by November 28, 2000 0 comments

The Year 2000 belonged to the lawyers and to the stock
market. The first fought it out in the courts over trail breaking cases, like
the Microsoft antitrust case and the Napster copyright infringement case, which
may redefine the way IT business is done, while the latter took technology
companies on a roller coaster ride, taking them first up and then dropping them
mercilessly at an even faster pace.

The dotcoms, which for some strange reason are considered to
be part of and even better than the IT fraternity, started the year on a high
note, but by now, when the year is drawing to a close, many of them have already
folded up, with most others waging a desperate battle for survival. The dotcom
philosophy of seemingly unending investments without any immediate plans for
profits was touted as the mantra of a new economy for some time, before the
market gave way to the need to be profitable. The first of the big names, and
perhaps the most famous case to go belly up, was Boo.com, a Web-based up-market
fashion retailer. When the story became known, it came to light that Boo had
spent millions of dollars in advertising and other business expenses with hardly
any sales to show.

The path that the dotcoms took, of depending on venture
funding and not internal accruals for every business expense, including working
capital, is what ultimately led to the tight situation that the entire sector is
in. With no cash flows of their own, they were dependant on round after round of
venture funding for their very existence. Initially, venture capitalists were
too willing to pump in the money without bothering too much about the
sustainability of the business. But after a few Web businesses went belly up,
they began asking questions, and to cut a long story short, funding dried up.
Simultaneously, the stock market also went on a downswing, possibly for the same
reasons, and the squeeze for those who depended on the value of their stock and
nothing else became really hard. Nobody is yet questioning the utility of the
Web as a way to reach customers. But there are serious questions being raised on
the very survival of a Web-only business.

So,
in all this frenzy who made money? Two types of businesses made money during the
height of the dotcom frenzy. And one of these two was a business that the Web
was expected to kill off–print media, including newspapers and magazines. The
dotcoms had to resort to large doses of print advertising to drive up their
valuations with the venture capitalists. The second were those who provided
services to the dotcoms–those who developed the Websites, or provided the
software and hardware for them. Even the stock market did, to some extent,
reflect this reality.

Another group of companies that had a rough time this year
were the Linux companies. Last year, many companies providing products and
services around Linux had gone to the stock markets and raised money. This year
saw their stock prices tumbling down, as most couldn’t produce a positive
bottom line. About the only exception was Red Hat, which was able to produce a
better financial performance than both.

In the following section, we’ll look at some of the
familiar international names and see what the year ahead could have in store for
them. This is not an exhaustive list, but just a top-of-the-mind selection.

Microsoft

The high points for Microsoft this year were the ruling in
the antitrust case, the launch of the Pocket PC platform and the launch of their
new .Net strategy. While the first one, at least in the initial round went
against the company, it has been able to get significant success with the second
one. On the .Net front, it’s still early days and one needs to wait and see
what evolves.

In the coming year, we expect to hear more on the .Net front,
with the company realigning almost all their products around the .Net
initiative. The fact that quite a lot of advertising money is being spent on
this front will ensure that we get to hear enough about what’s happening and
more.

The X-box–Microsoft’s gaming console–the device with
which the company hopes to take on the likes of Sony and Sega is due for launch.
Gaming is a market that they have been eyeing seriously for some time now,
having launched a range of software titles and peripheral devices. So we can
expect a lot of noise on that front from Microsoft next year, if the X-box
arrives on schedule.

The long promised new version of Windows for the desktop,
based on NT (now 2000) code base is also due and could bring more robustness to
the desktop. On the other side, Paul Allen, cofounder along with Bill Gates is
due to step down from the board of the company next year. Allen had not had an
operational role in the company for a long time now. So, the impact of his
stepping down from the board is likely to be minimal.

Nokia

While cellphone usage grew by leaps and bounds this year, it
has not been a kind year for cellphone manufacturers. Most of them struggled to
stay in the black. Nokia was one notable exception, consolidating its position
in a crowded market.

New models came with monotonous regularity, and the focus
with recent ones was on building more functionality, particularly PDA-like
functionality, into cellphones.

The next year should see 3G-based devices from all cellphone
manufacturers, and going by current trends, it’s only natural to expect Nokia
to have a significant say in how things evolve.

Sun

The last big revolution from Sun was Java. Recently, they
bought over Star division, the company that makes StarOffice, the free
alternative to Microsoft Word. Simultaneously, they also announced plans to have
a portal called StarPortal, an ASP service around the productivity suite. But
nothing has been heard of the effort since.

In short, the company and the world is waiting for the next
big revolution from its stables since Java.

Samsung

Samsung has proved to be a really nimble player in the
market, not only in embracing newer technology areas, but also in carving out
significant marketshare. Samsung is today known more for its products that its
technology.

The coming years should see Samsung transform from being just
a product leader to becoming technology leader. One particularly hot area seems
to be in mobile communication devices. Their recent deal with Microsoft for
developing such technology is a good pointer in this direction.

Apple

Apple had ridden to a new high on the success of the iMac.
This year, however, Apple was not able to repeat the success of the iMac with
the G4 Cube. Dual-processor Macs made their debut, but they have to wait for OS
X to be able to use the second processor! After a long wait, we finally had the
beta release of OS X (read as OS ten), but it’s yet not clear whether the
final release will have the same impact and fan following as some of the more
popular products from Apple.

IBM

IBM is one of the few IT companies to have a finger in almost
every pie. Major initiatives for IBM this year were on the marketing rather than
on the technology front. These include a major Linux push and a repositioning,
or rather a renaming, of their complete server range.

Corel

Corel was originally known for its graphics software. Then it
bought over Perfect Office, and a slew of other products, but could not achieve
much with them. Then it started off a division to produce hardware for Linux,
and even developed their own distribution. Then they gave up plans for both, and
after much turmoil have signed up an agreement with Microsoft to develop
software around their .Net initiative. One interesting sidelight of this is the
option for Corel to develop the .Net stuff for Linux. Whether it will actually
happen, the coming year will tell us.

SCO

Technically, the company called SCO doesn’t exist anymore.
It has renamed itself as Tarantella after selling off its operating systems and
services divisions to Caldera, the Linux major. Tarantella is the name of the
thin-client software that SCO had developed. Just before the sale of the
operating systems they had announced major plans for Linux, and had even
developed the Linux Kernel Personality, a software that allowed UnixWare, their
Unix operating system to run applications meant for Linux, without having to
recompile them.

Krishna Kumar

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