Six (Mostly) Safe Tech Bets for 2006

Meanwhile, one in eight Web surfers is using Firefox, an open-source browser -- a figure that is sure to rise now that Dell (DELL Quote) is bundling it in its computers. And then there's rise in popularity of Wikipedia, an online encyclopedia whose user-generated content has barely been slowed by the recent controversy over the accuracy of some of its more arcane posts.

It's hard for investors to sink their teeth into open source as a trading play, because it often involves free software or content. But there are companies that will benefit, mostly those that have stopped fighting the open-source tidal wave. In addition to Red Hat, Motorola and IBM have learned to stop worrying and to build business models around this trend. If you like dark horse candidates, keep an eye on Sun Microsystems and Novell (NOVL Quote), which may just break out in 2006.

On-demand software will face tough tests, and its future will rest on the outcome.

It's highly unlikely that the service outage that struck Salesforce.com (CRM Quote) earlier this month -- the worst in its history, preventing nearly all its customers from logging in -- will be its last. The question is, what are Salesforce and the other up-and-coming on-demand software companies going to do about it?

Sure, some IT people would say their company's Oracle(ORCL Quote) ware experienced a service outage from the first day they installed it. But there was something very 1997 about Salesforce's outage -- as the Internet improved, we grew less tolerant of down time. Salesforce would do well to learn from eBay , which recovered from repeated outages in the late '90s to dominate online auctions. If not, blue-chip customers may back off the model for years.

Nanotech will underwhelm -- again.

Nanoscience may make some impressive breakthroughs, but it will need years to become a commercial product. That's good news for fly-by-night companies that have slapped a nano-label on their dodgy business model. The headlines will only rev up speculative investing in their stocks.

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There they are. I know -- they look, smell and walk just like predictions. But if you take them as such, just remember I make money from writing them down, not from investing in them. And amazingly, that thought never causes me to lose any sleep.