Forgot your password?
typodupeerror
The Almighty Buck

Why 2002 Will Be Better Than 2001 157

Posted by Roblimo
from the speaking-ex-cathedris-from-his-belly-button dept.
2001 does not look like a good year for computer and Internet businesses, but I expect 2002 to be decent, if not spectacular, for a number of reasons including IRS policies. I also predict that Microsoft's software leasing concept will be more acceptable to businesses than you might expect, as will Red Hat Network and other subscription-based software support schemes. But before we go on, let's accept the fact that 1998 and 1999 were unusually good, and that we're unlikely to see anything like those years again in our lifetimes. We not only had Internet companies popping up all over the place -- much faster than they should have, in my opinion -- but we also had a major pre-Y2K hardware and software buying frenzy.

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.

This discussion has been archived. No new comments can be posted.

Why 2002 Will Be Better for I.T. than 2001

Comments Filter:
  • by Anonymous Coward
    If people now buy one $50 Redhat installer instead of 10,000 Microsoft licenses, there is that much less money into the economy.

    I have to disagree here. Yes, less money is spent on software, and a much better value is delivered to customers. But to say that this results in less money into the economy is fallacious. It only means that much less money goes into the software industry. That money does not evaporate! It simply finds a home in another investment for the company or as profit to the share holders.

    In practical terms, getting more for less is the definition of a growning healthy economic environment. Getting less for more is the definition of inflation.

    I am not an economist...Thank Heaven!
  • by Anonymous Coward
    mind explaining to the rest of us what this means?
  • by Anonymous Coward
    I think 2002 will be better than 2001. People will get over loosing millions on the dot coms. Things will get back to a more realistic normal.

    I disagree with the implication that US Gov't meddling with Microsoft is ruining the economy. What happens to M$ can only have an insignificant effect. It's only one big fish in a huge ocean. Nobody ever talks about what Microsoft's monopoly has been costing us all along in terms of stifled innovation, anti cooperation, and higher prices. Think of how rich Bill Gates is. Then think of a different world in which Gates is only a millionaire and not a Multi Billionaire. Consider that all those other billions and millions could have been fueling innovative new companies with new ideas, and perhaps even better products.

    To imply that Open Source will ruin the economy by taking money out of it is ludicrous as well. If my company doesn't have to pay $1 million for software, it will have that $1 M to spend someplace else. Perhaps they can hire more staff to support free software. Perhaps the extra dough will go to shareholders, and they can spend it on shiny new cars.

    It is my observation that 2 things are slowing the US economy down.

    1) The Energy situation is slowing things down for various reasons like, higher prices, lower consumer confidence.
    2) The fallout from the dot bombs has lots of people pinching pennies now. If I was a millionaire on paper last year, and now I only have thousands on paper, you can bet I'm going to be saving a little more and spending a little less. All those former dot com employees are spending a little less too. And all those venture capitalists that blew their wad on some now dead company, now have no money to loan to legitimate ventures.

    I think that taking VC money is like selling your soul to the devil. And the dot com frenzy almost forced companies to do it. If all of my competitors are getting millions to bootstrap themselves, and buy advertising, how can I possibly succeed without doing the same? So we ended up with sectors of dot com economy built on poor business models, and fueled by nothing but GREED. With people placing bets, just because they think stock prices willgo up, with absolutely no concern for the long term viability of the business.

    I STRONGLY disagree that "not buying something" embraces the communistic ideal and leaves no potential for advancement! That's like saying that all companies must never create their own software, or reuse existing software, if a product is on the market that can be purchased.

    Who does Trevor Goodchild work for? Microsoft?

  • by euroderf (47) <a@b.c> on Monday April 09, 2001 @06:15AM (#305418) Journal
    I have worked in this industry for a long time, and have been in the Internet and Open Source trade since the very beginning. If there is one thing that irritates and annoys me, it is the endless puffing by non-business computer scientists about how the internet and Open Source business methods are radically new, and shall change society.

    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-shirt :). Would you happen to have an url handy?

    Alex Bischoff
    ---
  • 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.

    Good idea, it will be cheaper to replace the employee.

    ( N O T )

  • 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.

    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.

    --

  • 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.
  • 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.

