Whats Hot in a Chilly Economy

By Darryl K. Taft  |  Posted 2008-10-06 Print this article Print

For his part, David Dennis, senior director of product marketing at GroundWork Open Source, said it will be more critical than ever for IT departments to show that costs related to "keeping the lights on," such as IT monitoring, systems management and infrastructure, are kept as lean as possible, thereby freeing up funds for IT-related activities more directly tied to revenue or bottom-line growth.

Black Duck's Levin said nearly every CEO he has spoken with over the last few weeks has come to these conclusions:

One, this economic and financial distress will continue on for the next two years or longer; two, credit will dry up; three, venture capital will become scarce for Series C and D, and ... the VC are going to let some firms go out of business; four, VC is available for Series A and B investments with very efficient capital utilization models; and five, hanging onto people will become a little easier but recruiting new personnel will become very difficult.

Levin also said he believes that IT budgets in non-Wall Street and related firms and non-credit-sensitive businesses will stay the same or decrease no more than 5 to 10 percent. However, in Wall Street and related firms or credit-sensitive businesses, "there will be significant cutback in the neighborhood of 25 to 35 percent, and possibly more over time," Levin said.

That analysis came from more than one source. Ronald Schmelzer, an analyst with ZapThink, agreed with Levin, noting that IT spending in both financial services and manufacturing will be down, but investment in government, energy and telecommunications IT "is hot right now."

And, looking at the question of what is a particularly hot technology right now, Bob Lozano, chief strategist and founder of agile and scalable application software provider Appistry, said he believes cloud computing will be a great equalizer.

"Everyone is to one degree or another playing on the same field, with the same handicaps ... so the enterprise that can figure out how to outmaneuver their foes will still win, just as they always do-and technology remains a great tool for winning those battles," Lozano said.

He added that he believes flexibility is the single largest benefit of the move to cloud computing. That includes "the flexibility to scale up or down and flexibility to diversify, even the flexibility to grow in small increments," he said. "This is true for both public and private clouds. Flexibility is the perfect antidote to uncertainty, and I think will ... drive the adoption of cloud computing during these times."

However, Lozano warned that "everyone wants to avoid any sense of lock-in, of unnecessary dependency on any one cloud provider." He suggested that Appistry is the perfect antidote to lock-in. "By choosing to cloud-enable applications with Appistry, an enterprise can ensure a consistent level of flexibility, scale and reliability across all cloud deployment options, both public and private," he said.

Still, despite the varied opinions of those who are or aren't involved in specialty, dynamic language or fancy Web framework development, the financial crisis is enough to scare the devil out of a lot of folks. Nobody has a crystal ball-certainly not myself. I simply wanted to present some of the thoughts of people I tend to run into on my beat because they give me something to think about. I was hoping others out there might join in.

What are your thoughts about the plight of developers in a down economy?

Darryl K. Taft covers the development tools and developer-related issues beat from his office in Baltimore. He has more than 10 years of experience in the business and is always looking for the next scoop. Taft is a member of the Association for Computing Machinery (ACM) and was named 'one of the most active middleware reporters in the world' by The Middleware Co. He also has his own card in the 'Who's Who in Enterprise Java' deck.

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