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Technology Buying Slump

mgcsinc writes "According to this Yahoo article from Reuters, IT buyers are continuing a trend of cutting costs, favoring utility over cutting-edge effect. Market researchers are estimating continuing doldrums in the industry and enterprise businesses see more 'bang for the buck' from making improvements in software as opposed to investing in new infrastructure. This is not necessarily awful, however, for those who hope businesses will start looking toward open source options as the cost effective alternatives..."

21 of 398 comments (clear)

  1. We're going all open-source by Anonymous Coward · · Score: 3, Interesting

    At my company we're going all open-source. We're using OpenLDAP, JBoss, and eventually we'll migrate from Oracle to MySQL.

    ac

  2. That Explains Alot by dirkdidit · · Score: 3, Interesting

    Well that would explain why at work I get a new 17" iMac instead of one of the new G5's. I knew my boss was cheap and thought I was worthless but I was only asking for a lousy $2,000 computer! It would also explain why I still use the keyboard I spilled soda on over a year ago, even though they supposedly ordered a new one last December.

  3. The right tools by BWJones · · Score: 5, Interesting

    IT buyers are continuing a trend of cutting costs, favoring utility over cutting-edge effect.

    This is the reason we are investing in OS X. In general to be productive, you use the tools that best help you to accomplish the job at hand. Yes, Linux and other open source solutions are often a part of this, but when one desktop system can replace several others including Wintel and traditional UNIX workstations such as SGI and Sun, all while running the same *NIX apps as before right along with productivity applications such as Photoshop and Office, it saves money and increases productivity, making it an easy decision.

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    1. Re:The right tools by krray · · Score: 5, Interesting

      This is exactly why we are doing the same. I did have to replace one IBM Thinkpad (Win2K) that was stolen recently. Putting 512M memory in it and a CD-RW drive along with a hard drive upgrade easily put it in the $2,300 - $2,500 range which was exactly what I paid a couple of years ago for the original.

      I now have about a 50/50 mix of OS X Powerbooks (about $2,600 in cost) and some Thinkpads, Dell's, and a few other personally purchased, but company supported laptops (TP's were what we supplied). I always seem to hear from the Windows users all the time with misc problems which usually resolve back to the OS screwing up somewhere again. The Mac users literally never call.

      I personally rolled Mac's out first to field guys who never really touched a computer before (no bias to fight). At the same time it was replacing home systems for the top management.

      Wait six months and watch the trickle down happen. The CEO, President, VP of Operations, etc -- all had no issue when as systems were depreciated (ANOTHER concept Microsoft seems to not understand :) they are being replaced with Mac's where it makes sense.

      Unfortunately I haven't come across the Linux or OS X based CAD application that can be seriously considered against AutoCAD. Ironically it's the engineering department that is drooling the most over the new G5's -- and as it stands right now will be the last to see them.

      Personally I go home to Linux in the basement (and BSD and Netware for testing work configs :) with the Mac used as my main desktop/GUI system. Heck, 99% of my Linux/BSD based work can easily be done through the terminal and most of the applications can be compiled/tested directly on OS X as needed.

      As soon as the economy allows and/or a server truly dies (3 years left to depreciate :) the next incoming server WILL be a X-Serve as it stands now. Currently I've never allowed/wanted/needed a Windows server with the core network being run on Netware with Linux and BSD being used more heavily recently. I never understood companies that got Windows servers when their Netware was running just fine. Personally I had one Netware 3.12 server that finally died last year sometime after running for over a DECADE non-stop 24/7 with really no issues other than dust.

      The only case where I can see using Windows and be more productive than on any other system is with CAD as mentioned. Otherwise it's OS.X hands down for now. I know the only why I'll pry the lowly G4 450Mhz Cube from my brothers hands will be with a G5. I personally started on that Cube and was my first Mac purchase to go after OS.X in the BETA time. Before that (OS 9 and prior) I had absolutely no interest in the Mac.

      I was running Linux at home. :)

    2. Re:The right tools by Perdo · · Score: 2, Interesting

      You are a Mac Zealot troll.

      You just can't say enough about your platform of choice.