    I'm in a similar boat. I bought one of the first commercially available 80386DX/33s from my dad about 4 years ago. He'd bought it new in '84 or '85 and spent a fortune on it. It's my firewall but may have to finally get laid to rest since it doesn't seem to like the PCMCIA bridge I put in it for my wireless network.

    The funny thing is that this computer is one of the original 80386DX motherboards. The cache logic (64k!) is done in discrete GALs and PALs. 16M is the total amount of memory you can put on it (4M in DIP, 4M in SIPP and 8M in 30-pin SIMM on a special riser card). I've never replaced the power supply, supply fan nor the 3.5" floppy drive (although I think that drive is a year or two newer than the system) and while the BIOS thinks that the year is 1901, the system works perfectly. Theoretically it should have given up the ghost long ago: DIP chips tend to become unseated and a motherboard that BIG and having that many solder connections should have had something go by now. But no... I have to replace P2 systems after a couple years of work but this old DTK system keeps on going and going.

    Maybe those old systems were just engineered "better". I say better because as a consumer it's never given out on me but, as a systems designer myself, I know that truly engineering something includes End of Life calculations and having a design survive past that is an indication of underengineering. :-)

  • If he bought it in '84 or '85 he must have worked at Intel. As I recall Compaq was the first with a 386 box and they brought it out in 1986.

    I'll have to reboot it tonight to see what the BIOS says. I'm pretty certain it's 1985 (I used to have a printscreen cap of the bios settings showing June 1995 I believe) but you may be right here... probably are. :-)

    Mhh, would that box be worth anything at an auction? or would it get treated like the rest of the landfill x86 clones?

    Probably landfill. :-) I've still got the original 120M (I think) HDD, but it doesn't work.

  • Take a look [tripod.com]. Reagan had two recessions during his 2 terms.
  • 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.
  • 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.
  • by Svartalf (2997) on Monday April 09, 2001 @11:34AM (#305429) Homepage
    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.
  • It's given me plenty to think about, particularly since I just did my taxes (TurboTax via WWW).. I've got a nice return due me (a smidge more than $4.2K) and I'm thinking about my options as I look for a new job...

    And Re Y2k spending: I did some time as a Y2k consultant (built a HPUX/Solaris/Novell/NT/IOS lab for testing software/hardware for a bank) and I know at least _they_ were chucking non-compliant equipment by the shedload. Lots of cheap SCSI HDDs and even fixable-BIOS 586s (which were considered cheaper and better taxwise to simply upgrade than fix) were scavenged ;)

    Your Working Boy,
    - Otis (GAIM: OtisWild)
  • 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.

    How stupid are you?

    Run that logic over an analogy: everyone should pay or their air, for fear of less money moving into the economy? Everyone must travel by space shuttle, since it's more expensive than car?

    D'oh! I think not.

    Communism damaged people because it was coercive. Free software is a gain because it is both more competitive and freely chosen.

    --
  • I develop linux software for bread, right now, but I still have to take issue with your comment about microsoft's treatment of developers. There are *MANY* things that I dislike about microsoft, but one thing you CAN say about the company, is they treat developers incredibly well.

    Even microsoft knows, that you don't sustain an OS without apps ;)

  • Not just Americans.

    I've been successfull in deducting phone bills in personal income tax by writing a nice letter telling the Finnish IRS that I need to access internet and use fax due to my work (I deducted bills for only two phone lines, data and fax).
    Same with many other issues. A computer, too, deductable in three years.

    However, with a company, I've been able to deduct a lot more. As I'm not the sole owner of the company (it's a real company that does real work), I can't of course bill everything from the company. But quite a lot, if I do my tax planning right and work a good deal with the other owners.

    Still, last computer purchase was a lease. Because I didn't see any point in buying computers any more, even if the company is in IT sector.. Of course if You own the computers, many upgrades can be deducted at once, but there's a limit to upgrading, too.

    However, when You use computers to the very end of their lifespan, owning may be cheaper. In such case I'd advice to check if You can get a good lease with an option to buy after the lease period. For me, about two years seems to be the "desktop" period of a new computer, after which it moves to some server duty, ending it's lifespan when I don't need another router or whatnot and thus don't have a suitable placement for it anymore.
  • 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.

