Yet Another Set of Predictions for 2005

Everyone I know is making predictions for 2005. I figured I might as well do the same. Here goes (read the full post if you want the whole story):

1. Mobile payments become big
2. Home networking stands still
3. Web 2.0 becomes a dirty word
4. Open source is the only big story in enterprise software
5. People figure out blogging

Something interesting in the world of mobile payments will happen in the United States. I am not sure whether the service will come from an existing player like PayPal or from a start-up of some sort, but I predict this will be the year that something interesting involving mobile devices and payments will make an impact this year. Aside from entertainment and messaging, there aren’t a lot of proven models for how to make money in the non-voice mobile world. Instead of trying to blaze new trails, people will start looking at where the money already is and find ways to make it more accessible in the context of mobility.

People will realize that home networking, in the context of digital entertainment, is a lot harder than originally imagined and very little progress will be made in this field. Aside from vendor-specific solutions (iPod + Airport Express, Tivo + Home Media Option, etc.), there will be no meaningful progress made in allowing consumers to connect the variety of devices that they use for entertainment purposes within the home. PC manufacturers will keep pushing media center PCs that people don’t seem to really want (albeit at more reasonable prices) and consumers will find the lack of cross vendor products to be a big impediment. Any lingering doubts as to whether 802.11 is up to the task will be squashed – vendors will find a way to make it work.

Web 2.0 will become a very polluted term as new companies with questionable business models try to piggyback off the success of early entrants in this space. Whether you want to call it Web 2.0, the read/write web, or whatever, 2005 will see a lot of interesting activity in this space. A lot of that activity will likely involve the acquisition or combination of the pioneers in this space. Consequently, there will be lots of companies out there marketing themselves as Web 2.0 companies regardless of whether it is an accurate moniker. As a result, someone will start writing articles about how it’s the new dotcom bubble.

Aside from open source, there will be very little interesting happening in the world of enterprise software. Security, automation, virtualization, and a handful of other markets will continue to show respectable growth. That being said, there will be no new blockbuster category of software introduced, overall spending on core applications will remain fairly subdued, and startups targeting small backoffice niches will thrive. The only interesting story will be the continued encroachment of open source software on the profitable franchises that application vendors (as opposed to infrastructure vendors) have developed.

The question of whether there is money to be made by blogging will become very uninteresting. Last year was the year that Big Media became fascinated with the power of blogs. People still wonder aloud whether there is any money to be made in blogging. Audience measurement tools will get better, emerging blog brands will become more powerful, infrastructure/tools providers will make good money by serving the growing blogging community, and more advertisers will experiment with blogs as an ad medium. Not every blog on the web exists to generate revenue for its owner nor does it need to for others in the ecosystem to make money.

Comments? You can always email me at blog @ charleshudson.net