      You have to put your little two cents into every article that is even vaguely a place where you can tout your platform.

      Consider: Linux on AMD.

      $500 systems instead of $3000, Office compatibility for $0 instead of $325, Photoshop work-a-like Gimp $0 instead of $600.

      8 PCs instead of 1 Mac.

      Yes, one desktop better replace several others, eight of them to be precise.

      I admit the gimp comparison is a bit thin, so leave the marketing and design departments on macs but do not even think of doleing them out to the rank and file.

      Initial costs get ugly fast otherwise. 100 employees is a $300,000 investment for the mac platform.

      Perhaps 15 employees absolutely must have macs. That's $45,000 for those 15 employees plus another $42,500 for every one else's (the other 85 people) computers.

      A smart business gets away for one third the cost of an all mac office, while the employees that absolutly must have macs, get them.

      Do you see how asinine your comment is, placed in that light?

      Especially when you say it's such an "easy decision".

      Scaled over a large corporation, the costs of "swiching" could easily amount to tens of millions of dollars more than a propper mixed platform solution.

      I can just see the CTO now, trying to explain why IT spending trippled.

      I would rather be the CTO that cut IT in half by getting away from Microsoft, while still providing a complete and reliable mixed package.

      --

      If voting were effective, it would be illegal by now.

  4. Optimisitic? by calebb · · Score: 5, Interesting

    "We have a common strategy. It's common, bulletproof infrastructure with standardized PCs, standardized networks and (security), standardized servers,"

    Isn't that what all IT coordinators desire? I think that this is another way of saying they are looking for a longer useful service life on computer systems (due to the slower economy & lack of necessity); Technology (processor, motherboard IO chipsets, storage, etc) is still changing just as quickly as it was in the 90's when we saw the change from MFM -> IDE -> EIDE drives, 8 bit -> 16 bit -> 32 bit buses, 12MHz ram -> 266MHz ram, etc ...
    however... I believe that if you take a last-generation system - a P4-1.5GHz for example - It is powerful enough to have a much longer useful service life than a 386sx-16MHz did back in the early 90's;
    i.e., in 2003, $50,000 will purchase many more last-generation PC's than it did in 1992 & they will remain useful equipment for a longer period of time due to the current level of technology.

    Then again, I could be living in a dreamworld & P4's could be obsolete to the point of uselessness in 3 years...

    1. Re:Optimisitic? by drinkypoo · · Score: 2, Interesting
      P4 is still current-generation for a desktop system regardless of clock rate. I think you meant P3. P3 is still quite capable of getting most work done. You don't need a high-power system if you're just doing office documents and web development.

      However, take a look at intel's timeline. The 386 came out in 1985. Arguably, it's the Pentium that finally put it to death - It didn't come out until 1993. The Pentium itself, and by this I mean the P54C, not the P55C (Pentium MMX) is still doing good work for quite a few people - people who are using Windows 98 of course, or Linux, but I'm concentrating on the mainstream. However, you could say that it was put to death in business by the Pentium III - in 1999. So the 386 had an eight year lifespan, and Pentium lasted only six.

      It looks to me like technology lifespans are actually shrinking. Of course, operating systems ARE changing more slowly, but applications are still growing rapidly. For instance, you could do meaningful work with Lightwave 3D's older versions on an Amiga with a 386 at 25MHz, but just running the GUI is something of a slowdown on (say) an Athlon 700 with a GF2MX card, let alone getting to the rendering part. Of course, it does a whole lot more now, which is my whole point. Windows XP might not be dramatically different or more CPU hungry than Windows NT 3.51 (try turning off a bunch of the new crap in XP, you'll see what I mean - mind you I leave all that crap turned on) but Office XP is insanely more resource-hungry than Office 97, let alone Microsoft Works 1.0 :)

      So if the current pattern is fit, the current generation of processors will be obsoleted within just a few years. But, we'll see what happens. There's always hope that we'll see a renaissance of optimization.

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  5. Re:Or Not by hendridm · · Score: 2, Interesting

    > Why replace MS software when you can just fire me and hire an Indian for $35k/yr?