  • This again sounds like an atoms/bits confusion. In the first place, we don't really *purchase* software, we purchase a *license* that makes it legal to use it. The software remains the property of those who produce it. So how is leasing any different, just the tax advantages? Before you'd pay $60 for a dos license and that was that and the software house had to come up with something new and improved, and so you'd buy a Win31 license, etc., etc. So now what, does a software leasing company purchase a volumn license deal for say Windows 2K and then lease it out to customers for more than the customer could have paid for it (the leasing company has to make a profit now) + the maintenance? I'm all cornfused now.
  • That's way cool man...oh yeah you forgot to mention that you must have two computers at home because if you use your "business" one for reading things unrelated to work and you still deduct it you are committing tax fraud.

    I have several computers at home, I write about network operating systems. At the time I wrote my last book, I had a 5 node network.

    You are the reason people with legitimate home office deductions are audited so frequently.

    And the book that I wrote that brought my almost $7,000 dollars is not a legitimate use of my ome office?

    And the book in 1999 that almost brought me $5,000 is not a legitimate use?

    Here's hoping the IRS audits you!!

    Gee, you're kind. You must be a joy to be around.

    Geez..This parent got +3, damn moderators are ignorant about finance and accounting and jump on whatever remarks "seem" cool without knowing squat.

    And you're fucking ignorant about tax codes and home office deductions.

    Schedule C asks you what percentage of the home office is used for personal work versus business, and I do go conservative on that amount.

    I underestimated that amount on my ISP, my computers, my books, my software, and my electrical consumption.

    Maybe you're thinking of people that abuse the hobby clause, let me tell you that I've done this for 2 years, and made money both years, so I could even lose money for 2 years without worrying.

    Anyhow, come back when your parents kcik you out of their basement and you actually fill out a 1040, with A, C and E forms.

    Moron.
  • by thermo (9732) on Monday April 09, 2001 @06:13AM (#305437)
    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.
  • By your logic, the economy would be better served by spending $1,000,000 to buy a candy bar. The economy benefits when the allocation of goods and services is efficient, when things sell at their market clearing price. If linux has changed the dynmaics of the marketplace such that the market clearing price for software is equal to the marginal cost of producing another copy (which, bizarrely is where goods are supposed to be priced in a free market), so be it. Why expend resources in an inefficient manner. If, as linux denonstrates, quality software can be created in the absence of government-enforced monopolies (copyright), then it is the more efficient solution.

    Or is it only when government intervention creates millionares that it doesn't damage society?

  • by apropos (12176) on Monday April 09, 2001 @06:27AM (#305439) Homepage
    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.
  • by joshv (13017) on Monday April 09, 2001 @06:38AM (#305440)
    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 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

  • Roblimo's editorial is spot on. All of my firms hardware is leased - much of it from the vendors in-house finance arm. Similarly at our client firms, their monitors all have "leased from" stickers on the back.
  • I think you're missing the point. The majority of hardware is still sold by OEM's like Dell to large corporate customers and non-enthusiast home users. Those users don't care if individual components are cheaper, as they're interested in the box and what it can do.

    In the case of corporate customers, they're as much interested in the lease terms (notice how Dell prominently advertises their lease prices) as the specs.
  • (Found you in meta; some moderator marked you as insightful w/out actually thinking about what you said.)

    Money being spent, does not help the economy. Production and creating wealth where wealth previously did not exist, is what helps the economy. Since produced things are often sold, I guess that makes it easy for some people to mistakenly think that the sale was the important part, rather than the production.

    To give some examples of sales that do not include production of useful things: Hurricane repair construction, refining uranium for use in warheads (instead of power), MSCEs convincing a company to "upgrade" to Windoze.

    A hurricane comes ashore and devestates a town. Thereafter there are many construction jobs. Lots of money is being spent on labor and materials. Was the hurricane good for the economy? Fuck no! The amount of money that is spent reconstructing after the disaster is a measure of how much the economy has been damaged, not helped. The same goes for most of Microsoft's sales.

    If Microsoft's products allowed computer users to do things they couldn't previously do, or if they made it easier for people to do things, then MS could be good for the economy. But if you've ever used Windows and just about any other computer platform, you know this isn't the case.


    ---
  • 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.
  • If you don't think that Microsoft was created and sustained by the government, think again. It was created by the government suit against IBM ... not MS specifically, but some equivalent company, was a necessary result.

