarios)
Desktop publishing and an easy interface was the killer application for the Macintosh platform, who had both first.
That's what you're really saying. ;)
BlackNova Traders
and cases start to get a yellow tinge even if they are cleaned regularly
oh crap, my computer is dusty, better replace it straight away!!
I disagree with some of the claims made about replacing computers. We've got a woman here running a 486-66 and we just ignore her, that way we don't have to buy her a new PC.
Our motto is, If it still works, dont fix it. or somesuch...
-fohat
Is there heaven? Is there Hell? Is that a Tuna Melt I smell?-Primus
Does anyone find it ironic that the same "landgrab" in 1998-1998 Roblimo is quick to retort as being viable in the future, was the one that brought Slashdot into being?
- I don't care if they globalize against free speech. All my best free thoughts are done in my head.
I hope that by 2003, all the .com bombs, M$ court rulings, and continuing network security debacles will refresh our short memories on why we should just get out of this ratrace and get a real job growing food, healing the sick and treading lightly on the planet. *sigh* I'm sick of it all...
.sig! Come on down, the world needs real leaders and your invited to join a movement to a sustainable, healthy and content future vs. the desolation and bleakness that were forced to endure now!
Great idea - I couldnt agree more. Tough in a world run by Corporate SlaveMasters who have replaced our governments with Lobby groups and have morphed communities into markets, citizens into consumers. There has been a destruction of relevant/real priorities. We need to take control of the powerful corporate agenda and realign it with a Community Agenda with the goals being better lives for everyone - not more ratrace/enslavment to Corporatists and Plutocrats. We need to take control of the destiny of this planet, selfish, greedy, myopic, paranoid and untrustworthy Corporate Boards ARE NOT concerned with anything but their own pocket books and stock prices. Dont be confused about how to make the world a 'better place' - it is not going to come from the Capitalists.
Read
I doubt this very much. Certainly 2000 was better than 1995, due to economic growth. This economic growth improved living standards, raised consumer happiness, improved employment, reduced unhappiness, etc. The reason for this growth was enterprise in the computer industry. Enterprise caused by companies hungry to make money.
The activities of companies such as Microsoft made billions of dollars for people - not just for their employees but for the economy. Now recently as these companies have started to do less well, beset by open source, antitrust and so on, the economy has done badly. The results of this have been layoffs, reduced consumer confidence (which means, eventually, that the guy who runs the bagel shop on the corner loses his job) and general economic decline.
The omens are that this will get worse. It seems that open source's time has come. It has been said that open source will provide 50% of software for the country. The result of this is less money into the economy. If people now buy one $50 Redhat installer instead of 10,000 Microsoft licenses, there is that much less money into the economy. Companies such as Microsoft will find that they will do less well, and the knockon effect will be on the economy - not just that of the US but economies around the world. The potential is for global recession without the growth caused by the IT industry.
This is regrettable; people assume that open source simply means 'free software'. This is incorrect. Free software is no different from Communism - a country where you have, say, 'free cars' - cars owned by everyone - open source cars if you will, do not do better. They do worse. Growth in society depends on the greed of man - the greed of brokers propelling the stockmarket higher. Unfortunately communism does not cater to this most important of human instincts. This is why, just as communist societies damage the people (communist countries, without exception, are very poor countries), so too communist software damages society.
It removes the greed/growth that fuels our economy, our sandwich shops and our luxury goods, and replaces that with a communistic ideal which leaves no potential for any advancement.
I'm glad to see that there is some thought and reflection going on, and that you are capable of writing an opinion peice that would blow away any of the other comentary sites (ZDNet should repost it as a guest column, and Salon could Salonify it easily).
As for your opinions, I agree, the present is somewhat depressing but the future is bright for business. You've managed to completely change my opinion on leasing software. Now, if only I could get the IRS to believe my Microsoft purchases were unreimbursed business expenses...
Microsoft has about a 50% sucess rate selling services/tech to the home community. MSN isn't unseating AOL anytime soon, MSIE is the top browser, Media Player is having a hard time delivering DIVX:) codecs to the masses, etc., etc. I doubt subscriptions will catch on at home, and may drive home users to try Linux, but Microsoft knows this, and will probably sell a tradition package at home (bundled invisibly with the cost of the machine), or push for businesses to purchase liscenses that can be used at home (a great idea for any company that wants computer literate employees, able to do work at home).
What would still be nice is some kind of system that lets the little guys survive. Something Awful and other efront pages are now without a home, and even StileProject is having ISP problems. It seems easier for content providers to go the traditional media route - if a new comic wants to make it in the papers, it can survive the growing years based on money generated by Peanuts and Dilbert. In the online world, comic creators can start small, then run out of money just as the reach the popular point. Even Penny Arcade is asking for donations.
I'd like to see someone come up with a subscription-type system that works. I'm thinking of a newspaper-type model, where my subscription gets me my news, comics, and some items of tech interest, while part of my money supports items I don't care about, like sports and Lifestyles. I don't mind paying $X a month, an even getting some adds, if it will guarentee Rich Kyanka gets a hot meal every month.
Well, I'm rambling into off-topic land, so back to work...
Another interesting tidbit, although second-hand: I heard a prominent venture capital lawyer speak a couple of weeks ago, and he said that most vc firm contracts specify that if their funds are not spent within four years, they must be retruned to the investors. I can't imagine that happening, so all those $1 billion+ funds raised in late 1999 and early 2000 will have to be spent in the next three years, and it takes a little time to spend $1 billion. So my next prediction is for the return of venture capital in 2002, no matter what the economic mood is.