    Why is this racist? Sounds like he's simply stating an observation. Now if he said "those smelly Indians who would back stab you the first chance they got", that would be racist.

    Calling that racist is like saying "The majority of inmates in U.S. pisons are African American" is a racist comment (assuming it's true, to which I have no idea and merely used it as an example). Even if it isn't true, I don't consider it racist - just an incorrect assessment or baseless statement.

    "Most serial killers are white!" I'M GUESS I'M RACIST!

  6. Fits what Nicholas G. Carr predicts in HBR by Anonymous Coward · · Score: 5, Interesting
    The article dovetails nicely with Nicholas Carr's Harvard Business Review article IT Doesn't Matter in which Carr states that:
    • IT is now infrastructure technology and a commodity item,
    • the cost of failing to maintain the IT infrastructure is extremely high (i.e., IT is a basic requirement of doing business; losing your IT infrastructure for even an hour may be very costly),
    • most companies in any given industry have the same IT, and thus
    • IT no longer confers any strategic advantage.


    Carr claims that for the above reasons:

    • IT should "be boring",
    • CIOs should *avoid* adopting the latest technology, since statistics show that early adoption confers no advantages,
    • CIOs should concentrate on minimizing risks instead.
  7. Re:News Flash by Jeff+DeMaagd · · Score: 3, Interesting

    I agree. The "tech boom" of the 1990's was a pretty sad piece of history, but thankfully it didn't create another Great Depression.

    It didn't help that Wall Street took these con jobs "hook, line and sinker". Everyone got too greedy, and there was too much pressure that what little resemblence of ethics that people had collapsed.

  8. Re:Mores law also is affecting buying decisions. by PierceLabs · · Score: 2, Interesting

    That's one really good thing that came/comes from the AMD Intel price war. They've so marginalized the price of CPUs that PCs have an insane amount of power for a mere pittance of price. Heck I could take a $100 bill and upgrade any of my boxes into the Athlon era (CPU, motherboard, and memory included) - then use that box as a competent server. Its almost scary that for a few thousand bucks you actually COULD build a decent server closet.

  9. Howto: Replace Commercial with Open source by TallEmu · · Score: 4, Interesting

    OK, so take the challenge. Which Open Source applications (client and server) can *really* be used in place of other expensive solutions.

    Remember, companies like their Outlook for Calendar, contacts and email - hooked up to an expensive Exchange box running on Win2k.

    Then we need a web server, say, Apache, but unfortunately the existing content may be written in ASP or Cold Fusion.

    Of course, this is probably all connected up to SQL Server or MSDE.

    What about backup utilities (remember boys and girls, there's still Windows on the desktop) and we need Antivirus too.

    Now, suppose that I am the manager of a company and I want to do all that, to SAVE me money, but I want everything I had before. Unreasonable? Nope, I am a typical customer.

    Question is, can it be done??

    1. Re:Howto: Replace Commercial with Open source by Some+Dumbass... · · Score: 2, Interesting

      Now, suppose that I am the manager of a company and I want to do all that, to SAVE me money, but I want everything I had before. Unreasonable? Nope, I am a typical customer.

      Question is, can it be done??


      I don't know enough about enterprise-level applications to properly answer your challenge, but I would like to make one point. There are two possible ways to interpret your challenge: as a Forced upgrade or as a Non-Forced upgrade.

      Consider a Non-Forced upgrade. Unless you're willing to accept significant downtime, any kind of software switch will involve a hardware switch as well. As the article suggests, few companies are willing to spend that kind of money anymore. "Minimize risk", "If it ain't broke, don't fix it", and so on. Add the cost of new hardware to the cost of the time spent switching, and I bet it would be near-impossible to save money. That's a very hard challenge. Note that it's just as hard for closed-source products as for open ones, though!

      On the other hand, what if you were Forced to change hardware? What if you actually need to upgrade, due to capacity issues, support issues (you're using NT4...), dead or truly obsolete hardware, or the like. Let's add up the cost of W2K Server, Exchange, IIS, AntiVirus, etc. and compare _that_ to the Open Source solution. This is a much easier challenge. If the software exists, I bet that this one can be achieved.

