Expect The Unexpected In 2005

No one likes surprises—unless there's an upside. And although the IT business did pretty darned well in 2004 (considering), a resurgent boom in 2005 would be a serious surprise. But there are some hopeful signs: the stock market's late-year rise, rising global demand, and continued open-source innovation. While it's no cinch that '05 will see a killer upswing—and no one expects dot-com-style exuberance—the high-flying technology world will likely continue to roll onward with broadband and wireless everywhere, innovative software models, and the never-ending battle between hackers and security firms.

So how can we (and you) predict surprises for 2005? It's not easy, but if you educate yourself about the market, the trends, and the fundamental underpinnings of technology, you can at least be prepared for the worst—or best—surprises. It also helps to be willing to take a shot in the dark and not worry too much about egg on your face come 2006.

So, here are our predictions for IT surprises in the coming year in E-Business, Security, Software, Networking, and Mobile/Wireless. Who knows, some of them might even come true!

Keith Ferrell, David Haskin, Preston Gralla, Fredric Paul, and Don St. John contributed to this report.

E-Business Predictions
Indian Outsourcer Buys American Outsourcer
Why not? The hottest Indian companies are flush with revenues and prospects for the coming years, and nabbing an American outsourcer would have a dual welcome effect—giving the expanded company a richer services portfolio and better time-zone coverage, while also blunting some of the negative hype about jobs flowing offshore.IBM Will Reinvent Itself With Services & Servers
If Indian companies don't look to buy out American service providers, IBM may want to add them to its Global Services arm. As for servers, where do you think all the effort and resources that used to go into its sold-off PC line will be redirected?

Microsoft Clears the Legal Decks
The thought of Microsoft not being sued by anybody is exceedingly strange, but after settling with Sun and most of the states (and a pending ruling in the EU), the brain trust in Redmond isn't looking at too many more major claims against it. Real Networks and Novell are still on the docket now, but it seems likely that Microsoft will want to get everything off its plate before releasing its two next flagships, Longhorn and Xbox 2.

Living Room Convergence Will Finally Happen
Why is that an offbeat prediction? Because people have been claiming it's just around the corner for so long that it seems almost silly to do it again. But it finally makes sense: High-definition TV is hitting some critical mass, HD and digital cable boxes are adding in DVRs, and a new generation of gaming consoles will start on the path toward American homes this summer. And the real reason it'll happen this year is because the proponents of proprietary systems, such as Microsoft and Sony, will see that they need a revenue source that is unassailable by open-source technology.
Security Predictions
New Tech Tools Invite New Tech Attacks
Major hacker damage will be wrought against smart phones, PDAs and other mobile devices. And as a consequence, some enterprises begin prohibiting employees from bringing personal technology into the workplace. Look for cell phone companies to begin selling anti-virus add-ons to their phones.

There Are No Orchestrated Cyberattacks by Terrorists
This particular security shoe has been waiting to drop for a long time - and if it doesn't fall in 2005, plenty of pundits, including some at CMP, will be surprised. But we've all been surprised before. Of particular concern if outright acts of cyberterror or cyberwar don't take place in the next year, will be the increased difficulty in justifying and obtaining funds for Homeland-level cyber-defense activities.

Government Gets Its Act Together
On the other hand, maybe the government will get its cyber-security act together and institute a sweeping and effective overhaul of all inter-agency/department communications and accessibility, replacing legacy liabilities with the right equipment for the job. But probably not.Cybercrime Costs Exceed $500 Billion
This one may be a no-brainer—the amounts stolen by hackers and cybercriminals has been rising rapidly. Next year should be the one where the costs explode, comprising a dramatic percentage of the global economy and a major drain. Cybercrime in 2005 will become even more highly automated and pervasive—major financial institutions will begin admitting that the problem is far larger than even the alarmists have claimed.
Software Predictions
Subscriptions Thrive

After years of pushing for it, software vendors will finally start to make headway with a pay-as-you-go software business model—and the old software license will finally start to shrivel up and go the way of the dodo bird. Why? IT shops don't want the huge upfront costs for features they don't need, and vendors want steady income spread over longer time frames. Service and support become the major source of income for the software biz. Just be careful you don't get locked into paying for upgrades you neither need nor want.

