LAS VEGAS--Comdex this week wasn't the outsized event of the past with hundreds of thousands of attendees and lavish booths and wild parties. In part due to the economic bubble bursting and the global sobering of the IT industry, the legendary Comdex was smaller and focused more purely on enterprise IT. While vendor participation was weak, the keynote and conference programs provided useful fodder for IT professionals and industry wonks. Following are a few highlights from my visit.

The traditional kickoff was the Bill Gates keynote on Sunday evening. Gates started by showing a few slides from his first Comdex keynote 20 years ago. The message of those slides from the primeval days of modern software was consistency and predictability--you should be able to know and trust a program, and you shouldn't be surprised by the behavior of software. Twenty years later, we are still seeking more predictable, trustworthy (secure), reliable and user friendly software.

In Gates' appraisal, Microsoft is about halfway to the "no surprises" goal set two decades ago. Based on that calculation, developing software that works in an ideal way according to today's perceptions or even those of 20 years ago is about a 40-year quest. Therefore, we should expect to have secure, spam-free, seamless systems as well as commands more intuitive and user friendly than Control-Alt-Delete or Shift-NumLk by 2023.

It could be that I am underestimating what it takes to "build software for mere mortals," as Apple CEO Steve Jobs likes to say. If you look at the history of the automotive or telecommunications industries, the computing industry has achieved far more in a shorter time period. The tyranny of the installed base has slowed the pace of change, but with enough hardware power that problem could be overcome more easily. But the bigger challenges are creating more secure, user-friendly code and taking the cost and complexity out of creating the infrastructure required to serve billions of users.

Gates talked about how Microsoft is making progress along those frontiers, citing Systems Management Server 2003 and Internet Security and Acceleration Server 2004, but you can look forward to 20 more years of incremental upgrades that add new functionality, clean up older functionality, fix bugs and add new bugs.

By 2023, however, Windows, Unix, Linux, Mac OS and their descendants will be historical artifacts, supplanted by some other software or new paradigm for human computer interaction. Or, it may be that Microsoft is devising plans to introduce a completely new operating system (which will be announced 10 years before it ships), called Microsoft Dream that shapes itself to the whims or cerebral pulses of users in a "Matrix"-like environment.

Java Desktop
Sun CEO Scott McNealy used the keynote opportunity to "step above the noise and restate our relevance." That's a good idea considering the negative news and calls for McNealy's head by some financial analysts and pundits in recent weeks. McNealy highlighted the new AMD Opteron 64-bit systems that Sun plans to deliver and reiterated his belief in thin-client computing, touting the Sun Ray that can use a single-server processor to support 20 to 200 users.

But the most interesting news from his talk was the proposed technology licensing deal with China Standard Software Co. (CSSC), a consortium of companies supported by the Chinese government, to put the Java Desktop System on up to 1 million desktops in 2004. The Java Desktop consists of the Java-based Star Office 7 productivity software suite, a graphical user interface, the Mozilla Web browser and other programs, such as e-mail and instant messaging, running on Linux.

Sun's "per citizen" licensing of the Java Desktop is appealing to countries outside the United States looking for less costly solutions to Microsoft Windows. The China deal could be the first of many for Sun and other open source desktop providers such as Novell that causes Microsoft to rethink its pricing and code sharing policies. Whatever transpires, this is a case where customers, politicians, and lobbyists are going to have significantly more leverage than the vendors.

		Special Coverage Comdex gets down to business Complete coverage of the technology trade show

IT Matters?
In a panel led by Newsweek's Steven Levy, Nicolas Carr defended his assertion that IT doesn't matter. Carr reiterated his premise that information technology is becoming commoditized and standardized in a way that no longer gives a company competitive or first mover advantage that has lasting impact.

"IT management should, frankly, become boring," Carr wrote in his Harvard Business Review article entitled "IT Doesn't Matter." "The key to success, for the vast majority of companies, is no longer to seek advantage aggressively but to manage costs and risks meticulously."

Jeff Raikes, the group vice president in charge of Microsoft Office, said that Carr focused too much on the technology end of IT and not enough on the "I" in IT. The clever application of IT can yield information that leads to lower costs, incremental improvements or the opportunity for a breakthrough, Raikes said.
Several of the panelists pointed to Wal-Mart's application of radio frequency identification (RFID) tags as an example of IT that matters. Carr countered that Wal-Mart's objective is to make RFID a commodity. "By demanding that its biggest suppliers enable RFID by January 2005, Wal-Mart is making a RFID a commodity throughout the entire consumer product industry," Carr said. "As the scale leader, [Wal-Mart] stands to get the lion's share of the resulting productivity gains, and it puts the cost of experimentation and the risks onto its suppliers rather than itself."

Nonetheless, it's difficult to dispute the value of IT when it enables airline check-in kiosks, even if it's not a service differentiator over time. What's clear is that the more IT becomes commoditized, the more power shifts from the vendors to consumers, as in the case of the Java Desktop competing with Windows.

Siebel CRM On Demand
Applying the IT matters discussion to Siebel Systems, it could be said that CRM is undergoing commoditization that is causing the company to rethink its strategy. The latest CRM craze is hosted services that cost around $70 per month per user, and Siebel has jumped fully into the fray after salesforce.com and others have eaten into its market share.

Siebel Systems CEO Tom Siebel spent the majority of his keynote giving an unabashed and dull marketing pitch. Finally, he got to the demo showing off Siebel CRM OnDemand, the hosted CRM solution jointly developed with IBM aimed at the lower end of the mid-market and what Siebel termed casual users.

Siebel also elaborated on plans for the recently acquired UpShot, a hosted CRM solution that competes with salesforce.com and NetSuite at the lower end of the CRM market.

During a press conference, Siebel said that his goal is to combine the best from the just announced Siebel CRM OnDemand and UpShot into a new converged product that will use the OnDemand brand name and be available by summer of next year.

Siebel described the business requirements for CRM OnDemand--and business process outsourcing in general--as offering a subscription and perpetual licensing model; zero training; quick ROI; low TCO; support for geographically dispersed organizations; and immediate deployment. That sounds like a good selling proposition, and one that will create challenges for Siebel. At the other end of the spectrum Siebel has its on premise CRM solutions, which can cost in the millions of dollars, require training, carry a hefty yearly maintenance contract, and have a longer ROI cycle.

As a customer, you are going to start asking why you are spending millions per year instead of thousands, and find a CRM provider who can deliver the functionality and integration at a fraction of the traditional enterprise CRM solution cost. If you have to forgo some customization or wait until one of the upstart vendors delivers increased functionality and industry-specific features, you might be inclined to wean yourself off of the established on-premises solution over time.

Siebel said the CRM OnDemand product would be integratable with the on premise versions of its software, and that the company would provide an auto-migration feature from the hosted to the on-premises products. The integration and migration strategy will be useful to existing customers, and will potentially wreak havoc with Siebel's on premise business, which has been declining in license revenue over the last several quarters. But there is a big, untapped market. Siebel said that according to industry estimates, only 3 million users currently have CRM products and the potential market is 110 million. Hosted solutions will soak up the majority of those users in the next several years, and the same phenomenon will begin to occur in other software categories ripe for business process outsourcing.

You can write to me at dan.farber@cnet.com. If you're looking for my commentaries on other IT topics, check the archives.