Bob's 2021 tech predictions: What a difference a pandemic makes
This is when I typically generate a list of technology predictions for the coming year. The challenge this year isn’t coming up with predictions, it’s finding a moment of calm to share them when people are most likely to read. With a pandemic rolling along and the nation in political and economic crises to boot, such a moment of clarity isn’t likely to ever arrive, so I’ve decided just to write the damned columns and see what happens.
This is the column in which I’ll review my predictions from 2020 to see how I did and whether it is even worth your while to read further. Having done this for over 20 years, historically I’m correct abut 70 percent of the time, but this year could be a disappointment given that I’m pretty sure I didn’t predict 390,000 deaths and an economy in free-fall. We’ll just have to see whether I was vague enough to get a couple right.
The next five or six columns, will each cover a prediction for 2021. The last of these prediction columns will be an update on my Mineserver project that, but that will be 7-10 days from now. You’ll just have to wait for it, because that story is still in some flux.
Now to don my hair shirt and admit my mistakes.
I predicted that IBM would dump a big division and essentially remake itself as Red Hat, its Linux company. Well yes and no. IBM did announce a major restructuring, spinning-off Global Technology Services just as I predicted (score one for me) but it has all happened slowly because everything slows down during a pandemic. The resulting company won’t be called Red Hat (yet), but the rest of it was correct so I’m going to claim this one, not that anybody cares about IBM anymore.
I predicted that during his first impeachment trial government technocrats would turn on Trump. I didn’t go so far as to predict an outcome of the trial, so I cheated death with that one, but certainly the testimony of Fiona Hill, George Kent, Gordon Sondland, Bill Taylor, Alexander Vindman, Jennifer Williams, and Marie Yovanovitch showed the "deep state" was willing to speak on the record, though every one of those witnesses suffered for their candor. That seems like a lifetime ago, but I’m going to claim I was right.
My next prediction was that COVID-19 was going to be big, really big, in terms of economic impact. Remember I was writing this at a time when we were being told the U.S. Government was on top of the situation and that COVID was likely to "just disappear" when warm weather came in the spring. I doubted that, writing "…the impact of COVID-19 will likely dwarf that of SARS. Where SARS cost $54 billion, COVID-19 will likely cost at least $1 trillion before it is finished, which sounds like a lot but is actually relatively modest for a $90 trillion global economy. Expect a one percent cut in global GDP growth. There may not be a recession at all in the United States, because this is a Presidential election year and President Trump will likely do anything and everything he can to goose the economy to ensure his re-election. It’s going to get crazy. So there will be economic impacts, mitigated by extreme coping strategies that will, in turn, lead to further economic impacts after the election. If there isn’t a recession in 2020, there absolutely will be one in 2021."
Most of this prediction I got wrong, so I’m not claiming any of it. Depending on the study you read, US GDP dropped about five percent, not one percent, going clearly into recession. Global GDP dropped less, but still 2-3 times the one percent I predicted. And the total cost of the pandemic in the US is now estimated at $4.8 trillion over two years or at least 2.4-times the $1 trillion I said. My only solace in this is that most economists were even poorer guessers than me.
I predicted that COVID-19 was going to hurt tech startups: "Expect an over-sized response among startups to COVID-19. Almost no new venture investments will be made until the medical outcome is clear. But during that same time, A LOT of startups are going to go under -- more even than you might expect -- because they were going to die anyway and this is a great chance to blame that inevitable death on the pandemic. The good news in this is that failure is rarely punished in high tech, because if it were punished nobody would ever have a job or succeed. With their portfolios cleaned-up a bit, coming out the other side of this debacle the VCs will also have more money than ever to invest. But not this month and probably not until late summer."
According to research from the Brookings Institution, I got this trend right: "At the same time that business closures spiked in the spring, business formations lagged behind pre-crisis levels in the early months of the pandemic. More recently, business formations have begun to increase… By early June 2020 cumulative high-propensity business formations were 4.4 percent lower than they were at the same time in 2019; however, by mid-August there were actually 56 percent more new business applications than in mid-August 2019."
I predicted that working from home would accelerate a trend I identified as the end of IT, by which I meant the kind of business IT provided and maintained by kids from that office in the basement. By working from home, we’d all become our own IT guys and that would lead to acceleration in the transition of certain technologies, especially SD-WAN and Secure Access Service Edge (SASE). "SASE extends both the network and a security model end-to-end over any network including 4G or 5G wireless. Some folks will run their applications in their end device, whether it is a PC, phone, tablet, whatever, and some will run their applications in the same cloud as SASE, in which case everything will be that much faster and more secure. That’s the end-game if there is one -- everything in the cloud with your device strictly for input and output, painting screens compressed with HTML5. It’s the end of IT because your device will no longer contain anything, so it can be simply replaced via Amazon if it is damaged or lost, with the IT kid in the white shirt becoming an Uber driver (if any of those survive)."
It was a no-brainer, really, and I was correct: Internet-connected hardware sales surged, SASE took over whether you even knew it or not, and hardly any working from home was enabled by technology owned by the business, itself. It’s key here that the operant term for working from home became "Zooming" -- a third-party public brand built solely in the cloud.
Finally, I predicted that COVID-19 would accelerate the demise of not just traditional IT, but also IT contractors, because the more things that could be done in the cloud the less people would be required to do them. So what actually happened? Well I was right about the trend but wrong about the extent. IT consulting dropped in 2020 by about 19 percent, from $160 billion to $140 billion. That’s a huge impact, but I said "kill" and 19 percent isn’t even close to dead. So I was wrong.
That’s four out of six predictions correct or 66 percent -- four percent below my historical average. Given the chaos of 2020 I feel lucky to have not done even worse.