CeePrompt! Computer Connection

Originally published Monday April 02, 2001

Economic trends foretold ~ technology forecast

The financial news illuminating these business pages has been bleak in the past few weeks. The overall slump in the market seemed to begin some months ago in the technology sector with blue chip issues soon following suit like dutiful soldiers. I am a rank novice when it comes to understanding the complexities of our economy, but common sense tells me that the technology industry should have seen this slow down coming.

Perhaps I'm oversimplifying complex theories of macroeconomics, but if you reflect on events over the last two to three years, a lull in the technology indices was practically guaranteed. Specifically, I'm referring to the Y2K phenomena in which the technology industry scared the daylights out of the world, practically, with predications of Armageddon. Everyone was scrambling for Y2K solutions and those who weren't were moving to this hills with their solar ovens and gold nuggets. Certainly there was legitimate cause for concern in certain areas, but many businesses large and small simply seized the opportunity as reason enough for an information systems overhaul. Better to be safe than sorry in case the doomsday predictions were true.

Software upgrades begat hardware upgrades. Hardware upgrades begat network upgrades. Network upgrades begat telecommunications upgrades and on and on. Consumers spent billions of technology dollars in anticipation of Y2K in order to be well prepared for the coming years. These were not upgrades that were likely to be expensed during one year, either. Most were serious capital improvements that would be amortized over many years.

So it's no surprise that technology related sales are down. Folks have what they need for the time being and unless there are serious breakthroughs in new technology areas, they're probably set for a few years. Additionally, there aren't many new products available that are so dramatically different or improved as to spurn wide spread buying. As consumers, we can expect many tech companies to evolve and change in ways that will insure ongoing profits.

Software companies may turn more to subscription-based services, such as those adopted by Intuit. Intuit charges its Quickbook business customers $129 annually for the current payroll tax tables. This is the same price as the software alone costs. By charging annually for the tax table updates, they've insured their payroll customers will buy their product every year. Other business bookkeeping programs have followed suit. PeachTree Complete charges users $129 annually and MYOB charges $299 for its payroll services.

Microsoft is readying itself for their next operating system release called Windows XP. Formally called Windows eXPerience, it is the successor to Windows ME and is based on the Windows 2000 code. As always, Microsoft promises XP to be the most stable of all the Windows operating systems but new in this version are multiple tie-ins, or links to third party vendors which will ultimately garner additional revenue for Microsoft.

Central to Windows XP is Microsoft's .NET initiative (pronounced dot net). This is part of Microsoft's vision that would integrate its software with the Internet and make it easier to swap information between computing devices. "The Windows XP-based PC will be at the center of the .NET experience, empowering users to move beyond disconnected applications, services and devices to complete computing experiences that redefine the relationship between people, software and the Internet", according to Microsoft.

An annual fee will accompany some web services, such as HailStorm that was announced last week by Microsoft. HailStorm would enable an e-commerce site to access a user's personal preferences without the user having to key in the information. The web application would then send the data to the user's Palm Pilot, for example, if this was their computing environment of choice.

Technology will rebound and continue to reinvent itself. Prosperity will also again run high when emerging technologies, such as wireless, become mainstream and must-have.

Cathi Schuler owns a computer literacy training/consulting company, Cee Prompt! She is a co-author of computer textbooks and can be reached by e-mail at cschuler@uop.edu or cschuler@ceeprompt.com or by mail c/o The Record, P.O. Box 900, Stockton, CA 95201. She is on the Internet at: http://www.ceeprompt.com. Click here for past archived columns.

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