Did you notice that the cost of Y2K remediation failed to crush our economy?

Why anyone thought it would is mystifying. Two years ago I predicted the economic non-impact of Y2K, because its major economic impact was a transfer of wealth … mostly from corporate coffers to individual middle-class computer programmers … not the elimination of wealth from our economy.

The absence of a Y2K-like crisis, in contrast, may cause real problems. Why? Money moving from the wealthy into the middle class is healthy, not detrimental, to the economy. If IT spending slows down, less of that will happen. In the bargain the IT labor shortage will ease (and programmer unemployment will rise) as corporations, overwhelmed with their usual sentimentality, wave goodbye to the hardworking employees who got them through.

We’ll see if it happens that way this year.

Since we’re updating past predictions, let’s talk about Java. Microsoft tried to “help” me on my prediction that proprietary extensions would diminish Java’s “write once/run anywhere” promise by adding Windows-specific features to its version, but the courts sided with Sun. So here’s a replacement prediction: Despite Sun’s current recalcitrance, within two years, its partners will no longer accept its hegemony. Either Sun will turn Java over to a standards body or its partners will de-emphasize Java in their strategies.

It will matter less and less, though, because my other prediction about Java … that it will become just another programming language, disappointing its most vocal advocates … is on track. Both Lotus and Corel have abandoned their attempts to market Java-based office suites. No vendors have released successful large, Java-based business applications, either. The best we’ve seen are systems that use Java in the mid-tier and to enhance browser-based functionality in the user interface.

Updated prediction: Java will find a niche as the mid-tier language of choice in n-tier OO/client/server development projects, although its performance deficiencies compared to compiled languages will continue to constrain its value.

Java will continue to be useful in extending browser-based interfaces. Here’s a long-shot: unexpected competition from Macromedia, which has been adding functionality to Flash and Shockwave and recognizes (in 2001?) that adding forms with database and transaction connectivity is a logical addition to its feature set.

Whatever else, happens, Java will not become what COBOL once was — the dominant tool for developing business applications in mainstream IS.

If Java will be disappointing except in the mid-tier, how about its companion mid-tier technology, XML?

XML, which is basically a pragmatic version of SGML, will increase in importance. It didn’t take a lot of courage to predict XML’s success last February so I’m not claiming credit for prognostication. Most technologies that receive as much hype as XML end up disappointing their promoters, though. XML won’t.

Except for this: Among XML’s advocates are naifs who expect it to be a sort of technological Esperanto, except that people will actually use XML. In other words, there are those who expect XML to be a universal language where everyone who speaks it can communicate with everyone else who speaks it.

It isn’t. Language requires syntax, vocabulary, and semantics. XML only defines syntax. For each context in which XML holds promise, market leaders will define specialized XML vocabularies. These efforts will be most successful in creating a replacement to both HTML and proprietary file formats, merging these two art forms into one, standard way of representing documents.

While XML also will succeed as the language of choice for defining metadata, the nature of its success will come as a disappointment for many eBusiness evangelists. The hard work of mapping internal data structures to each specialized industry or supply-chain XML vocabulary will be subject to the same semantic difficulties that have plagued Electronic Data Interchange since its early EDIFACT/ANSI X.10 days: Even when two companies use identical tags to label data fields, the meaning each assigns to a tag may be subtly different, simply because the two companies think about things differently.

That’s to be expected. Human knowledge is messy. Its representation … in XML, English, or Urdu … will, of necessity, be messy, too.

Road and Track used to define “sports car” as a vehicle with nothing in it that doesn’t make it go faster.

That’s the problem with Microsoft Windows. But I’m getting ahead of myself.

This is the Product of the Year issue, so in addition to reviewing and updating a past prediction, we’ll give an award, too. The prediction, first made two years ago and updated last year, is Microsoft’s coming retrenchment. No, we aren’t ready to talk about sports cars just yet. That would be about products and technology. Microsoft’s technical problems are merely symptoms.

Two years ago I pointed out that Microsoft was fighting wars on too many fronts. Napoleon and Hitler both lost their empires through this mistake, and Bill Gates, while no slouch when it comes to battlefield tactics either, is fighting on many more fronts than either of the aforementioned megalomaniacs.

The result: An inability to win anywhere. Windows 2000 is shipping way late and to unprecedented apathy for a Microsoft release. It fails to replace Windows 9x as planned, nor does anyone seem to care about the next version of this lineage, either. The Macintosh, left for dead not long ago, is gaining ground in both marketshare and mindshare as a desirable desktop OS, and Windows CE is in such bad shape that Microsoft has dropped the CE name altogether … the new brand is “Windows-powered”, which will only tick off the handful of people who buy the silly things. Even Psion has more PDA mindshare.

Meanwhile, Microsoft’s most important leading indicators are dismal. The critical Active Directory isn’t getting much ink, for example. Failure to generate press coverage would have been unthinkable this close to any previous Microsoft release date. Worse, much of the coverage Active Directory does get compares it unfavorably to Novell’s far superior and more mature NDS.

Then there’s Linux. Nothing about Linux should have led to corporate success. Despite its low price and technical excellence, Linux’s open-source business model was baffling to corporate IS decision-makers, and bemusement doesn’t lead to sales. Only NT’s chronic instability could have achieved success for Linux. Now Pandora’s Box, in the form of a Linux-led dissipation of corporate IS’s longstanding fear of UNIX, is wide open.

Worst of all, though, is Microsoft’s corporate satisfaction rating, which has dropped from a high of over 75% to recently reported levels approaching 40%.

Not a good sign.

Not that Microsoft deserves sympathy. Its coming implosion is self-inflicted and richly deserved. As huge, wealthy, and influential as it is, it has no excuse for its products’ poor construction. And when the most significant innovations it can call its own specify and render fonts, something is seriously wrong. (We’re still not quite ready for sports cars, but we’re close.)

Microsoft’s basic problem is strategic, not technological. Its core strategy is to control architecture. Unfortunately for Microsoft, the Internet has expanded the architectural landscape exponentially. Rather than carve out a defendable territory, Microsoft has demonstrated a compulsion to announce a strategy for each and every new buzzword that comes along.

It should have stuck to what it knows: The desktop and small systems. Instead, it tried to turn Windows into something it isn’t — everything.

Now we’re ready for sports cars. Novell embraced the Road and Track principle back when it first released Netware — it took out everything that didn’t make file and print services run faster. Microsoft, in contrast, tried to use one code base to run desktops, file-and-print services, database management, application services, and batch processing. It’s as silly as building a vehicle to serve as race car, truck, airplane, locomotive, and combat vehicle. It’s why an Internet browser is now integral to a server operating system — the embodiment of pointlessness.

Microsoft has oversold its products so excessively that it’s credibility is lost, and the results will be excruciating. Look for the first public symptoms later this year: More reorganizations, staff departures, statements about “focusing on core competencies” … and, from The IS Survival Guide, Dirty Harry’s A-Man’s-Got-To-Know-His-Limitations Award, for messing up a stupendous opportunity to do things differently and better.

In 2000, Microsoft’s implosion will begin.