2010: Cloud Collapse, Platform Wars and Microsoft Loses All!

(this story was cross-posted at PCMag.com)

“We are at the cusp of huge changes around us in everything we look at”, said analyst and futurist Mark Anderson at his annual predictions dinner Thursday night in New York. “There’s never been a more exciting year than 2010”, the author of the influential Strategic News Service exclaimed.

Pointing to an amazing set of changes in platforms next year, Anderson’s predictions lay out a framework for a radical upheaval in the status quo. And Anderson’s worth listening to – unlike many navel gazers, he pointedly rates his predictions at the end of each year, and currently claims a 97% accuracy rate. Some of his notable “calls” over the past five years include predicting the meteoric rise of netbooks, the HDTV price collapse, the oil price increase and decrease, and bottom of the 2008/2009 stock market crash.

His first two predictions covered both the upheaval in computing platforms, and in operating systems:

“2010 will be The year of Platform Wars: netbooks, cell phones, pads, Cloud standards. Clouds will tend to support the consumer world (Picnik, Amazon), enterprises will continue to build out their own data centers, and Netbook sector growth rates continue to post very large numbers.”

2010 will be The year of Operating System Wars: Windows 7 flavors, MacOS, Linux flavors, Symbian, Android, Chrome OS, Nokia Maemo 5. The winners, in order in unit sales: W7, MacOS, Android. W7, ironically, by failure of imagination and by its PC-centric platform, actively clears space for others to take over the OS via mobile platforms.

“A new platform happens once every 10 years”, Anderson stated, but in 2010, “we have three to four happening all at once.” There will be a huge market-share land-grab going on next year, and that is a great thing for anyone looking to start a company. “It’s going to be full on poker high-stakes Las Vegas fun!”

Although Anderson called the phone “the most interesting computer platform” and said it was responsible for “driving innovation: software, business models (and) distribution”, he said Netbooks are almost as important. He specifically called out the 9”x7” form factor as the sweet spot, predicting “More resolution and power will be crammed into this form factor.” Those that win will deliver the biggest bang, and the most value for the dollar.

He was also very bullish about Apple’s upcoming tablet, predicting a boatload of sales. Anderson attributed Jobs’ “deep hatred for John Sculley” as the reason why Apple waited so long to enter the market. It’s taken Jobs three years to get over his “We Will Never” Newton stance that he took when regaining the CEO post. “You have to feel sorry for Michael Dell”, Anderson lamented, as he called Apple’s tablet a “game changer” and a type of netbook that will “eat share the way the iPod eats share.”

When asked about the Kindle and other eBook readers, he dismissed them as a single-function, and a mostly brain-dead flavor of netbook.

Moving on to the cloud, Anderson sees rocky times ahead, particularly in the corporate world..

“There will be a Cloud Catastrophe in 2010 that limits Cloud growth by raising security issues and restricting enterprise trust. CIOs will see the cloud as the doorstep for industrial espionage.”

Anderson continues to be bullish on personal and consumer use of the cloud, but sees a major pullback for enterprise adoption next year. He reasoned that “CIOs are mistrustful of the cloud now”, and that it is “about time for something to happen”. The catastrophe will take one of two forms – either a huge security breach, or a lengthy outage. This will empower CIOs to build out their own hardened data centers, “instead of shipping the company jewels to Amazon”.

Anderson followed that up by predicting a huge split between corporate and personal computing. Although personal phones and notebooks have been infiltrating corporate America, that will stop next year, he predicts:

“A huge chasm opens in computing, between Consumer and Enterprise (government/business.), with Apple, Google and most Asian hardware companies in Consumer, and Dell, IBM, Cisco, and MS on the Enterprise side. HP will straddle both. Before 2010, talk was all about unifying consumer and enterprise. Now, talk will be about their split.”

This is particularly contra-indicated, he said, by our own intuitive experience. Last year the trend seemed to be towards software everywhere, happy happy joy joy. “Forget about it”, he warned. “It’s not a beautiful one size world” anymore. This dramatic market split is happening very quickly, but he also predicted tremendous opportunity for new companies. We will see “new ideas, new concepts, and new companies on the consumer side that (are) really going to take off!”

One of the first big casualties? Microsoft’s Chief Software Architect Ray Ozzie. Calling Ozzie a personal friend, Anderson said that he’s unhappy, and just doesn’t fit into Microsoft’s aggressive and argumentative corporate culture. He agreed with Gates that Ozzie is probably “the world’s best programmer”, but he’s not the right leader for Microsoft, at least not today. He wouldn’t elaborate, except to say that Ozzie is “spending a lot of time away from home these days.”

That’s not the only bad news for Microsoft next year, as Anderson sees even more fail on the horizon:

“Microsoft loses in its Consumer play: except for gaming, it is Game Over for MS in Consumer. This will make Consumer the place to be, where the most robust and exciting change artists will work.”

Sure, they have XBOX, he conceded, “but the failure of the windows mobile system to attract a larger share is the turning point for the company.” The straits are dire in Redmond, as he found it hard to be optimistic about an operating system company without a pure play on the phone.

Anderson specifically pointed to the collapse of the Pink team, the lackluster 6.5 version of Windows Mobile, and the horrific loss of market share to Android, especially when ”no one knows what Android is.”

Finally, he likened Microsoft without a mobile OS to the minicomputer makers along Route 128 in Boston in the 80s – Wang, Data General, Digital and others, who pooh-poohed the PC and called it a toy. It’s “Game Over, and Done Deal” for Microsoft in the consumer market.

Anderson also spent a good bit of time talking about the world economy in general, and China and Japan in specific.

He’s particularly down on China, noting that the country is far from being a market economy – calling their banks simply “tubes through which government feeds money to selective industries”, and warning that “the toothpaste is starting to come out of the tube.”

And that leads him to conclude that “something bad is going to happen”. Although he thinks the Chinese government is smart, and will react quickly, their deep stumble will hurt not just themselves, but their trading partners, and will have a huge impact on the world economy.

Part of the problem with China, he explained, was that by pegging the Yuan to the dollar, all kinds of devastating devaluation occurs around the world. And that will end up pitting not just Obama against China, but the rest of the world against China as well. It’s simply an unsustainable situation and “that pressure will be unable (for the world) to ignore.”

He also accused Japan of cooking the books, falsifying a decade-long recession while actually thriving at the expense of the US. Why? Because the US threatened trade retribution, and the Japanese got smart. Realizing that a 15% tariff across the board would kill their country, they’ve taken on a public poor, poor me stance, while Panasonic, Toyota and Canon built world-domination using technology mostly invented in the US.

Finally, he thinks that technology stocks will continue to recover next year, but the rest of the market will lag. He also thinks the price of oil will climb to $120 dollars in six months before the speculators start jumping back in and really driving the price skyward. And he thinks that the world will begin to look much more favorably on the Nordic countries, Canada and Australia, as “OK places where they don’t shoot anyone, mind their own business, and make good returns on investments.”

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