Linux Arrives On the Desktop
Sure, Linux has gained acceptance in the enterprise, with servers and some mission-critical applications, but would your grandmother use it on a regular basis? Not yet, but companies such as Linspire will finally start to shift the landscape with cut-rate $199 Linux desktop systems that will run basic productivity applications and get granny online in a snap.

Microsoft Goes Open Source
If you can't beat 'em, join 'em. Already, Redmond has been making noises with tiny steps toward sharing code. With the EU verdict against the company, and Linux making inroads globally, Microsoft could well decide to start going to open source for some of its less-core applications. That would be the ultimate triangulation move to grab ISVs back from the clutches of Java and Linux.

RFID Everywhere
Privacy concerns are allayed, warehouses are awash with RFID tags, and the software necessary to track everything becomes commonplace at suppliers. Sound surprising for 2005? It would be, but you can still pretty much count on RFID continuing its march toward widespread acceptance.

Networking Predictions
We Don't Need No Stinking Power Cords!

Power over Ethernet (PoE) technology will be deployed big-time, allowing wireless access points, VoIP phones, and many other devices to be used with less hassle and expense, because they can get electricity and Ethernet connectivity from the same cable. Electricians unions across the country walk out in protest.

Enterprises Embrace Mobility
So far, corporations have only grudgingly incorporated WiFi, 3G, IP VPNs, and other technologies designed for mobile workers. In 2005, enterprises finally get it, and start designing networks around mobile and out-of-office workers. Yes, we know this conflicts with our first Security prediction, but look for both of these trends to happen simultaneously anyway.Linux Becomes a Core Part of the Network
Everyone loves to talk about Linux, but not that many people actually do anything about it. In 2005, Linux will accelerate its move toward the center of the enterprise network, and become the operating system of choice not just for pilot programs, but for mission-critical applications.

Intelligence Thrives at the Edge
The core of the network is no longer where it's at—the network edge is the next frontier. Intelligence gets built increasingly into devices at the network edge.
Mobile & Wireless Predictions
The Shakeout Begins

The number of fast wireless access options will increase in 2005 but, initially, the plethora of options will cause marketplace confusion. Those options start with Wi-Fi hotspots that, increasingly, are being expanded to cover areas as large as cities. Then, there's 3G cellular data services. In the U.S., Verizon leads in this race, claiming that 75 million potential users in the U.S. will have access to its 3G 1xEV-DO service by the beginning of 2005. A third option will be wireless broadband such as WiMax and FLASH-OFDM. WiMax has far greater name recognition but won't support mobile users as does FLASH-OFDM.

Phones Do More
In the last year, smart phones such as the palmOne Treo that combine wireless voice and PDA functionality started becoming popular. Expect even more functionality to be stuffed into these phones in 2005 as their popularity grows. For instance, smart phones with built-in Wi-Fi will not only enable Web browsing but also wireless voice-over-IP. In addition, adding near-field communications (NFC) or smart-card technology to phones will people use them make payments—simply swipe them near a compatible point-of-sale terminal instead of using a credit card. This is starting to take off in Japan and trials are underway in the U.S. and Europe.

Access In The Air
Internet access and possibly cell phones are coming to air travel. Fast data access in the air was kicked off last fall by Lufthansa and Connexion by Boeing. Boeing's arch-rival, Airbus, also is developing in-flight Web access and more airlines are expected to provide this service, particularly on long-haul flights. In-flight Net access should prove popular, but not everybody is happy that the Federal Communications Commission (FCC) will examine allowing cell phone access on flights. Safety isn't the issue. The big concern is whether fliers will be forced to listen to the jabber of countless private conversations with no hope of escape. Who knows, maybe the airlines will divide jetliner cabins into coach, business class, first classs, and non-calling.

Keith Ferrell, David Haskin, Preston Gralla, Fredric Paul, and Don St. John contributed to this report.0