  10. Rumors by Billly+Gates · · Score: 2, Interesting

    Catia and pro-engineer may be doing a MacOSX port to panter next year.

    This info was from an Apple employee who posted here so take it with a grain of salt.

    The problem for the companies that make the products is ..
    a.)No X support.
    Apple talked to the Unix vendors and already has a beta version of X tuned just for the mac. It will be included by default to panther.

    b.)64-bit support.
    Most mathmatical packages have hard coded long long int in c/c++ for to handle large numbers and to obtain better decimal place precision. Most Linux/Windows ports are for AMD64 or Itanium. I think their is a 32-bit version of pro-engineer so I am not to sure. Panther and the new G5's solve this.

    c.) Performance
    The G4 sucks and no respectable engineering department would buy them when risc or lintel based solution would be faster and cheaper. Again the G5 solves this problem.

    D.)Market support
    The money is in Linux and Windows NOT APPLE. With IT not upgrading, what is the chance they will buy macs? What about training? Engineers mostly know Windows and some Unix. How do you know that customers might have a Windows only policy or a Unix/Windows policy when purchasing equipment. Apple may need to fund the porting so who knows. This may be the only problem that Apple may have to pay out of its own pocket. MS had to do this when NT was new.

  11. Re:Gosh, utility over cutting edge by deadsaijinx* · · Score: 2, Interesting

    But we aren't talking about your average american consumer whores. We are talking about supposed proffesionals in a proffesional environment, where utility and functionality should be far above the importance of the coolness factor.

    My first thought when I read the article summary was this: "And this is a bad thing because?..."

    Really, this is a GOOD sign.

    --
    YOU SUCK BALLS!
  12. Re:Mores law also is affecting buying decisions. by pi_rules · · Score: 4, Interesting
    The desktop == mainframe. They are no longer where the industry is and the embedded/pda/cell phone is the next IT revolution. They are still evolving and thats where I guess the new market is.


    Nah, it's another history-repeats-itself problem. We're going back to the thin-client environment. PC support costs are growing out of control and managing all the problems involved in deploying corporate apps on them are getting higher and higher. We're going to hit another thin-client connects to "mainframe" environment pretty quickly.

    Bandwidth across frame relays will become more and more neccessary and client machines will become more disposable. You'll get a base OS with your neccessary applications that are 'stock' on it anything special to that corp will be served up via a web-services type interface on a dumbed down client app or browser. No more pushing upgrades to systems -- you just update the logic at the backend and viola -- new app.

    Just like when you'd hook up to the IBM mainframe ala 3270 terminal emulation and enter your work into a COBOL app -- which was before my time. It's rather exciting to me, as I've been thinking thin client apps since I started programming seriously, circa 1998 :).
  13. Re:Play with fire and get burned. by drinkypoo · · Score: 2, Interesting
    I think it's more like they're not able to afford to get burned. It's like when you're down to ten bucks, you buy the dollar bread, not that oat-nut stuff you like, because it gets the job done; it holds your sandwich together, and it doesn't cost so damn much. This is just what open source needs, another push. Using FOSS in your project means that unless you have to do a lot of adaptation, things get considerably cheaper, and the savings are greater the more you sell. Oh sure, it makes it a little harder to avoid putting source effectively into the public domain as far as you're concerned, though most people have found a way around that by simply not integrating everything into the same kernel. If it costs $50 per unit to license a RTOS and it costs you $0 per unit to ship Linux you can spend $25 per unit on buying enough hardware to use rtlinux instead of VxWorks or WinCE (a more appropriately named product there never has been nor will be) and still sell your product more cheaply to bring in more sales, without losing any money yourself. (I'm not saying that Linux necessarily demands more hardware, though it may, and it does make things a lot easier if you have more hardware capabilities.)

    Of course, I'm not saying anything most people didn't already know, but /. is my favorite place to rant.

    --
    "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  14. Bucking the trend by Anonymous Coward · · Score: 5, Interesting

    I'm posting anonymously because I relate some obscure details of my company's network.... Our company is in the student loan financing business, and as the economy gets worse and more people return to school, we find a larger market to do business in. We're experiencing growth at a time when most companies aren't doing major upgrades and changing their network.

