Prashant Shah, tireless organizer of typically excellent events at the Software and Services SIG of TiE Silicon Valley, and VC at Hummer Winblad encouraged me to blog my random notes of today's event featuring prominent valley venture capitalists, discussing "Top 10 Software Predictions for 2006". So here you are. As I didn't know I was going to blog this, these notes are likely one-sided in that I only wrote down what I thought was interesting from my own perspective. If somebody else blogged this, please drop me a note and I will link to you.

Participants in the discussion were:

• John Markoff, Senior Writer, New York Times (moderator)
• Yogen Dalal, Managing Director, Mayfield
• Gary Morgenthaler, General Partner, Morgenthaler Ventures
• Ann Winblad, Partner, Hummer Winblad Venture Partners

These notes are collected by speaker, not chronologically.

Ann Winblad

• Peer-to-peer and point-to-point is important.
• The applications market is USD 100 billion, but the top vendors are only USD 9 billion. We are still getting "frozen" applications. But what we need is not just SOA but composite applications.
• Observation: people are not talking about OSs or platforms any more. Instead, they are able to run on any device at any time in any economy. This changes all sorts of things.
• People can self-serve, create their own content, create their own computing environments: "everyone is a programmer". [note: that sounds a lot like Doc Searls' Do-it-yourself IT]
• "Magic of Microsoft" was: they reached massive numbers of users from individual to company, creating a positive spiral.
• But there is no "desktop" user any more, the hearts and minds of the "desktop" person have been captured by Google.
• Somebody should disrupt the carriers. Google?
• Recommends highly to visit QVC.com which does over USD billion in revenue. Example for the converged future of TC, PC, on-line and commerce.
• Now that technology has become a fashion item, "the market has finally met Apple." Steve Jobs is the only guy in this industry who understands fashion.
• For companies: do you change the economics of markets that are dysfunctional?

Gary Morgenthaler

• "hardware is frozen software"
• What we know as software is changing. [Established] enterprise software [product categories] is a stagnant a backwater: slow-moving, difficult to change, static category that is consolidating. It's not where innovation is happening.
• Microsoft is not in retreat, they are having their way in many markets. But there's plenty of room for innovation.
• VC has moved from enterprise-oriented to services on the internet, consumer-services. Consumers are 2/3 of economy. Consumer on the net means cheap or free. Not purchased. But free is not a problem because advertising is moving to the net and only a fraction of the advertising spend that could be there is there, so far.
• [I nominate this for the best quote of the evening]: "2006 will be the year of jihad for your living room." Movement from several directions: set-top boxes, X-box, Apple etc.
• Next-generation consumer products will not just be the walkman or MP3 player, but an integrated device/experience that connects to the internet, upgrades, connects to community, part of a broader offering. Apple iTunes / iPod is the example.
• We are in the next phase of (5th wave) of computing: 1) mainframe 2) mini computer 3) PC 4) internet. Next center of gravity is in your hand.
• Computing will be ubiquitous from car over cell phone, camcorder etc. which are being connected all the time using broadband. Also open source, comsumer-based, advertising-supported.
• "People are the ultimate content."

Yogen Dalal

• Microsoft is in great danger. Biggest competitor is Google.
• Google will become the biggest and most important software company that the valley has produced.
• Metaphor has changed from structured to unstructured. [Site note: several people on the panel said this repeatedly. I think this is either plain incorrect or a very sloppy use of language: on the web we are going from badly structured (HTML) to more structured (XHTML, RSS, Atom, and look at the ever-growing list of RSS extensions), not the other way round. I think what they mean is going away from an (exclusive) focus of data that is stored in a relational database to all sorts of other media; that only means a different kind of structure, not less structure.]
• Search is the new metaphor, not structure like folder hierarchies and desktops. That's a big paradigm shift.
• Most ripe today: mobile internet, entertainment
• user-generated content (because it is entertainment, that's why Myspace won)

What I quite liked about this event was that the panelists were fairly crisp in stating their views, not completely non-committal and "it all depends" as VCs sometimes are on panels. It was also interesting that the prevailing mood of chronic depression in the VC community seems to have shifted, even for software, at least for the people on the panel.

I got to ask the last question, which was: "So is there are 'there' in Web 2.0?" Yogen Dalal answered: "Web 2.0 is pretty much undefined at this point, it will be what you make it to be." Which pretty much summarizes the event: there's a brand new opportunity out there in software, which is very disruptive to software as we have known it so far, and these VCs seem to understand that. An event worth going to.

Just looked through the program. This is going to be an interesting conference ... thanks Surj for having me.