For the past 14 years at the AICPA microcomputer conference, Dana (Rick) Richardson has discussed trends in technology and then gone on the record to predict what changes--technological and organizational--lay ahead for the next year that would impact the accounting profession. His presentation has become a feature of the annual conference, and Richardson uses the latest technology available in his talk to make sure no one gets bored or falls asleep. This year in June, his multimedia presentation included the use of a Kodak Photo CD and some very nifty and creative titling and captioning.

The CPA Journal feels that readers will find Richardson's analyses and predictions both fascinating and informative. Not every professional can expect to attain the level of knowledge that Richardson displays in his very relaxed and conversational style. But every professional must attain an awareness level that allows for discussion of computer technology with clients and others and decisions on how that technology will be used in meeting the challenges of conducting a successful practice or other business activity.

Richardson begins his remarks before the June 1994 conference by grading his predictions from last year.

My score card shows three great guesses, three good or partially good guesses, and one outright miss. I was on the mark in predicting the arrival of portable, speaker-independent, voice-recognition systems this year. They showed up on at least two new platforms, Compaq and Macintosh. Second, wireless networks became much more important. In the past year some 300,000 new local networks operating on a wireless basis were put in place. And third, I said Apple Computer would introduce a 486 chip machine, which it did. It did not last long, but it was out there.

On the partials, I predicted Microsoft would introduce a new personal digital assistant (PDA) with a new operating system, perhaps in cooperation with Compaq. Compaq has announced that it has a new PDA product, which is not yet ready for release.

Intel has a hardware product that integrates phones and computers. It is a controller for your phone that works with the cable converter box on top of the television set. That may not be exactly what I had in mind when I made my prediction, but it's close.

I predicted Windows 4.0 would be shipped leaving DOS in the dust. Well DOS has been left in the dust by Windows 3.1, so I will give myself half credit even though Windows 4.0 has yet to arrive.

I missed on my prediction that the first speaker-independent, continuous-speech server would be released. By continuous speech, I mean the speech server recognizes human speech without the speaker having to enunciate words in a clipped, computer-like fashion. We won't see a solution to recognition of more natural speech until there is more horsepower under the computer hood.

Developing Trends

In this year's speech, I am using a Photo CD from Kodak to present the trends I see beginning to emerge:

* The pace of change in computer technology will be greater in the next three years than it has been in the last 30. If we stand by and don't keep current, change will take over and leave us floundering in its dust.

* "Big is best" no longer applies. Smaller, more agile and nimble companies will be the most successful. The behemoths will not be able to adjust to the pace of change. They will try, by decentralizing management and divisionalizing, but it won't work.

* Those entering the work force can expect six complete career changes over their working lives. Entrants do not view "work" in the same manner as in the past. And employers and their present policies are not helping. This presents a major challenge to managers who seek to develop a stable, loyal work force.

* The microcomputer equipment market is solidifying around quality within a competitive pricing framework. The result is the top three manufacturers have recently increased their combined market share.

* The Photo CD player has arrived on the scene and will revolutionize multimedia presentations. Kodak's version allows you to put up to one hundred photographic images on a CD, with five different resolutions. You can plug it into the TV or operate through a portable device. It is easy to use, terribly easy to master, not expensive--the unit I am using for this presentation is only around $300--and very portable. It can include sound. The three products you need to create a Photo CD are Create It, Arrange It, and Build It. The first two products mn on a Mac or PC, the output of which is entered into the third program on a UNIX workstation. Three hundred Sir Speedy quick print locations have the workstation and the software to do the third step, the output of which is a CD master.

* Recordable CDs are here in the form of the Sony Mini Disc. These disks are rewritable one million times, store 140 megabytes of data, are removable, and cost only eight dollars.

Surfing on the Internet

The number of Internet users is now about 12.5 million. Internet literacy is becoming more and more important. Subscribing to an appropriate magazine can help. Two come to mind. One is Wired and the other is Mondo.

I am now going to take you on a journey on the Internet. I am using the software Mosaic, which transforms the rather plain and sometimes confusing world of Internet into a more graphical, user-friendly format. It is a little slow, but it's worth the wait. It is a product developed at the University of Illinois, at Urbana-Champagne. It runs on X Windows for any UNIX system, Microsoft Windows for any Intel system, and the Macintosh. We begin on the World Wide Webb (WWW). There is a menu bar and graphics to help us move to the level we are seeking to reach. From the list of all the databases on the WWW, we choose the United States. "Community," "cultural gender issues"-- we are getting close. Here it is. First we click on the U.S., then on to California, then the city of Palo Alto. City profile, demographics, maps, restaurants. My favorite restaurant is Madalena's. Let's go there. Here's the lunch menu, the hours, parking information, and the fax number to make reservations.

