Why history will repeat itself
Bowstreet co-founder Frank Moss writes that technology-industry slumps, however painful, all have a silver lining--and the current one's no different.
We're still seeing layoffs, sour earnings reports and nervous investors. The pain is especially acute in the high-tech sector, the very place we've always looked for new efficiencies to drive profits.
What are the flaccid tech markets telling us? Have we wrung every drop of efficiency from technology? Our faith is shaken. Is that all there is?
Hardly.
As history and the time-honored metaphor show, it's always darkest before the dawn. There's much more to squeeze from technology. Technology-industry slumps, however painful, have a silver lining. Every slowdown gives companies pause, prompts them to seek a new way and launches a major revolution in computing. These revolutions improve customers' lives, bolster corporate health and revive business in the process. Computing revolutions aren't always as in-your-face as the Internet or the PC. But they're always seismic, like the development of the combustion engine to propel the carriage.
Things looked about as bleak as they do now in three past recessions: 1969-70, 1980-81 and 1990-91. Yet a computing revolution was born each time.
The recession of 1969-70, for example, prompted companies to unshackle themselves from the centralized, monolithic mainframe and gave rise to distributed computing at the departmental level. By 1970, nearly 70 companies were building minicomputers, and by 1971 DEC was selling approximately 100 systems per month. Other big players were Data General and Prime.
The recession of 1980-81 gave rise to open systems and the proliferation of the Unix operating system, which freed the world from the grip of proprietary server operating systems. The big, emerging players were Sun Microsystems and systems and application companies like Apollo Computer and Computervision. Incidentally, 1981 was also the year IBM introduced the PC.
The recession of 1990-91 unleashed client/server computing, which empowered business people by bringing enterprise computing power to the desktop. Big players were PowerSoft, Sybase, Oracle, SAP and Tivoli Systems.
In each recession, technology innovators broke a previous computing paradigm's "headlock" and unleashed new productivity and profit. Each stage decentralized computing power and placed more of it in the hands of more people closer to the work that needed to be done.
Believe me, this process isn't over. We are still in a computing headlock, and we still have computing power to distribute. Get ready for the next tidal wave. I say it's going to be Web services. And it's going to be big, at least as big as the others.
Companies will digitize their core competencies and publish them on the Web as plug-and-play software chunks, or Web services, for others to share. Web services will slash development costs, accelerate time to market and rapidly expand market reach. Information technology professionals, though invaluable, will no longer dictate the pace of business.
What's more, Web services will shift the power to create, change and deploy software to the hands of businesspeople. Also, it will let businesspeople mass-customize content and services for their customers in minutes. Web services will make it easy for companies to quickly and efficiently move their newly automated business processes to the Internet, then share them with key customers and partners. And Web services will make business-to-business integration--the Internet's Holy Grail--a point-and-click proposition.
Instead of waiting for software developers to create or modify applications, companies will snap up other companies' Web services for their own use. Software "factories" will create, mix, match and deploy Web services to continuously produce myriad unique applications, just as old-school factories mass-customize automobiles.
As with any revival, the table is set. Microsoft, in its .Net initiative, and every other technology giant--including Sun, Hewlett-Packard, IBM, Oracle, and BEA Systems--support Web services. Microsoft is "betting the company" on Web services, according to second in command Steve Ballmer. For example, the company's Passport identity Web service already has 165 million users. Analyst company Gartner calls Web services "likely the hottest trend of 2001 and 2002" and "an underestimated technology." Cisco Systems, which has shown signs it might lead the tech rebound, is reinvesting in Web services.
How can we be so optimistic that Web services will lead us out of the recession? We can because of history.
Just as when client/server hit, analysts are defining new Web-service technology categories and terms. CIOs are working to get their arms around the technologies. Venture capitalists are continuing to invest in start-ups. Customers are pressuring technology vendors to beef up Web services support. Global 2000 companies are pulling out their wallets and retooling around Web services. They will do so in force next year. Even the exploding revolution in genomics and biomedicine is taking up the cause. The newly formed International Informatics Infrastructure (I3C) consortium is using Web services to develop standards for life-sciences research and drug development.
These companies will create new jobs for Web services developers. They will spend money on Web services tools, hardware, applications and consulting. All of this will spur new employment, new companies and new growth. Cottage industries will develop as entrepreneurs create new Web services for other companies to use.
Technology led us into this recession, and I predict it will lead us out of it in 2002. Web services will be the vanguard. Count on Web services to transform computing, and the economy. Count on history to repeat itself. The dawn will arrive and surprise us with its brilliance--and make us forget the dark that preceded it.