Looking Forward; Looking Back

December 1994

It's time to think back about what happened in 1994 and to try our hand at predicting what might happen in 1995.

Some major 1994 milestones included:

• The very successful entry of the Apple PowerMacintosh to the marketplace, kicking off the age of the PowerPC chip. IBM was scheduled to enter the PowerPC market this year, too, but the inability to run OS/2 or NT on the initially shipping product made IBM choose to delay this announcement into 1995. Nevertheless, with more than a dozen strategic alliances, PowerPC looks like the RISC chip for the future. In fact, the “journal of record” for microprocessors, Michael Slater’s Microprocessor Report, noted on December 26, 1994 that PowerPC had taken the lead, surpassing Sun’s SPARC and worrying Intel into a deal with Hewlett-Packard to produce a hybrid chip in the late 90’s.

• The beginning of the end for DOS as new software entirely disappeared (except in the consumer games market) and even upgrades of business software is beginning to taper off. The last of these may appear in 1995.

• Mid-year, Borland shipped dBase for Windows (at last). The product's unit sales have not done badly, but the price has been eroded by competitive battles with Microsoft and Borland is now reorganizing, attempting to salvage the company at a smaller, leaner, and more manageable level. The product received kudoes as an innovative and powerful new contender, one more proof of the industry adage that good technology isn't what wins markets. (What does? Acceptable technology and brilliant marketing, with a little luck on the timing side.)

• Micrsoft NT 3.5 shipped and with the big improvements it offers over the initial 3.0 version of NT it is now beginning to catch on as a substantial contender in the server market. As many as half of all business buyers have plans to use NT as their server software over the next few years. Supporting these plans, almost every hardware vendor, including all the RISC platforms, has vigorously gone after NT ports, and the ISV's are pushing NT server software into the marketplace. By 1996, NT will be a very important product in the server market.

• IBM's OS/2 Version 3.0 (alias WARP) shipped, with the biggest IBM advertising and promotional campaign in history behind it -- everything from print and TV ads and football bowl sponsorships to trips to Maui for successful dealer salesmen. 800,000 copies of OS/2 were sold in the first few months the product shipped and IBM is looking forward to a very busy first half of 1995, especially since Microsoft will not be shipping Windows 95, in competition until later in the year. Any further delay in Windows 95 will make IBM very happy.

• Microsoft's acquisition of Intuit for $1.5 billion, showing the software giant's genius for continuing to enter new markets and dominate them and their willingness to be egoless in the process (they sold off their own much less successful Money product to Novell to clear the way for the yet-to-be-approved deal). (A detailed article on this subject appeared in the November 94 issue of the TrendsLetter.)

• Intel's proof that engineering arrogance and ignoring the customer's point of view can create a PR disaster out of a minor problem any day of the week. A tiny Pentium chip flaw became major news not just in the technical press, but everywhere, threatening (but failing) to affect the all important Christmas consumer PC market, which either didn't notice or didn't care. Intel's credibility (and vendor credibility in a more general way) will suffer for this newsletter.)quite some time as business buyers increase their levels of cynicism. (See our separate article on Intel and the Pentium Mess later in this newsletter).

Looking Forward to 1995

The big news in 1995 will be in operating systems, with announcements, improvements, shipments, and betas all year long.

• Since Microsoft decided to name their Chicago product (the next version of Windows) Windows 95, this had better be Windows 95's year. Already, delivery of the product has been pushed out to the August time frame and analysts are predicting further delays. There will be red faces in Redmond if the product has to be renamed before it even ships to Windows 96. There is already, however, a giant preview program (beta 3) almost in progress, and Microsoft expects about 400,000 users and developers to try the software in this preview version, so the line between shipping and unshipped software is becoming less clear.

• At CES, Microsoft will be showing a whole new Windows interface, for naive users in the consumer market, called Bob. It features images of rooms and cartoon-like characters, providing a friendlier, less-technology-intrusive interface. The eight bundled programs are aimed at the home user and supports chores like letter writing, a calendar, an address book, Email software, an electronic check writer/bill management module, a household manager, a guide to financial information and a geography game. Windows and DOS programs can also be launched from within Bob.

• NT 3.5 will, we hear, get a pretty new face (interface, that is), to make it consistent with Windows 95. This is because a new interface for NT was not scheduled until Cairo and now that Cairo's been pushed into 1996, that looks like too long to wait for something more in line with the rest of the industry.

• Apple and the Bob product will, with luck, ship the next version of the Macintosh operating system, known as both the code name Copeland, and also as System 8. It now appears that this product has been displaced into late 1995 or 1996, later than many Macintosh afficionados had hoped for, especially since Apple badly needs to make improvements in the OS to compete with new features in Windows 95.

• You will see new hardware all year long and this is, in some sense, nothing new. That is, every year the PC industry turns out faster, cheaper, smaller, and more powerful computers. That's simply following a few very well known rules. This year, we may get a few new bounces. Look for:

• Unique new folding keyboard technology to enable IBM to offer a smaller "full-sized" computer notebook.

• At least half a dozen General Magic-based personal information/personal communications devices, mostly from Japanese sources.

• The beginnings of a Macintosh clone market which will completely change the low-end Macintosh pricing algorithms and make the Macintosh much more alluring to the consumer market. It will also make Macintosh boards available to product builders as the basis for all kinds of "appliance" devices and could create a new industry. Radius, a long time supplier of Apple peripherals, has already agreed to be a clone maker, aiming at niche markets it already knows.Of course, one Japanese company has already signed up to build a game-Macintosh (not a Mac) which can be upgraded to a "real" computer. Too bad John Sculley didn't agree to do this in 1986. The entire computer industry would look different today. It's too late for that, but it's never too late for interesting new things to happen.

• 1995 will see the continuing convergence of software companies, based on the very high costs of software distribution and support. Wonderful software can be dreamed up by one person and written by a few, but the process of selling software in today's marketplace requires bigger companies and more money and that argues for consolidation. Look for:

• Another Microsoft acquisition (big one; they make little ones all the time). Big ones are designed to get them into new markets or give them control.

• More consolidation in specific markets -- we think database, database tools, and workflow are good candidates (lots of companies to buy, several big successful companies to do the buying).

• The beginnings of the emergence of the Internet/ Cyberspace world as a full-fledged part of business computing, supporting inter-organizational Email and shared databases, electronic commerce, and a myriad of yet unimagined activities. We suspect many of the companies who will make their fortunes in this market will be new companies, but often built by men and women we already know, who combine their skills and experience in communications or computing or programming, with particular expertise in some aspect of commerce, or an insight or vision of some future world.

Of course we will be here to joyfully track it all, happy to be surprised and delighted by what each day brings. Call us with your latest offerings and share the fun.

Comments or Questions: Send Email to opinions@wohl.com

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Entire contents © 1994 by Amy D. Wohl. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden.