Winners . . . and Losers

Any crank on a park bench can reel off a list of doomed technologies. For that matter, all of today's digital gear will eventually wear a toe tag. A fat lot of good this does you in deciding what technologies your company should bet on.

The crucial question is life expectancy. Will your investment in Bluetooth-enabled printers, Linux servers, or Web phones leave you hanging out to dry six months from now? Alternatively, will the costs of walking away from an iffy technology for an expensive-but-safe investment today slam your company's profits tomorrow?

And what if you're wrong? What if you turn your back on Java, XML, or Palm devices only to see their popularity soar? Whose career is toast then? There are no sure things for technology. Just remember the unstoppable Lotus 1-2-3 spreadsheet, the pen computing revolution, and the Amiga. And don't count out technologies once written off as sure losers. (Macintosh, Windows Explorer, or Unix, anyone?)

Ziff Davis Smart Business identified 18 key technologies that may or may not have a looming appointment with the undertaker. Over the next 18 months, you'll have to decide whether many of them have a future. And you'll have to back your decision with dollar bills.

So we gathered an illustrious group of business and technology experts—CEOs, investment bankers, tech-made billionaires, digital visionaries, and the like (see Meet the Experts). We asked them to calculate the odds on our list of 18. The results will surprise you.

Palm OS Palm's handheld operating system is less a business tool than a social revolution. Even so, next-generation handwriting- or voice-recognition technology could instantly turn the Palm OS into yesterday's fad. Microsoft's Pocket PC operating system is showing up—invited or not—in dozens of devices. Meanwhile, Palm is licensing its OS for cameras, phones, watches, and every other contrivance it can find. Palm and other handheld vendors also have to keep an eye on Research In Motion's BlackBerry, says Michael Saylor: "If Palm and Handspring are going to grow, they'll need a competitive product." ODDS: The Palm OS will appear in cameras, telephones, and dozens of other devices. But even moderately innovative technologies could shake its hold on the handheld PC market.

Pocket PC Microsoft believes that you'll prefer learning one bad operating system to working with multiple operating systems. Microsoft is wrong. And this partly explains why sales of Pocket PC devices have been slow to gain momentum. On the other hand, the Pocket PC could see new life thanks to Intel's XScale microprocessors and a new version of Microsoft's OS, code-named Talisker, which won't be available before 2003. "[The Pocket PC is] more alive than people realize," says Chris Shipley. "It's in everything." Others aren't so keen on the OS. "It's dead," dismisses Saylor. ODDS: Despite a late-year surge in sales, Pocket PCs are still playing catch-up to Palm devices. But Intel's new microprocessor and an updated OS could improve its prospects.

Pagers First they got cheap. Then they got smart. Two-way Web-enabled pagers outlast the best handheld PCs for battery charge. And they slip discreetly into a pocket. But then, so do many cell phones. Have pagers finally outlived their usefulness? Not necessarily. "Between cell phones and [RIM] BlackBerries, your communications are covered," says Guy Kawasaki. Others aren't so confident. But the low cost of paging services will keep this technology kicking for the foreseeable future. ODDS: Remember AM radio? It's still around. Likewise, paging networks will appeal to an ever-smaller but tenacious market.

Web Phones Like Michael Jackson's latest comeback, Web phones were done in by hype before they ever arrived. Needless to say, first-generation Web phones bombed. But this is largely a matter of semantics. "Soon every phone will be a Web phone," says Kawasaki. The difference? No one will bother to randomly browse on one. Andy Seybold says, "There is no excuse for using a desktop browser on a phone. We'll [eventually] have something called active content. From my calendar, I'll double-click on a flight. The back end of the phone will be smart enough to check the departure times." ODDS: There's no doubt that telephones and the Internet make a solid marriage; their convenience is too compelling. But today's Web phones, with their tiny screens, are nothing more than unfortunate, doomed trial balloons.

WAP It had everything going for it—the wireless revolution on one hand, the Internet revolution on the other. Its list of supporters includes just about every major player in the industry. So maybe they'll come to its funeral. If you've ever eaten a bad oyster, you'll know what it feels like to decipher a Web page from the tiny screen of a wireless handheld device. Some say WAP has a future. "It's low-bandwidth virtual reality," says Ray Kurzweil. But, says Shipley, "It should never have been allowed to live." ODDS: Yes, wireless access to the Web from a handheld device is in your future. No, WAP won't be what takes you there.

Boxed Software What's in a box, besides familiar conventions and registration cards you'll never mail? A lot, it seems. None of the industry pooh-bahs we interviewed believed that shrink-wrapped applications would go away. Why? "People want to touch and feel their applications," says Seybold. Also, boxes still offer convenience "for large programs, multimedia, and code development, in particular," says Saylor. Ashfaq Munshi believes boxed software will thrive for another reason: "Price points will go down dramatically." ODDS: Downloading and renting are definitely the wave of the future. But certain large applications will still come in a box—even if you buy them online.

Application Service Providers It costs roughly $5,000 a year to keep the apps on your PC running peacefully, with the latest versions installed and everything registered and virus-protected. Worth it? It's no wonder that application service providers (ASPs) have made impressive inroads for accounting, customer relationship management, and personal finance. ASPs "will be monsters when they finally grow up," says Smith, alluding to the high turnover among providers that has made many companies wary of ASPs. David Hitz believes ASPs' problems will be short-lived: "With the economic downturn, the value proposition for ASPs and SSPs [storage service providers] has changed." No doubt, it will change again—for the better. ODDS: They'll pull through. But their short-term province will be vertical applications—and those best suited to small businesses.

Transmeta Crusoe It's cheap. It's speedy. It extends notebook battery life to an honest three hours. And it's fully compatible with Windows. Transmeta's crafty Crusoe processor promises to wean an entire generation of field workers and gypsy managers from their dependence on AC outlets. What could possibly ail the technology? Production has fallen short of expectations. Also, chip ogres Intel and AMD have essentially decided the game is already over. "Intel kills everything," says Hitz. As Seybold laments, Transmeta has "the right idea, but I'm not sure you can battle the Intels and AMDs of the world." ODDS: Crusoe's best prospects lie with digital gadgets, rather than notebooks.

Macintosh "The advent of the Web—with digital video, music, and pictures—has breathed new life into the Mac," says Saylor. The platform can "succeed with only five to 10 apps." Or, as Shipley bluntly states, "It just won't die." Not surprisingly, views about the Mac's viability still provoke tribal warfare. Kurzweil, Hitz, and Ed Wadbrook all believe the platform will be pushing up pansies. ODDS: No computer maker pulls a rabbit out of its hat as often as Apple. But unless Mac apps are key to your enterprise—education, video editing, high-end graphics, and the like—don't be fooled by Apple's sleight of hand.

Windows XP Never mind its lackluster retail sales. Upgrades have already boosted Windows XP past Windows 98, making the latest from Microsoft the company's best-selling OS yet. So why such joyless acceptance? Saylor gives everyone permission to ignore XP: "I'm sure it's the operating system we'll all be using. But I don't see a compelling driver for upgrading." No one expects widespread revolt against XP, even after the security snafu discovered in December. But many people will be happy to wait for a substantial upgrade from Microsoft before they ante up. Seybold says Microsoft shot itself in the foot with its restrictive new licensing arrangement. ODDS: Memo to Microsoft: Sure, we'll buy XP . . . eventually. How about letting innovation—rather than your budget calendar—drive your next upgrade?

Linux It's the unsinkable OS. "It's like Strom Thurmond," says Shipley. "It's surrounded by all these nurses who keep it alive." The open source OS's malleability is its allure—and its peril. Munshi believes Linux will become invisible. "You'll find it mostly in embedded systems, because it gives you power over the source," he says. Kurzweil isn't so optimistic. "There are issues troubling it: quality control and the kind of leadership that Microsoft provides," he says. Hitz has begun to see it in very high-performance computing—"Hollywood special effects, oil and gas and geological processing—in all the places we once used Crays or SGIs." ODDS: It's a safe bet for networks, embedded systems, and high-end computing. But it won't be driving word processors or spreadsheets in great numbers during your lifetime.

Java Even a kid genius pulls the occasional B. Java promised to be a miracle—producing software that runs on any platform, in any environment. Then it ran into reality. Because emulation makes this magic happen, Java programs are s-l-o-w. Says Hitz, "Java is still alive, but the exciting vision of Java isn't. It turned out to be just another programming language." Kurzweil believes that just-in-time compilers may rescue it. And it's got a solid future in network apps development. "What Visual Basic was five years ago," says Saylor, "Java is becoming." ODDS: Programming languages never die. But Java is no Web wunderkind. Look for improved speed in future versions—and watch it appear in all manner of devices, from set-top boxes to secure ID cards.

Voice Browsers How else can you negotiate a left turn without spilling your latte while shopping for socks? Voice browsers work—except in the places you need them: cars, sidewalks, airports, office cubicles. Ambient noise, language comprehension, and industry standards are among its many obstacles. But voice browsing is still young: "Look for avatars that communicate at a human level—with natural language—within 30 years," says Kurzweil. Saylor, on the other hand, believes it will surprise everyone: "I think the technology is ready for prime time. It's going to explode in the next five years." ODDS: The usefulness of this technology will shove it into applications before it's ready. No matter. Little by little, voice browsing will become an ordinary part of surfing the Web.