    It is sustained by, among other things, changes in the copyright law, the tax law, etc.

    I don't think that the government consciously created MS, the way the British government created the East India Corporation, but it did create it. And it's rules and regulations sustain it.


    Caution: Now approaching the (technological) singularity.
  • No, Bob's bank account is not an exception. The bank takes that money and invests it in other companies. Arguably, that banked money is doing even more for the economy.
  • I can't tell if this is a troll or if he is serious, but I will assume he is serious, amazing as that may be.

    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.

  • by Todd Knarr (15451) on Monday April 09, 2001 @06:46AM (#305449) Homepage

    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.

  • I started wondering, too, so I got to looking.
    It looks like it's related to the ongoing struggles in Ireland.
    Noting that the person that posted that has an email in the UK, I started looking around for things related to that region.
    I found references (people's handles including "1690", references to "FTP") on the Ulster Historical Publications' guestbook.
    Perhaps "F*** the Protestants", I'm not sure - the only historical event that's recorded in Encyclopedia Brittanica for that year is the Battle of the Boyne, where the Catholics (led by James II) were defeated by the Protestants (led by William III).

    I hope I'm not completely off the mark, here.
  • The only companies that can make money online are companies that can also make money offline.

    Bull. My business makes money online and does not even exist offline.

    -c

  • 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.

  • by Shotgun (30919) on Monday April 09, 2001 @06:50AM (#305453)
    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!!

  • It would be very interesting if it was true, because 10 years ago most businesses were running dumb terminals and applications were actually running inside the software giants houses (or the company mainframe).

    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).

  • by Froqen (36822) on Monday April 09, 2001 @07:22AM (#305455)
    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.

    Dude... You are smoking crack:
    • Platform SDK [microsoft.com] - Build environment, headers, libraries, example source, tools
    • .Net Framework SDK [microsoft.com] - Build environment, headers....

    Here [microsoft.com] is the msdn download center and here [microsoft.com] 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 [msdnacademicalliance.com]
  • Well, that's incoherent.

    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.

  • So it's pronounced:

    Rob-LIHM-oh

    instead of

    Rob-LEEM-oh

    Didn't know that. Now I won't look like an idiot if I ever meet the guy in person and have to say his name. That already makes 2002 a possibly better year for me than 2001 would have been so far, due to one less embarrassing mispronouciation...
  • Bought that nice three piece suit yet, Roblimo? ;-) It really does read like something out of Business Week, and not the usual slashdot fare. Not that there's anything wrong with that. ;->)

    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.

  • 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.

    I know a few others have already responded, but I just wanted to point out that the validity of this statement rests upon the assumption that our economy will continue to be fueled by product purchases. Historically, this has been false.

    Approximately 60% (I forget the exact figure) of our GDP comes from the service sector. In recent years, economic growth from the product and manufacturing sector has been falling.

    This is why developing countries are dominated by textile plants while developed countries are dominated by... cleaning services, law practices, entertainment companies, etc... SERVICE oriented industries.

    The reason this seems to be the case is because every purchasable item, whether it be a service or product, inevetibly becomes a commodity, and in order to increase profits, business innovation must occur.

    Product-driven industries have been around a lot longer than service-driven industries. Trade is what fueled world economic growth for nearly 500 years, up until the 1950s or so.

    Most of the "stuff" that you need to survive (food, shelter, clothing, and recently, software and electronics components) has already been built. There is no longer a compelling business advantage to producing, for example, steel.

    So US companies relocate steel production to places like Mexico and turn to more lucritive revenue-generating sources, like the consulting practice of what kind of steel to use.

    So, given the historical record, it is likely a good thing that software is becoming a commodity, and people are paying less for more... because that allows more people to get it, and opens up a greater market for the services that revolve around those products.


    -haledon

  • So what kind of hardware does it need?

    Will I be buying more hardware in 2002?

    George
  • Have to agree with this guy.

    DivX;) encoding takes the most time and is my only current reason to upgrade my computer.

    Other examples of applications pushing hardware upgrades are MP3s (CDR), bloatware software (CDs), 3D polygon games (Videocards) and downloading pr0n (highspeed internet connections)

  • >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.