I have one caveat: it can take a while to get on the 'Net. But you can see the wealth of information. And with Mosaic it is user friendly. There is other software as well, Gopher, to name one.

The Importance of Compression

One of the biggest issues facing computing and communications is compression. We are running out of capacity (or bandwidth in technical terms) on most networks. In essence, no matter how fast the computers are at each node of a given network, there is only a finite amount of data that can be transmitted across the lines. Compression will allow us to send much more data over the same network.

Much has already been done to compress traditional data, but much remains with the new multimedia data types, such as stereo sound, still images and video. Several companies have developed or are developing solutions. They involve breaking a picture down into small squares, digitizing them into smaller pixels, and saving them to disk. There is a loss in clarity of the picture in this process when the image is decompressed and displayed. But with video at 30 frames per second, it is not always noticeable.

A new approach to compressing images, called fractal compression, recognizes that images in nature are built from fractal patterns. So why can't we store groups of fractals as instructions in digital form, taking up significantly less space? Fractal compression will be used for video on demand and other major distribution applications. Fractal compression however takes much longer to compress than it does to decompress. Blockbuster Video could use a large mainframe computer to compress Gone With the Wind the first time. But then it would be available on a video server on demand.

Using Agents to Communicate and Operate

General Magic is a company that has developed an innovative approach to network communications. Independent programs, called agents, are developed to roam a network and perform services or tasks for their owners. Some prior speakers have discussed how an agent could purchase tickets to a Broadway show, first making the reservations and then actually paying for the tickets. But an agent can do more than that. An agent can first search the newspaper reviews to find the best show, go to a ticket issuing service and find the best seats available, contact your significant other to see if he or she is available, book the seats, and pay for them.

As these programs are being developed, there are rules and good practices that must be followed:

1. Programs should be encrypted so that they can be interpreted by only those with a need to know.

2. Agents should carry identity papers so that it is known who sent them.

3. Agents should come with ability permits that allow them a prescribed time in a particular database or otherwise limit what they can do.

4. The agents should be given a certain amount of digital money to spend, called "tele clicks," so that they do not drain resources on a network.

Enabling Technologies

I would like to talk about four enabling technologies that will move us forward in the next few years.

Collaboration. Collaboration describes how people work together. It's more than the transaction-based features of Lotus Notes. Microsoft is putting together a "touchdown" group, with six or seven players. On the team are Collabra, Isocore, with electronic data interchange, Mustang, Reach, and Watermark in the image field. Microsoft is working on its product to pull the team together.

Important to the issue of collaboration is a mini war going on in the area of object orientation. Object orientation has to do with the ability of software developers to write programs for particular platforms. The industry is seeking to develop standards and uniformity for new program development. The war is being fought between Microsoft and everybody else. Everyone else is committed to OpenDoc as the standard, whereas Microsoft is sticking to its own OLE 2.

Miniaturization. CPI in the world of computer chips stands for chip performance index. It measures how quick and how small a chip can be. It is important in measuring the extent to which chips can continue to be miniaturized. In the last 30 years we have reduced see by 13 orders of magnitude. To give you an indication of what that is, if the size of one of today's miniaturized electronics was one meter in length, it means the starting point some 30 years ago would have been a distance of a quadrillion miles away, a point outside our galaxy.

There is a point at which we will no longer be able to continue to miniaturize electronic components. Perhaps we have three or four orders of magnitude left. Still quite a bit. We go about two orders of magnitude every eight years. By the year 2010 we won't be able to make the components any smaller. What are we going to do? We will have to switch from electrons to photons, a unit of measure of light. In other words, we will move from electronics to light. At that point we will reset the reduction clock and have another 18 orders of magnitude in further reducing the size of computer components.

Visuality. Multimedia is fantastic, but it falls short if it is not interactive. A modification of an old Chinese proverb would go like this: Tell me and I will forget, show me and I will remember, but involve me and I will understand. That is the attraction of interactive video. A step in this direction is AT&T's integration of its voice- mail and E-mail products in its new offering Intuity.

