Comments on Amazing Predictions from 30 Years Ago...

I have a decent collection of classic texts on Computer Science.  These include both books on the history of computers as well as some (well, maybe too many) textbooks from my academic career.  On a fairly regular basis, I take a book off the shelf to see what I can glean from previous wisdom.  In general, I am looking for those technical and business decisions that enabled the rise or fall of technologies and companies.  This time, I took “An Introduction to Operating Systems”, by Harvey M. Deitel, Revised Edition 1984, a book thirty years old.  A classic at the time, the book spends much of its time talking about operating system concepts and issues that most people, and even most newer Computer Science students, do not even know were at one time fundamental trades in the evolution of computer Operating Systems.  For example, how many people care or understand about allocation of memory in a multiprogramming environment with a fixed number of tasks and different memory partition as compared to variable memory partitions?

However, what is truly remarkable about the book is actually in the Introduction section “Future Trends”.  I am going to look at a selection and and make some modern-day comments as well as some comments on what we (or I) should have tracked for investment opportunities.

1. Computer hardware will continue to decline in price, while processor speeds increase, storage capacities increase, and the physical size of processors and memories decrease.  
• This trend was clearly obvious in 1984
• Back in 1984 the Intel 80386 was just about to be released which at 16 MHz provided about 5 MIPS of 32-bit processing.  Today a 2+GHz single core processor provides around two Billion Operations Per Second
• A 1GByte hard drive was around $50K.  Today, a 1 TByte disk is less than $100
• What took a room for a single mainframe or minicomputer of the day is now a room with hundreds of servers and thousands of cores (and, thousands of servers and hundreds of thousands of cores)
• See the next trend for investment comments
2. The “scale of integration” will continue to increase with VLSI moving to ULSI over the next decade.
• The 80386 had approximately 275,000 transistors
• Today, modern multi-core processors and Graphics Processing Units have several billion transistors
• Investment: The trend should have been to look at companies that were developing microprocessors that would sell in the millions in applications areas that were fantasies at the time.
3. Massive parallelism will become more common.  It will become possible to execute parallel programs with great speed because of the very high degree of concurrency.
• Today we have parallelism at many levels: multithreaded cores, multi-core sockets, multi-socket servers, GPUs with hundreds of processors, and machines with millions of cores.
• Take a look at the TOP500 supercomputers in the world and the massive problems set sides and complexity enabled by massive parallelism.
• Virtually every large commercial web service reflects a massively parallel execution of requests and data analysis.
• Investment: Companies that were developing novel technologies to incorporate dozens or hundreds of processors for applications, such as high-performance graphics, that would find themselves into workstations and consumer devices.  Software companies that were looking to orchestrate huge amounts of data.  For software, the interesting trend, is the proliferation of Open Source-based products, which enabled great capability in working with large data, but potentially dilute the revenue potential across multiple companies providing very similar products.
4. Computers and their operating systems will be designed to foster the operation of virtual machines.  Real machines will be hidden from the user.
• IBM invented the Virtual Machine concept that was embodied in their VM/370 system.  It wallowed for some time as something that was invisible to the larger computer industry, but with the proliferation of Virtual Machine systems for several different product lines (e.g., Intel, SPARC, z-series, etc.) virtual machines are even common on laptops.
• These systems are also enabled by the incorporation of specific capabilities into the processor set.
• Investment: Clearly VMWare comes to mind.  Today, you would have a nearly 100% return on investment if bought on its opening day in 2007.
5. The family concept of computers as first introduced in the IBM 360 series will endure.  Users will be able to run their applications on many different members of a family of computers, and these applications will see only virtual machines.
• For better or for worse, applications written for older versions of Microsoft Windows will run on newer version of Windows.  The same can be said of Android applications, and Apple iOS and Desktop operating systems (with some major bumps due to 68000 to PowerPC to x86 changes).
• More and more, the core services provided via the Web or in the corporate data center runs in Virtual Machines.
• Investment: This is the realization of the emergence of “ecosystem” economics.  Its about the breadth and sustainment of developers by enabling long-term stable platforms for users.  Microsoft, Apple, Google, Intel, and ARM are good examples.  Those that have not maintained a good ecosystem have generally struggled (e.g, Blackberry)  
6. As new generations of computers are introduced by the manufacturers, existing programs will run on the new equipment as is, or with nominal conversion effort.
• This is an amazing fact that user code written for Windows machines or under Linux operating system move virtually untouched as computers incorporate updated processors and other system improvements (e.g., RAM, storage, graphics acceleration, etc.)
• This is also true in the Apple iOS and Android worlds
• Investment: This is directly tied to the emergency of the major ecosystems
7. The cost of data communications will continue to decrease, and data transmission speeds will increase.
• Although a not rocket science production (technology makes things better and cost less), the typical approximately 1.5Mbps point-to-point circuit in the continental United States was around $10,000 per month in 1984 and a phone call (the equivalent of around 30Kbps, if you have the technology) was well over 10 cents per minute.
• Today, an Internet connection at home typically costs around $10 per Mbps (if you average upload and download speeds) and commercial rates for high-capacity links are less than one dollar a Mbps.  And, of course more than a simple private line, the Internet brings you a network around the world that touches on the order of a billion devices.
• Investment: Well, there was that telecom bubble, but if you bought Cisco stock at an equivalent of $0.04 in 1990 your return today would be over 62,000%.
8. Computers will be tied increasingly into networks, and work performed for a user may be done on a computer of which the user is unaware.  This will continue to emphasize the importance of the view of virtual machines.
• Can someone say “Cloud”.  This is clearly a homerun prediction.  Both in the fact that I am using Google Apps to write this document that uses a set of servers that I have absolutely no idea of what or where they are.
• Investment: This addresses both infrastructure capabilities and content.  Google, Amazon, Microsoft, Rackspace, and others.  Google return since its IPO is approximately 1200% (in 10 years).
9. Personal computers will be omnipresent.  Utilization of the resource will mean less than its availability, reliability, flexibility, and “user friendliness”.
• One of the prevailing problems before the 80s was the full utilization of expense centrally located mainframe-type computers.  The trend to multi-user minicomputers was well underway, and the personal computer revolution was getting started in earnest.  The Apple Mac was released in 1984 and “user friendliness” has been the key design element ever since.
• Desktops, Laptops, Tablets, and Mobile devices are the norm.  The goal is usability, and the fact that you don’t keep the four ARM cores in your tablet busy all the time is virtually no concern to anyone.  The fact that they are available when needed to ensure the near instantaneous responsiveness of the user interface or an application to make the user happy, is what it is all about.
• Investment: Clearly, if you follow the “user friendliness” as the primary factor, then all eyes should have been on Apple, the company that focused on the “Insanely Great” user experience.  From 1984 to today, this would have grossed a handy 2,300% return.