  • by GoofyBoy (44399) on Monday April 09, 2001 @06:45AM (#305463) Journal

    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?
  • While I don't really agree with the shaky basis of the opinion that hardware sales will go UP next year (cases get yellow?), it seems apparent that a fair amount of consolidation is taking place among online companies. With consolidation, we have increased viability, naturally...

    It also seems pretty obvious that there is a lot of thinning of the herd [fuckedcompany.com] going on right now, but that is because there was a new market for growth, and people saw other people getting rich no matter how stupid the idea was. Anyone who has looked at the Nasdaq anytime in the last 8 months can see that hemmoraging money is not a viable business model. Which brings me to the idea of viability. Is anyone surprised that companies like you mentioned, J.C. Penneys et al. are doing well and www.buyyourfreakingnecktiesonline.com is tanking? People that know how to run catalog operations are seeing this as a great opportunity to get their same customers without having to send out dead trees... It is not surprising that people with no experience and hence no name recognition or established customer base will have troubles.

    As for venture capital - of course businesses started with personal savings are more likely to succeed... Your ass is on the line!

    Market cycles dictate that there will be high and low points in our economy, but the rationale presented for a date of 2002 for a recovery seems unconvincing.

  • This reminds me of a bit I've come across many times from The Soul of a New Machine (I've never read the book itself, just keep seeing this reference). As the Jargon File [tuxedo.org] puts it:

    During one period [of the design of the Data General MV-8000 Eagle], when the microcode and logic were glitching at the nanosecond level, one of the overworked engineers departed the company, leaving behind a note on his terminal as his letter of resignation: "I am going to a commune in Vermont and will deal with no unit of time shorter than a season."

    Some days, that seems awfully temping.

    Tom Swiss | the infamous tms | http://www.infamous.net/

  • "FTP". Bigot.

    Someone want to 'splain the "FTP" thing to me? Please? Thanks.

    Tom Swiss | the infamous tms | http://www.infamous.net/

  • The only free complete programming environments I remember from Microsoft are GW-Basic, QBasic and DEBUG.EXE .

    Those have been great times for developers world-wide. Sadly, QBasic isn't included anymore in Windows 2000, but fortunately DEBUG.EXE still is.
    See http://support.microsoft.com/support/kb/articles/q 258/2/65.asp
  • 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.

  • by Illserve (56215) on Monday April 09, 2001 @08:22AM (#305469)
    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.

  • the dim flourescents, the grey cubicle walls and bone chilling air conditioning. This is sensory deprivation.

    We work so hard for our homes but dont make enough to actually live in them. We just sort of visit them every night for a few hours.

    There has to be a better way, not everyone can be rich. I know this sounds so Fight Club but its true. All I feel like doing is buying a sailboat, have it shipped down to the blue clear waters caribbean, the warm sunlight (something i rarely see anymore) and sail between islands fishing and harvesting live rock to sell to marine aquarium stores.
  • I've never seen that formula before... very clever and quite accurate.
  • by mjh (57755) <mark.hornclan@com> on Monday April 09, 2001 @06:47AM (#305472) Homepage Journal
    Mostly I agree with you, except when you say:

    The only companies that can make money online are companies that can also make money offline.

    While a lot of companies who make money offline are also able to make money online, they're not the only companies that can make money online. There are a gazillion pr0n sites that have absolutely no chance of making money offline because of the expense of producing hard copies of their stuff. But online, it's incredibly cheap for just about anyone to produce and sell pr0n. Remember, the pr0n sites are the most successful businesses on the Internet today.

    For the most part I agree with you, but I think that the Internet is something new and different. IF you can figure out how to leverage it, you can be a successful online only company. So far the only ones who've figured this out are the pr0n sites. But I have no doubt there will be more.

  • When flat panel prices become affordable I think well see them start to sell like crazy. The energy and space savings are huge and companies with lots of CRT's are going to appreciate the electric and air conditioning savings that they get.

    If the price comes down quick then LCD is going to be hugh, if it takes another two years then I think that LED flat panels may be selling like crazy.

  • Let's start a hypothesis. I give you 1 billion dollar. What would you do? I guess you would make vacation or quit you job entirely, spend the money into car(s), a big house, traveling all over the world and the like. But how long would it take until you would be finally bored with traveling and spending money? You know what the majority is answering what they finally do after received a huge sum of money? They choose to go back to work. But why work if you already got the money? Because everyone needs to have something that give live a sense.

    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."

  • If I lease an office, I can buy furniture or rent it. Whether I but or rent the filing cabinet, the stuff in that filing cabinet is still mine as long as I have the keys to the office and the cabinet. When I go, I can take the paper out of the cabinet and take it with me. If I lose my keys, I ask the estate agent for another set. If I think I'm going to run out of money and can't afford the rent next month, surely I'll sneak out all the important stuff.

    And today, even Microsoft are offering reasonably compatible data formats, so the analogy does hold.

  • Do computers really get worn out? Well the amount of ram they have soon becomes not enough and due to the memory form factor on the MB, you can't add more, or it is too expensive to do so (30 pin simms vs 72 pins simms vs dimms vs rimms etc).

    Hard disks become too small and their bearings are shot from spinning too much. They can be replaced, and cheaply too.

    The video systems can't display enough resoulution anymore and the monitors need new CRT's. The monitors can be replaced but maybe the video card can't because the MB won't support the new cards (ISA vs PCI vs AGP etc).

    So what really happens is that software and applications outgrow the HW, and the new HW is not compatible with the old.

    I've read that after a long enough time the silicon in cpu's and rom's will 'migrate' and become disfunctional but I think we are talking centuries here. EPROM memory and maybe FLASH memory will suffer charge leakage over decades and loose their content. So eventually I guess computers WILL become worn out. How many IBM PC-1's are still out there? Apple II's?

    Even Linux won't run (well) on original 386's, despite the claim to this. Well maybe as a router switch, but not much else. Even Linux has become more demanding of the hardware over the last 10 years. Still you can take a cast off Pentium I system, scrounge up some more memory and have a decent Linux box. I've done it. But I still prefer my new 866 PIII. Now Gnome starts up almost right away.

  • Actually yes... ;-)
    Various Shirts [hypermart.net]

    I've seen a lot of places that sell 'em online, shop around you'll probably find better deals :D

    -----

  • by decipher_saint (72686) on Monday April 09, 2001 @06:57AM (#305478) Homepage
    I agree with everything you said except:

    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!

    -----

  • "What I Say Here Doesn't Matter"

    That's right, you dumb f@$#.
  • Try not to open a wormhole with that kind of speed, ok? :P

    I've upgraded my firewall/router several times (it's now a K6-3 400 with 96mb) but that's because I've been running increasingly more intensive stuff on it. I've found that maintaining an old box enough to keep it workstation worthy really is more of a pain in the ass than I realized. Finding parts for them is most of the times easy, but sometimes very difficult. Most people just don't want to bother, and unless it has 2^(this.year-1992) megs of RAM to run W1ndow$, it's no fun at all.
  • When this whole .NET/software leasing debate started, I thought who in their right mind would pay a perpetual yearly fee for softwate instead of purchasing out right?

    After reading the article, I stopped for a second and looked around my office. And would you look at that!!! On my shelf, I have a dozen boxes from Novell...all software on a 2 year "lease." Then there's our McAfee license on another 2 year lease. Oh, and a 1 year lease on the Power Quest suit of software.

    Here we've been "leasing" our software for years. This is nothing new. Sure, every year (or every other year) we shell out to release the software, but it always comes with free upgrades during the lease anyway and in the end we actually get more software (Novell, McAfee, Powerquest bundle their packages) for less. We also no longer have to worry about a huge cost every 3-4 years to upgrade software.

    Software leasing is not new and it does work!

    As an example, our McAfee license is $24/client/2 years. At 200 clients, that $2800 a year. This includes all products in the McAfee suite, from ViruScan to GroupShield. Now, let's say it would cost us $38(bulk probably a little cheaper) to purchase out right and McAfee upgrades their software every 2 years (which they do), it would then cost us $3800/yr for just VirusScan an not their other applications.

    The main reason leases will work is becuase otherwise you will be purchasing upgrades. Gaurenteed upgrades in a lease with known yearly costs is a much better buisness prospect.

  • I don't think you understand how these license agreements work. If, after 2 years, we don't renew the license, then we can no longer use the software. How is this different from leasing?
  • by PrimeEnd (87747) on Monday April 09, 2001 @06:44AM (#305483)
    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.

    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.

  • Although the stock market does use computers, and now you can buy stocks over the web from your PC, I don't really think it is considered computing.

