What follows are some random thoughts pulled from a recent email I composed. I thought they would make interesting blog content, but they may seem a little strange out of the context they were originally in.
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Ive said it before, and I will say it again the real tech-boom is coming. It will be bigger than the one in 1999/2000. Much bigger, and it will have one key differentiator: This time its for real. Its actually already started.. Theres been more VC money flowing into startups in 2005 than in 1998 and 1999 combined. Every time in the history of the modern world a life-changing technology reaches critical mass, theres an economic bubble, followed by a correction, followed shortly thereafter by a second, massive surge in the economy, which generally sustains itself permanently. The real leaders in the game are established during the SECOND bubble, not the first (Google, for example, was a nobody during the first boom they are now a 4 billion dollars market leader). Classic examples in U.S. history (although you can follow it all the way back through the 1500s) are the birth of the automobile during the roaring 20s, followed by the great depression, followed by a MASSIVE (and sustained) up-swing in the economy as the technology reached critical mass (there are dozens of examples of this happening in the past).
Internet adoption has finally reached "Critical-mass" (70%+ of American households have access to broadband internet). The internet is engrained into the lifestyle of the American consumer so deeply that most teens no longer feel they could function without it. Billions of dollars are being spent through the internet as legacy market-places are being re-defined and large retailers find themselves competing in a world they never thought possible -- head-to-head with mom & pop shops, battling for the best price. The internet, as dreamed of in 1999, is here. It's now time for the "second-phase" to emerge -- the one that will change the world, not just your lifestyle.
Its beginning now, and it will not be a bubble like the previous one, because the values will be real. Not based on potential, but on actual solutions and revenues. Unlike 1999 when all valuations were based on what companies MIGHT do to change the world, valuations in the next few years will be based on what companies ARE doing to change the world. Companies developing REAL solutions that solve REAL business problems in the new e-marketplace will be well-poised to be on the receiving end of the new string of acquisitions that's already begun (and will continue with great force for the next few years). As the big players in the market realize the shortcomings in their service portfolio's, they'll be scrambling to fill in the gaps. This time, however, the gaps they fill will be proven, revenue-generating, opportunities being filled with proven, recognized industry players.
So what are the key problems that need to be solved? Who will be the winning companies in the emerging market? I believe the most obvious category will be those that can deliver high-end, advanced business applications seamlessly over the web. (Salesforce.com has already proven the market exists for CRM -- I'd say it's a no-brainer to assume that even more complex applications will emerge in a subscription-based, hosted model, and they're going to give the major vendors like Oracle, Microsoft, SAP, and others a major run for their money as SMB's and Enterprises find they can all afford the same high-quality solutions). In 1999, the ASP model was all the rage because people assumed everyone would want their applications to be "hosted". What they didn't realize is that they didn't want their EXISTING applications to be hosted, they wanted NEW, better, more tighly integrated, and more entperprise-grade applications to be hosted. There was no point to pulling the application off the desktop if it was the same application being delivered remotely (just slower). No benefits were derived for the consumer of the product.
Now, 6 years later, The emergence of cost-effective enterprise class software will have an interesting impact on the ability of small businesses to compete on a global economics scale with the big-boys of today. Suddenly the ability to dump hundreds of millions of dollars into tools like sales force automation, supply-chain management, predictive ordering, and more will no longer be a factor as small businesses will have access to the very same technology.
6 years later, with emerging technologies such as AJAX, web-based applications are quickly becoming indistinguishable from normal desktop applications, and those creating the applications that will handle the needs of the consumers, SMB's, and enterprises from a single delivery platform with a unified, shared database will emerge as the dominate players in the new market. Vendors who continue to operate under the legacy-model of software development, delivery, and payment will lose ground rapidly over the next 2 to 3 years as people shift towards more integrated, highly-available, enterprise grade solutions at price points that make existing solutions extremely difficult to justify.
Brace yourself. The internet finally has traction, and it's a steam-roller in overdrive. It's time for it to change the world.