XML Extensible Markup Language promises to usher forth a revolution in Web-based services. Trouble is, dozens of competing interests are pushing their own variations of it. XML will never live up to its promise—the ability to share data streams between Web-based and non–Web-based systems—until consensus can be reached about file sizes and other matters. Even so, agreement is nearly universal that it's poised to dominate the Web. "It's very effective," says Kurzweil. "It provides a fluid integration of information." ODDS: Despite its gawky adolescence, almost everyone agrees that XML is the future of business on the Web.

Peer-to-Peer Networking Forget Napster, which was little more than a passing showboat of what peer-to-peer (P2P) networks can do. As bandwidth increases, the type of file sharing that becomes possible boggles the mind. "Imagine everyone in the world carrying around Palm devices with voice recorders, left on all the time, then uploaded to the Net," says Hitz. "Every conversation is recorded on the Web." For now, the potential for viruses limits P2P's business uses. And as Kurzweil points out, once the technology takes off, "it turns on their heads business models that rely on intellectual property." ODDS: We've seen only the beginning of what this technology can do. It's going to be big—really big. And it's going to throw dozens of industries into upheaval along the way. Just ask the record companies.

Wi-Fi While great buzz and legend has puffed cloudlike around 3G networks, Wi-Fi (802.11b) slipped in the back door and offered get-to-work wireless networking cheaply and easily. Granted, the technology works in limited spaces—offices, coffeehouses, airport lounges, and hotels, for example. But it's the best alternative going. "It was the most important new technology in 2001," reports Smith. Others concur. Seybold prophesies that combo Wi-Fi/3G cards for notebooks and other portable devices lurk on the horizon. ODDS: Those who want fast wireless Net connections and networks—and want them now—have no better alternative.

Bluetooth Hobbled, battered, and bruised—could anyone have inflicted more damage on Bluetooth than its supporters have? Bluetooth chips are still expensive, which has kept the technology out of low-cost devices. This is set to change: Ericsson predicted in January that Bluetooth chipset prices would drop to as low as $3 by the end of the year. Meanwhile, security flaws, delays, and industry squabbles seem finally laid to rest. Can the technology win? "People will rely more on short-distance wireless technologies as we go forward. And Bluetooth is the front-runner," says Saylor. Seybold says: "It's very important. And it will gain momentum over the next two years." ODDS: Bluetooth devices trickling to market have been greeted with less than a stampede. Lower costs and innovative hardware makers will revitalize the technology.

Cable Broadband Access and DSL Many believed that DSL would have been the easy broadband leader by now. But the phone companies fumbled. The Yankee Group estimates that as of last summer, 4.7 million customers were using cable to access the Net, as opposed to 2.2 million DSL subscribers. DSL's advantage? It offers as many as 24 lines on a single copper wire; it transmits data more than 10 times as fast as a dial-up modem; and it doesn't suffer the performance lag that high-usage cable brings. Still, the numbers speak for themselves. "[Cable] is alive, but it's in trouble," says Shipley. Five years from now, cable may finally succumb. In the meantime, it's the easiest way to get broadband at home. ODDS: With satellite access all but dead, broadband for consumers is still a fierce two-horse race.

Meet the Experts

It takes chutzpah to pronounce a digital technology dead. In a relentlessly optimistic industry, you risk losing friends, customers, colleagues, and employees. It's no wonder that several people invited to comment for this article declined. However, the people who spoke their minds represent the vanguard of today's technology industry.

David Hitz Ranked one of the 15 richest men under age 40, Hitz is executive VP of engineering at Network Appliance, which he cofounded with James Lau in 1992.

Guy Kawasaki CEO of Garage Technology Ventures, a venture capital investment bank that provides funding services for high-tech startups, Kawasaki was an Apple Fellow, is the author of seven books, and is a popular public speaker.

Ray Kurzweil Inventor, author, entrepreneur: Kurzweil has hobnobbed with presidents, developed and sold four artificial-intelligence businesses, and won several lifetimes' worth of degrees, honors, and awards.

Ashfaq Munshi After cofounding four technology startups and selling one, Munshi founded and is now chairman of Radiance Technologies, whose software speeds streaming data across networks and the Net.

Michael Saylor At the ripe old age of 24, Saylor founded MicroStrategy, which grew to a $1 billion company, roiled by market upheavals like few others. Saylor is the recipient of many entrepreneurial awards.

Andy Seybold A former VP and chief analyst for Dataquest, Seybold is a consultant and industry visionary. His several industry newsletters are among the most often cited for mobile computing.

Chris Shipley A former magazine editor, Shipley is VP of editorial at IDG Executive Forums. Her Demo conference is among the most closely watched in the industry.

Gina Smith She got her start in print journalism, then became a technology correspondent for ABC and CNet. Today Smith is president and CEO of New Internet Computer Company, which makes low-cost Net-enabled PCs.

Ed Wadbrook After gigs at Lucent, AT&T, and the NBX Corporation, Wadbrook is now executive director of voice solutions at 3Com and a frequent public speaker.

Copyright © 2004 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in Ziff Davis Smart Business.