    I'm glad you got rich though, Robin.

  • This is why, just as communist societies damage the people (communist countries, without exception, are very poor countries), so too communist software damages society.
    I think you misunderstand what is the real problem with communism. It's precisely the greed -- the greed and the envy of the poor majority toward the rich few -- that made it such potent political force in the last century. What converted the ideas of Marx from an obscure economic theory into the violent mass movements was a very simple idea: take everyting from the rich and divide it equally among the poor. The majority of people who participated in the communist revolutions where motivated by the prospect of improving their living conditions at the expense of other people rather than by any of these beautiful ideas you can pick from your leftist college profesors in your expensive American universities.
    In the free soft movement, the primary motivation for the programmers is to have freedom to develop cool software in cooperation with other programmers without the obnoxious interference from the suits. It has its share of problems, but it has absolutely nothing to do with communism
    How could you confuse the desire for creative freedom with the desire for your neighbor's stuff is beyond me.
  • And Matrix 2. And Star Wars: Episode 2.

  • After the fallout ends, the companies that are surviving will look at each other, find out who has the best business plan, then either emulate it, or improve on 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 [pricewatch.com], 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!

  • Because Star Wars: Episode II will be out as well as the Lord of the Rings Trilogy. So far 2001 has sucked as far as movies go, IMHO of course.

    Sorry, couldn't resist.
  • The current slump with PC sales happens every few years. In a year or two everyone will want/need something faster and it will pickup.

    But before we go on, let's accept the fact that 1998 and 1999 were unusually good, and that we're unlikely to see anything like those years again in our lifetimes.

    I think that 1998 and 1999 were a reflection of how people felt. People felt good about the economy and tried to make money. So many people tried witht the web that they over inflated it. Now that things are "leveled off" they will pick back up and I predict many more "unusually good" or as I would say "over inflated years".
  • I work in the trenches providing IT services to small and mid-sized businesses that cant afford IT departments. This is the first article I have seen that even comes close the matching the reality i see every day in the business world. But you missed a few things for the most part we find our customers extremely paranoid about thier data and they will not go for an outside company holding the keys to that data. When your family depends on your small business to survive and it isnt a matter of I can get another job tomorrow you tend to be less trusting of anyone bigger than you.
  • 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. ;)

  • Leaving aside your comments, was the offensive sig really necessary? It really can only undermine your point (which wasn't badly put)

    You and I know damn well that FTP after a 1690 reference has got bugger all to do with File Transport Protocol.

    As for the market always being right, can you define further this statement? Right for whom, by what criteria, and right in which ways (morally, socially, numerically). Depending upon your answer, I might be able to come up with counterexamples.

    Unless you're a believer in Ayn Rand's Objectivist nonsense, in which case I won't bother wasting bandwidth

    BTW, I think you might find many libertarians who would object to your statement that Libertarianism is about letting "companies like MS do what they want".

    --Ng

  • Because in 10 years most businesses will be running dumb terminals and applications will be actually running inside the software giants houses...

    Scott McNealy, is that you?

    My point, of course, is that people have been screaming that dumb terminals will replace the PC in business for many years now, yet it simply refuses to happen. All sorts of reasons why, not the least of which is that employees like having a PC on their desk. From mail-room Jimmy all the way up the CEO, people like to be able to play solitaire, or a music CD, or try out that latest voice recognition software.
  • 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
  • by Fervent (178271)
    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 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...

    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 .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!

  • 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.
  • Most of us assume the editors sit in a room all day, reading submissions, giving them scores based on Linux relevance (+1), Microsoft bashing (+1), or the geek factor (+2), and post the highest scores. Jon Katz is typing on that laptop in the corner, but for the most part, it's become a brain dead operation: let the stories come to you, and think of something clever to say after the poster's words.

    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...

  • New technologies almost always allow new businesses. This is because established companies find it hard to undermine their existing business by providing a lower-cost, lower-quality product. And then the lower-quality product becomes high-quality quickly and the old business is hung out to dry (Christensen's argument in The Innovator's Dilemma.) This is yet to be proven for the Internet industry in all but a couple of instances, but I see no reason to doubt that it is so.

    New technologies sometimes allow new business models. For instance, the wire service model of news dissemination wasn't possible before the telegraph, and transformed the media industry of the time. Again, yet to be proven for the Internet, but there are several examples that pop to mind that are promising.

