Internet technology leaders

At the beginning of e-commerce, Wall Street Journal stuck its neck out and prophesised that the "four horseman" of the new generation would be Sun, Oracle, EMC and Cisco. It was a brave and interesting speculation, and in fact all have done well out of the Internet revolution, but they have also faded rather badly in the recent downturn of the economy. Not surprisingly then, despite significant moves from H-P, it is the old war horse, IBM, and their arch rival, Microsoft who are in fact managing rather better than the rest.

IBM of course maintain a healthy interest in the hardware, directly competing with Sun and EMC, as well as H-P ; they are also very involved in the service business, including consultancy (I often wonder which systems their consultants recommend). But it is the software that once again is proving the main battleground. Here IBM and Microsoft are in the driving seat, which is not the healthiest of situations because future directions should be directed by independent standards bodies and not commercial, self-interested companies. This however is the situation and we must live with it, although the Internet has succeeded in fostering some standards bodies which have been a bit more successful than those in the past. Paradoxically, a main reason for the success of some Web standards, mainly those supported by W3C, is that they are getting significant support from IBM and Microsoft, as well as most other commercial software suppliers.
Things have not changes that much however, the software companies still have only their own vested interests at heart, they still care nothing for the users needs, only what they can sell. In particular they are very skilled at marketing products that leave the door open to sell replacements and upgrades. In the past the IT industry was fragmented so that there was no commercial advantage to be gained from supporting standards. It was quite the inverse in fact, because if everyone used the same standards there would be little opportunity to trap the users into a specific family of products. In the past then the technique commonly adopted by suppliers was to support the standards of the day but to add "extensions", purportedly to improve the product, but in fact to give them that proprietary edge that traps the customer. SQL was the most notorious example.
The Internet has forced suppliers, including IBM and Microsoft, to take a fresh look. No longer are systems independent. There is a basic need for systems from various suppliers to interwork since companies are now inter-trading across the Net. The only solution is to support the new standards. They work with the standards bodies, both providing manpower and offering their own systems as draft future standards. But it isn't really that different, is it? It is all a clever juggling act. Now they are trying to get their own systems to the fore and it is only a matter of rethinking just how they will get the "following extensions" into place.
The best news is that there is at least some competition in the software industry again. Microsoft is on its own with the .NET architecture while IBM is exploiting the developments based around Java. In this sense IBM has more competition than Microsoft because there are significant players who are following the same route, Oracle for one and BEA for another, not to forget the architect of Java, Sun Microsystems.
There was a time when IBM was the biggest software company in the world, but they were comprehensively outmanoeuvred by Microsoft as the PC took off so that the upstart is now the biggest and the most profitable software company. While Microsoft's revenues come mainly from the desktop products, they have good income from the server and program development tool markets. If they were to go on making bigger inroads into the server market (Linux will stop that), then they would eventually take a share of IBM's main revenue source, large scale data centres. Thus IBM is making sure that they stay competitive in the Internet market in order to constrain any attack on their core software business from Microsoft. So far they are doing rather well, and the take over of Rational is a very positive move. But we must never forget that Microsoft won last time by superior marketing, not products. Will it be different this time?

 
Martin Healey, pioneer development Intel-based computers en c/s-architecture. Director of a number of IT specialist companies and an Emeritus Professor of the University of Wales.