    This year alone, we're upgrading desktops for a department, rolling out another 150 new ones for a new department ongoing through December, upgrading our achingly old/slow NT 4.0 domain to a (hopefully) easier to maintain win2k3 domain, and replacing our aging nightmare AS/400 with a spiffy new linux application server delivering said app through a web-client written in java.

    This year, we hired another guy--an engineer, not a lackey--and we may hire a technician in September if our new team grows as rapidly as we anticipate. Plus, we're building a new data center and populating it with 75% new equipment. The company is quite profitable, and we've never been in better shape.

    Sure, there are companies cutting back, but some industries (like mine) are growing. Anybody else experiencing any kind of growth or major $ projects this year?

  15. Re:Hardware by ender81b · · Score: 2, Interesting

    Exactly true. A few years ago, around 1999, the upgrade cycle for the university I work for was 3 years. You got a new computer every 3 years, and that last year was a real bitch trying to get along.

    This year we switched to a 5 year upgrade cycle on most computers and a 6 year upgrade cycle on "low use" - i.e. secretary computers. It makes sense when you think about it. 5 years ago it was 1998 and the fastest chip out there was a 350mhz (iirc). Today, a 350mhz CPU will do just fine running office 2k, windows 2k, and email/browsing the web. It is even usuable with things like photoshop and dreamweaver (assuming you have about 256mb of ram). THe latest machines we buy are 2.8GHZ and I doubt that in 5 years even they will really need to be replaced.

    However, student public computers - bought for and by the students - we keep on a 3 year upgrade cycle if for no other reason than to impress incoming students with all the shiny flat panel monitors and 3GHZ processors with DVD/CDRW drives.In reality, they don't need that but they sure as heck like using them and like to think that their money goes to buying worthwhile equipment.

    I kindof like it, it involves a heck of alot less work and saves alot of time and energy in what used to be the annual summer hell months of trying to switch and change over 200 some computers.

  16. Insert witty comment here by Kris_J · · Score: 2, Interesting

    I order new computers when we have new positions or old ones fail. I upgrade computers when I have an option to make a signifcant performance (or function) increase without hitting one or more other bottlenecks too hard (RAM mostly, CPU possibly, video card theoretically). If the economy slows and no new positions are created, then PC spending slows approriately. If the economy picks up and new positions are created, new PCs are purchased. Why is this enough of a surprise to justify an article?

  17. Re:Gosh, utility over cutting edge by Lord_Dweomer · · Score: 2, Interesting
    "I don't know how you fellows make a decision, but when I go to the store to buy something, the coolness factor is always huge. For instance, buy the Cheerios that I know will satisfy my breakfast hunger, or go for the Chocolate Frosted Sugar Bombs, with the awesome toy? I will often go with the latter, even though I know better. (apologies to Calvin for stealing his cereal) The point I am getting to here is this: Americans have always, and will always, go with the shiny new "cool" object, even when they know better. This "slump" as with all slumps, is temporary. Americans, myself included, will come back to buy the product with the bells and whistles. I don't know how you fellows make a decision, but when I go to the store to buy something, the coolness factor is always huge. For instance, buy the Cheerios that I know will satisfy my breakfast hunger, or go for the Chocolate Frosted Sugar Bombs, with the awesome toy? I will often go with the latter, even though I know better. (apologies to Calvin for stealing his cereal) The point I am getting to here is this: Americans have always, and will always, go with the shiny new "cool" object, even when they know better. This "slump" as with all slumps, is temporary. Americans, myself included, will come back to buy the product with the bells and whistles."

    Well, YOU my friend are exactly the kind of consumer (notice I didn't say customer)that corporations want. You don't question the product, you just go with whatever is more shiny.

    Fortunately for the economy, businesses don't base their decisions on what solution is more shiny. They have cold hard numbers in front of them and they pick whatever gives them the most benefit at the cheapest price. So sorry, but what may work on sheep like you will not necessarily work on a competent business.

    --
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