Last week, in a generous mood, I offered 10 things you shouldn't bother worrying about in 2015. But I couldn't leave it at that.
As much as I hate the word "disruption," when the existing order shakes up the way it has over the past year or so, something's gotta give. Maybe you depend on some of those things, maybe not -- either way it's time to fret.
1. Your second-tier PaaS provider going away
My friend Sacha Labourey’s startup Cloudbees recently announced it's leaving PaaS to focus on Jenkins. Cloudbees isn’t the first PaaS breakup, and it certainly won’t be the last, but Cloudbees was one of the good ones. I would expect more exits this year. As a result, more customers will be hugging trusted bellwethers like Amazon, Microsoft, and Google. It also means this is IBM’s year to make Bluemix and SoftLayer fly because companies want PaaS, but don't want to risk seeing their provider go bye-bye.
2. Overfunded startups
The Silicon Valley VC community is too small to promote real growth in this country, let alone the world. It's a model that lets a few people play the lottery of American business, but it fails more often than not. VCs look for a 10- to 40-fold return on investment when they sell a portfolio company, which means taking huge risks -- with the end goal of paying for failures when other bets don't pan out.
When I was part of JBoss, a startup that sold to Red Hat in 2006, JBoss had raised less than $40 million. It then sold for a bit shy of $400 million. Now look at today’s valuations.
I’ve no doubt that MongoDB and Hortonworks or Cloudera will offer IPOs or sell for a lot of money. But what about the next level? Are you telling me that all of those NoSQL vendors that have raised $100 million are going to be billion-dollar exits? There are some likely successes, such as Datastax (Cassandra), which may succeed due to great execution. But many exhibit worrisome signs: executive departures, key salespeople getting poached, and so on -- yet some have raised close to $200 million.
Fewer firms are getting funded these days, but those that get funding are netting larger amounts. How can that model work? VCs aren't any better at picking winners than before, so they're all going to be wrong together. Maybe it won’t be 2015, because it takes a while to burn through $100 million, but watch for big disasters. Sadly, this will cause a pullback. The same conservatism that 2009 caused will bring about the next VC Armageddon.
The old model of spreading the risk succeeded. The new model hinges on concentrating investments in a few plays you’re “very sure will win.” It's hard to see that working out well.
3. IBM's cloud plans
For two years in a row, I said not to worry about it. In fact, I noticed that IBM's cloud revenue seemed inflated before the SEC did. Today, there are finally signs of life, with SoftLayer expanding its footprint and Bluemix showing real promise. The company is advertising its cloud. It has up-front pricing. You can sign up without a fax machine. This is IBM’s year to make good on the cloud.
4. Microsoft Surface
Trying to be Apple, Google, Amazon, and everyone in between was Ballmer’s desperate move. Getting into the hardware business and launching lots of retail outlets seemed quixotic at best. I expect Surface to continue in 2015, but it will remain a disappointment, and a line reduction can be expected in 2016.
5. Another huge cracking scandal
In the tech industry, we try and find the world's cheapest developers, pair them with ineffective project/product management across the dateline, and buy a security product to put in front of the whole mess. Next we treat the inevitable crash or security breach as a strange act of god. Are we really shocked that anyone can put on a Guy Fawkes mask, do some elemental SQL injection or launch a little botnet, and bring our rickety structures to the ground?
6. The developer shortage
A continued shortage of developers is making technology more expensive for small-to-midsize companies. It also leads to increased reliance on “low-cost countries.” Until the developer shortage is under control, we’re headed for economic contortions. It's truly odd -- in an era where you’re virtually guaranteed a high-paying job -- that we can't lure enough people in developed countries into the field. This strange twist will also cause the industry to rely increasingly on less skilled workers. Even if you’re personally blessed with a high salary, this should be the “unknown unknown” that keeps you up at night.
7. Your Red Hat stock
Red Hat needs better execution. Now even investors know it.
On the one hand, selling support for an OS isn’t going to excite anyone in 2015. On the other hand, PaaS has proven to be a difficult business. Meanwhile, if you’re not excited about Linux or PaaS, you’re going to be even less excited about Red Hat’s growing portfolio of underfunded, half-baked Java offerings. (Full disclosure: I worked briefly for Red Hat after its acquisition of JBoss, the unit that produces most of the half-baked Java offerings.)
If PaaS isn’t the thing and JavaEE isn’t about to undergo a massive rebirth and we’re not all going to roll out massive Linux-based hardware deployments, how can Red Hat avoid stagnation? Frankly, without new management focused on creating products and services people want to buy, as well as rein in the bureaucracy and trim the fat, expect long-lingering pain and suffering in Red Hat’s shiny new office in Raleigh.
8. The Internet and the Fourth Amendment
For the most part, the Fourth Amendment is dead. The government needs a warrant or maybe a secret warrant from a secret court or maybe a convenient misunderstanding of the law in order to conduct illegal searches or surveillance. Then there's the “metadata” it collects on nearly everyone secretly, except maybe more than metadata is being recorded. If any firms collaborate with the government in ways that are illegal, they get retroactive immunity and the protection of an order not to disclose anything.
Until the bulk of the unwashed and uneducated masses actually start to care about Internet freedom and privacy, expect its continued erosion. I for one welcome our continued control by our corporate masters through their political puppets.
9. Leap seconds
June 30 will be the longest day of the year. It will last 86,401 seconds -- not the standard 86,400. How will you spend that extra second? More important, is all your software patched to do the right thing with that second? Also, since there is no standard way for software to handle the extra second, how will it all work together? It isn’t the first time (2012 was the last time), but I’d still hop to patching.
10. Your job, if your title can be anticipated by the Silicon Valley Job Title Generator
As successful companies roll out IPOs or get acquired, someone will start trying to trim the fat in order to create a successful business model and actually produce profits, which means you’re getting the axe. You'd better find a new startup looking for a “shareability guardian.”
To sum up: Migrate from your mom-and-pop PaaS to one of the big names, patch your leap seconds, change to a more serious job title, sell off all the RHT you’ve been holding. Remember, Big Brother is watching (along with the folks who hacked Big Brother) and don't forget to swap your Surface for a nice shiny Lenovo. Also, try not to panic. Did I miss anything?