Milo
"I figure you're here 'cause you need some whacko who's willing to stick his finger in the fan. So who are we helping?
This was an interesting and insightful column, but I have a question.
"Computers bought in 1997 will reach the end of their tax-depreciation life next year. Computers bought in 1999 will be three years old in 2002. Even if no great new technologies hit us in the next few months, we are going to see a lot of old computers replaced before long, probably starting in the fourth quarter of 2001, in a cycle that is going to continue for at least another three years after that."
The implication is that there will be a boost to the tech sector because of distinct increase in computer purchases. But wasn't this year for replacing year-1996 purchases, and last year was the replacement year for year-1995 purchases, etc.?
It's not clear to me that next year's hardware purchases will be significantly greater than the past few years. And given the overall decrease in hardware margins, next year could be no better or even worse than this year.
Any clueful people to clarify?
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D. Fischer
ShoutingMan.com
Computers don't really wear out, my master browser at home is a 486/33 running FreeBSD, it must be 7 year old at least. But I'm getting ready to rotate it out and replace it was a P90.
What drives hardware sales is new applications that make older computers nearly useless. I think the latest one coming down the pike is DIVX:).
My main computer for a few years was my 486 laptop. When I started to write books, it was too slow, so I upgraded to a Pentium 75.
I had a Pentium 75 for my main computer for a year, but when I started to get into MP3's, it was inadequate. I upgraded to a Celeron 300.
Now, I'm getting into DIVX:), so I bought a barely adequate Celeron 566 Dell NETPC as a set top box. I hardly know anyone else who can play DIVX:), which is a shame, since I'd like to trade them RL.
The IRS is lame about that depreciation schedule,. I think 3 years is a lot more reasonable.
Trolls throughout history:
Trolls throughout history:
Jonathan Swift
The .com boom/bust cycle was yet another tech cycle, similar to rail, telegraph, automobiles, radio, and TV initial cycles. Very, very similar. In fact, if you look at the Stock Market Crash and the Great Depression, you'll see a familiar tech stock market speculation cycle as part of it.
That said, your statement "something we won't see in my lifetime" is probably wrong. Unless you're in your 80s.
My guess is something similar will occur sometime between now and 2022, given the current rate of technological change. It might even be fusion power or something else, but we will have another popular stock market delusion.
There are two ways to avoid losing your shirt in these speculative cycles:
1. Buy only sound companies with good prospects for profits, good cash positions, and reasonable P/E projections. Choose the leaders, not the me-toos. And if you ever find more than 5 per cent of your money is in a single stock, start selling out of it slowly - it's better to have 28 percent tax on a 50 percent gain (36 percent real return) over three months than to have an 80 percent loss. And never go on margin, unless you are selling something else that day.
2. Don't participate - be a contrarian. Buy up the out of favor "boring" stocks (or even bonds) as their price drops. Real value wins almost all the time.
--- Will in Seattle - What are you doing to fight the War?
At this point, the market is pretty much saturated. Those who would buy computers, have done so. Those company's who would have created electronic solutions, have also.
Thus, things are winding down a bit, from the frenzied pace.
However, as rob stated parts break and hardware is pretty poor nowadays (i dont expect this comp to last as long as my 386 which has been chugging merrily for over 10 years now) and software is pretty poor too. This is due mainly to the fast pace that things have been done in the past few years.
So the software industry will still be going strong, fixing the buggy software of the past few years, and the hardware will do the same.
The downside to this (if you really think of this as a downside) is that company's are getting alot more picky about who they hire. Simply saying "i know computers!" isn't enough anymore. If you dropped out of college to join the industry, you might want to think about dropping back in and finishing up that degree (i know several people doing this).
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Disagreed, the problem most people seem to overlook with politicians (and it can be seen with almost all poles nowadays) is their in the game for the money. Sure you can brush this off but you have to remember, a politician is going to say anything to get a vote, and as time has shown their promises pretty much suck.
Now when I say money, you have to realize things that people with money have done for politicians in the form of contributions, as well as other who do cool things like helping out with donations... Yea the dreaded B. Gates.
Do you think a politician is going to give up software frmo companies such as MS, Sun, because OpenSource can save some money? You'd have to be crazy, if anything with the gov's history they'll overspend 400%.
NOW... back to the markets... If you take enough time to look at the big movers on NASDAQ (CSCO, SUNW, MSFT, etc.) you'll see they're still slightly above their original opening prices even though they've dropped tremendously, what happened with the past 2 years, was everyone wanted to get so rich quick, VC's dumped money into shithole stocks, which ended up creating a tight ass VC market. No one wants to spend on unproven stuff.
It doesn't mean that by next year, VC's are going to say lets fund everyone again, they've seen what will happen, so for the heavy hitters on Wall Street, they'll shoot back up to a mid capped price, but there won't be a tremendous waste of VC cash going on never again.
Even if the fed (Greenspan) makes moves this week as opposed to May for the economy, NASDAQ, is _STILL_ going to be where its at for a while, a lot of companies lost some big time bucks, and their gonna be leery to invest in techs for a while (4-5 years) since many have thrown away just about everything as is. Many won't want to follow until techs are stable...
my two cents
crypto/steganography 101
360 degrees of Karma
... that when they say old hardware will wear out, that they are not implying that I should replace my TANDY!!
"...but we also had a major pre-Y2K hardware and software buying frenzy."
Is this a joke? I worked at a "buyer" company in 1998 and half of 1999 and a "producer" company since then. All hardware and especially software purchases were pretty much on hold. Don't add to a potentially enormous problem, seemed to be the philosophy.
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