Another product is Time Capsule from Vivacious Entertainment for the CNN network. This is a CD that captures the 100 defining moments of 1993 in pictures and sound. The cost is $33. I gave a copy to each of my kids, just as we used to get updates to our encyclopedias.

Visual presentations are carrying over to financial reporting. Last year we had a portion of McDonalds' annual report on a video. This year we have a video of Blockbuster Video's annual meeting and its financials. In connection with the video, I want auditors in the audience to think about how we can give assurances to viewers of the video about management's assertions that are being made in the financial area. Many shareholders never read the glossy annual reports; they will watch the videos though.

Another item in the visual area to watch for is Prodigy TV as a cable channel. It will come out in a similar fashion to the service now available for PCs. It will include the first interactive TV Guide. It will rely on digital photos for its graphics. It will have news overlays that can be displayed no matter what channel has been selected. It will operate as an interactive gateway as well. For example, while watching a sporting event, you will be able to pull up statistics on the teams or even interact with a friend many miles from you about what play is about to be called on Monday Night Football. Look for this service within a year or two.

Portability. Products are being developed to compete with Newton in the PDA market. Motorola and General Magic are coming out with Envoy, a true communicator with three interfaces. It has two modems. But it costs $1,500.

Newton brought out a second unit that does much better at handwriting recognition. Its developers are also realizing handwriting isn't everything. Look for the devices to begin to offer intelligent assistance. For example, if you enter "lunch next Tuesday with Jan," the unit will know that's next Tuesday July 5th, and it will look up in your database who Jan is. It will be two or three years before the market is really ready for PDAs.

And I think speech recognition may end up beating handwriting. By the year 2000, I believe every computer sold will have voice-recognition capability, as will most homes and automobiles that we buy.

Portable power packs that sit under your laptop are now available for long-distance travelers. Unfortunately there is no universal power pack because of the variability among manufacturers as to how portables are powered. You get six to eight hours of power. It's added weight--one to four pounds. But it charges overnight.

Rick's Annual Forecast

Here are my predictions for the next year.

Companies.

* Microsoft and AT&T will do a deal this year in the consumer space, and it will

be big.

* IBM will take over the manufacturing of Power Macs from Apple.

* Apple will license the manufacture of Macs to at least one other company.

* Compaq will be the number two market share computer manufacturer in 18 months and number one in portables. This has already happened.

* Sony's removable Mini Disc will become the standard removable media for portables in 18 months.

* PCI bus architectures will displace the existing architectures and will create the potential for greater use of networks.

* The Kodak Photo CD will become an industry standard.

Software.

* Windows 4.0 will not ship until the first quarter of 1995.

* Collabra Share will become a competitor to Lotus Notes in the low- end, bulletin board market.

* New compression software will allow the use of genetic programming techniques. Genetic techniques allow one computer to compare its contents with another to make the transfer of data between the two very efficient.

* Desktop video will replace desktop publishing as the hottest vertical niche software market.

As you can judge from my remarks, I expect a great deal to happen in the immediate future.

WHERE TO GET FURTHER INFORMATION

INTERNET SERVICES

Delphi Full access to the Internet (800) 695-4005 E-mail: info

Global Net Navigator Front-end to the Internet (707) 829-0515 E-mail: info

Quarterdeck Office Systems Mosaic licensee (310) 392-9851

SUBSCRIPTIONS

Wired

1-year subscription: $39.95 Subscription Fulfillment PO Box 19186 San Francisco CA 94119-9866 FAX: (415) 904-0669 E-mail: subscriptions

Morph's Outpost

1-year subscription (800) GO-MORPH (466-6774) E-mail: info

PRODUCTS

CNN Time Capsule CD $33.90 Vicarious Entertainment (800) 619-4200

VENDOR PUBLICATIONS

Sprint Trends Nancy E. Hicks, Editor Business Market Group Mail stop GAATLN0902 3100 Cumberland Circle Atlanta GA 30339

AT&T Technology 1-year subscription $40 Circulation Manager Room 3C- 430A P.O. Box 636 Murray Hill NJ 07974-0636

Dana (Rick) Richardson, CPA, is president of Richardson Media & Technologies, a multimedia and strategic technology consulting company. Prior to forming his current company, Richardson was the National Director of Technology for Ernst & Young.

Richardson is co-author of A Manager's Guide to Computer Timesharing, published by Wiley Inter-Science, and Audit and Control of Information Systems, published by South-Western Publishing.

Richardson has served on many professional committees for the AICPA, the American Accounting Association, and various state CPA societies.