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2006 outlook: Open source, offshoring, Web 2.0

Paul Gillin
There's nothing like a good paradigm shift to get you out of bed in the morning, don't you think?

The forces are massing for some big changes in IT industry dynamics. We need this. The tech landscape has been pretty dry these last few years. It won't be a year of epic events, but change that is already under way will accelerate.

Here are my annual 10 predictions of what to look for in the next year:

Software trends -- A convergence of trends epitomized by Google and the amazing speed at which it delivers new features will cause vendors and enterprises to change the way they build software. The new approach will be open-beta development with community participation and frequent new releases. Essentially, we'll use software while it's being developed.

This trend plus code reusability will change commercial software development. Vendors that don't leverage these tactics will become irrelevant. Users will also demand that commercial software take on a more service-oriented approach so they can mix and match. As a result, the industry will begin to shed its not-invented-here bias and truly reform its approach to software. This will cause shifts in the cost structure of the business and eventually to changes in the power structure. But that's a good thing, right?

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The move to open source -- Large amounts of once-proprietary software is now going open source. The trend is epitomized by Sun's commitment to give away its entire enterprise software library -- except Java -- as open source. But reserve your applause for this apparent generosity. A lot of the stuff being thrown into the GNU Public License domain wasn't very popular anyway and an open source strategy is one way for vendors to hand off expensive support costs to the ''community." Still, there's no excuse for you not to check sourceforge.net before plunking down money for any commercial application.

Web 2.0 -- This is already a buzzword but the concept is important. Web 2.0 embodies ideas like software as a service and open development, and wraps it in the bigger notion that the value of the Internet is in the ''long tail," or the thousands of special-interest blogs and Web sites. Publisher Tim O'Reilly wrote an enlightening essay on the topic that if Netscape embodied Web 1.0 then Google embodies Web 2.0. Become familiar with the concept because you're going to hear a lot more about it.

Software as a service (SaaS) -- More importantly than getting its own acronym, SAAS has got traction in the market, particularly among small and midsized businesses. Salesforce.com laid the groundwork but now service providers are sprouting up everywhere. A recent report by Cutter Consortium found users are increasingly turning to service providers for financial applications, human resource management and the ubiquitous ''other." The reason: better ROI. Here's another big challenge to conventional packaged software.

Data center remake -- A major overhaul of corporate data centers that began a couple of years ago will accelerate driven by two technology innovations: virtualization and multi-core processors. The latter gives servers a turbo boost by tying together two processors on the same chip, yielding about a 50% performance boost. Virtualization, popularized by EMC's VMware subsidiary, is solid enough to go mainstream. Expect Microsoft's entry into this market, along with attractive changes to Windows licensing, will jump-start interest. And keep an eye on the Xen open source option. There's lots of opportunity for consolidation and cost savings here.

Stolen identities -- It's remarkable that, with all the highly publicized cases of credit card and customer record loss early this year, there hasn't been a major identity theft. That's gotta change. Professional criminals are plying their trade online, phishing is surging and online commerce is mainstream. It's a recipe for disaster. I don't know if a blowup will occur in 2006, but some sort of cataclysm will raise public awareness soon.

Offshoring, round two -- This past year brought the predictable backlash against offshore outsourcing, with tales of soured relationships and early contract terminations. But expectations were too high to begin with. The reality is that offshore outsourcing is a long-term growth business, and Indian firms, in particular, are offering increasingly sophisticated services. Most people who went in with realistic expectations of 20% to 25% savings haven't been disappointed. The next round of growth will be more sustainable.

Vista beats shipping deadline -- Reports are already swirling that Microsoft is going to miss its promised summer ship date for Windows Vista, the successor to Windows XP. Don't count on it. Microsoft has too much at stake. Messrs. Gates and Ballmer know that Mozilla Firefox is the open source camel's nose in the Windows tent, and it had better give retailers and PC makers a merry 2006 holiday shopping season to avoid further pressure from Linux. Yes, Vista will be buggy, but it will ship in time for the holidays. Mark my words.

Year of the blogger -- One of my worst predictions ever was from 2003: ''Blogging's wave has already crested now that millions of online diarists are realizing that not that many people actually read this stuff." I missed the point, which is that small but passionate audiences are the core of ''long tail." The technology world is already being reshaped by blogging. Sites like Technorati and Tech.Memeorandum are the kingmakers who choose who gets heard. Podcasting is an explosive new phenomenon that takes blogging to another level. The mainstream media is already taking cues from the blogosphere. Get to know it because it counts.

Convergence gets real -- It's been a buzzword for years, but convergence will take shape in 2006. Key drivers: the success of VoIP services like Skype and Vonage, along with consolidation in the telecom industry. Converged devices will emerge that look like a cross between phones, TVs, GPS receivers and music players. They'll work over cellular networks outside the office and Wi-Fi networks inside. In Japan, cell phones are taking on credit and affinity card features, realizing the promise of smart cards. In the office, the ubiquity of high-speed Internet connections will drive converged services that improve group productivity. Convergence may finally deliver what groupware was supposed to achieve 20 years ago.

Paul Gillin is a technology writer and consultant and former editor-in-chief of TechTarget. His Web site is www.gillin.com.


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