    I think it's too soon to be writing off Internet businesses. Doing so puts you at the same risk as those who trumpeted the 'new economy': being short-sighted. Given the past history of new technologies, I am not going to stop betting that some innovation of the Internet era will be considered revolutionary 50 years from now. The question is, which one?

    Sidenote: being a libertarian, you should distinguish between a monopoly won through aggressive business practices (Microsoft) and one granted by the government (British East India Company, at least initially.)

  • by milo_Gwalthny (203233) on Monday April 09, 2001 @06:25AM (#305525)
    I think there were two sorts of Internet businesses that failed: ones that were bad ideas, and ones that were badly run. Many .com companies could have been successful if they weren't trying to emulate Amazon and build an international brand in two years. My first prediction is that a new round of startups will return to many of the failed Internet business ideas and build profitable, low-overhead companies slowly. Much like almost all brick-and-mortar businesses are built. That will start in 2002, when people start realizing that, contrary to what the popular media says, computers and the Internet are not going away.

    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.

  • 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...

  • 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?
    -----
    D. Fischer
  • 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.
  • I disagree.

    For a long time, there were noticable improvements in *normal* application usage from increased processor speed. Around 1999, that stopped.

    Microsoft Word/Excel/LookOut open fast enough for anyone now.

    Navigator/IE/Konqueror/blah all render as fast as content can be delivered.

    We can all play full motion video/Listen to compressed audio.

    What else does the Average Joe need? Remember: Average Joe drive the economy. Not academics or some other small niche.
  • I thought there were 7 months left in 2001.

    Trolls throughout history:

  • by WillSeattle (239206) on Monday April 09, 2001 @08:19AM (#305542) Homepage
    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.

  • During the late 90's, the computer industry boomed. What companies that hadn't converted to doing most of their business electronically, did. And consumers jumped on and turned computers into mainstream tools.

    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).

  • 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.

    Gotta take issue with you there, friend.

    Microsoft did not "innovate." Microsoft reimplemented and marketed. It's still good; the world might be in sorry shape if they didn't. In general, Microsoft products are decent implementations - consistent and well marketed - but not innovative.

    There were many professional quality desktop publishing products for PCs before m$ came along (where have you been for the last 20 years?).

    As a client OS, Linux pales in comparison to the professional quality of products Microsoft offers.

    It all depends on what you do with your client. If you develope code, administrate servers, play mp3s, surf content oriented web sites, and talk on IRC, Unix may be a better client OS. For more common applications, you do have a point.

    My $0.02.

    --
    All men are great
    before declaring war

  • The long-lived "behemoth" model of programming hit a brick wall in the late 80's/early 90's. Applications were getting so large that any number programmers could not handle the complexity of a single project.

    MVS (now OS/390)
    BSD
    SunOS / AIX / HPuX
    Wordperfect
    Autocad

    Please.

    Microsoft's answer was OLE.

    It's not a difficult question. I believe IBM answered it years ago with Smalltalk and OS/2.

    ... the concept is not new, but the implementation [innovation] that Microsoft chose was very innovative.

    This doesn't make any sense. Basic implementation of an existing idea is not, in and of itself, innovative. And compared with DDE, OLE is nothing particularly special. (DDE? :)

    This is only one example of where Microsoft has pushed technology forward, because it was a requirement to continue developing ever-more complex software.

    I'm sorry, but it is thoroughly unconvincing (to me, at least).

    Microsoft was the first company to implement desktop publishing software on PC's that could create professional-looking publications easily with little-to-no effort.

    Wordperfect?

    They have rid PC's of arcane keyboard commands and have made software easier to use for years.

    Sigh.

    In my opinion, this is where they excel and where they continue to innovate.

    They do innovate. Don't get me wrong; they've done some neat things that other people haven't thought of. But my point was that the majority of their products are not built on innovation; they are simply reimplmentations. This isn't really a weakness here. It's just a fact.

    --
    All men are great
    before declaring war

  • Personally I don't think it'll pick back up that fast and I'll explain right after this point (before I forget)

    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.
    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 [antioffline.com]
  • ... 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.
    --

"Just Say No." - Nancy Reagan "No." - Ronald Reagan

Working...