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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..."
Who would've guessed? Picking something that works over something that makes you say "Cool."
The party is over. What we now consider "doldrums" are here to stay. It's the new normal. Do you ever think businesses will return to extravagant spending?
Even when the economy heats up again (let it come soon!), people will point to the late 90s dot coms as the prime example of why they should not spend money on equipment that provides no immediate ROI.
At my company we're going all open-source. We're using OpenLDAP, JBoss, and eventually we'll migrate from Oracle to MySQL.
ac
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.
Maybe this is because companys have been burned enough times by "upgrades" that only cause downtime and break other apps?
TODO: Something witty here...
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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Would be nice but I very much doubt it. This sort of attitude only hurts the more specialised, cutting edge companies. The already established, "reliable" places like MS will only gain from this, I'd guess, as people become less and less likely to "take a chance" on less well known products. (been like that for a while though hasn't it?)
Well for small companys that provide quality, truely inovative products that solve REAL problems. The CA's and Peoplesofts that ship a product that require 2-3 years of independant consultants to get 'right' will be ancient history.
One could make the leap to believe that this means companies will embrace free, open source! software. Maybe. Or one could look deeper and see that companies are looking to standardize - something that open source software doesn't seem to doing.
There may be places in businesses that open source software will be able to make good progress in - I hope so - but it reads like IT managers are looking to the old standards (IBM, Microsoft, SAP, etc.) for the near-term fixes that they need and any new, whizbang ideas (e.g. wi-fi) will be met with strong resistance...
"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...
No, seriously. Gamers aside, the average home or office user can get by just fine with technology from 2+ years ago. I have a p3-800 at work as do my 30 odd users and for email, web browsing, mp3s, terminals, etc it handles the work just fine. Sure a newer system would be nice but its impossible to justify the cost when things purr along smoothly as is.
I think the same applies for servers to a lesser extent. Unless you're anticipating a heavy load chances are good the job will get done fine with a box rustled out of the closet.
Unless the fundamental ways in which we interface with the computer change then the non-power user will have longer and longer periods between upgrades.
CommentBot 0.7a running with args "-module irritate,disagree -target random"
Why replace MS software when you can just fire me and hire an Indian for $35k/yr?
Oh wait... THEY ALREADY DID THAT
Slightly offtopic, but wouldn't we (the people working in the US) benefit from having a weaker dollar? If $1 = 60 yen, then wouldn't we be competive with the rest of the world? (which hopefully will stop all this outsourcing)
Of course, foreign goods would cost more too...
Most computer parts are good for about 5 years tops... if everything was replaced in late 1999, what's gonna happen in 2004?
I think we are getting to a point where hardware is "ahead of it's time." That is, when I was doing design work on Adobe Photoshop 5, I had a 266 MHZ PII and I remember thinking: This is all the computing power I will ever need (which is something I'm sure most of us said, accept Bill Gates, who apparently never that ;). Well, 6 years later, we have 3 GHz processors, and I wonder how long it will take business type applications to tax those processors like Office 2K with Windows XP taxes my old 266. It's the poor performance with later versions of Photoshop, etc, that convinced me to upgrade my system four years ago.
Basically, the buying slump (hardware wise) might be because everyone's hardware does what they want at a good speed with plenty room to spare. If corperations want hardware sales to go up, they'll have to wait for more complex programs (or more wildly inefficient --a.k.a. poorly programmed -- programs) to come out. And Longhorn is right around the corner, coincidentally enough.
In the late 1980's during the last recession, IT purchasers began to view computers as commidities like today. Some even questioned the increase of productivity of a pc compared to a typewriter. Instead of buying 386 and 486 systems they bought 8086's and 286's with only 1 or 2 megs of ram and cga and even monochrome video cards to save money.
At the same time they scaled down on large machine purchases. This was when SCO was mediocrely hot since a 386 server running Xenix or Openserver was cheaper then a mainframe.
Turns out the systems were not powerfull enough and caused more headaches when software evolved faster then the hardware. OS/2 and WIndows 3.0 came out and brand new things called Unix servers from Sun could provide the performance of a big mainframe for a fraction of the cost. (Back then it was mainframe/VAX or micro ).
Turns out it costs corporate America billions over the next decade to fix the problem.
Analyists today think history is repeating itself and the market will grow again. Ronald Reagan started this massive conservative business climate where tax cuts fueled stock prices and into profits. Same is happening again with an even more conservative president. But I think they are wrong.
The pc revolution is over!
Today a pc based file server running Linux can easily outperform most Sun's for a fraction of the price. A low end pc is just as fast as a high end one for basic office use. SGI is almost dead since a Windows box with a good video card can outperform them.
So unless a new technology on the horizon comes in I say the decline will continue.
What maybe next is bandwith and mobile computing improvements.
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.
May 1999 RIP. This is a permanent trend unless something pops up that requires new purchases that corporate American or even Joe sixpack can not live without.
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There hasn't been a single sys admin (or engineer in the pre-IT era) who didn't get financially clipped at some executive or corporate level.
It's a humbling gesture that keeps sys admins in their place and makes them come up with functional miracles with existing equipment purchases (think of Scotty from Star Trek).
Having been in the IT industry at all levels of the IT ladder, I've had to come up with my own fair share of miracles with existing equipment.
Basically, the rule is: Only buy when it's no longer cost-effective to rig something together with existing purchases.
This keeps bottom lines more realistic and prevents rogue sys admins from making their workstation into Pimp.Rig with company cash that could have been spent better elsewhere.
It's frustrating as hell, especially when no personal gain is intended, but such belt-tightening keeps companies afloat these days.
Up, Up, Down, Down, Left, Right, Left, Right, B, A, START
Carr claims that for the above reasons:
This is not necessarily awful, however, for those who hope businesses will start looking toward open source options as the cost effective alternatives..."
Those looking for jobs, however, will continue to deem the situation to be awful.......
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??
Slump? Or finally figuring out that we do not, and never have needed to "upgrade" every 5 weeks...
help me i've cloned myself and can't remember which one I am
Not really large scale IT purchasing related but on a personal note my low end P4 system is simply not stressed by any of the current games or applications that I use. Mr Carmack will probably single handedly determine when my next upgrade will occur in lieu of the release of Doom 3. I think a lot of PC makers and graphics card manufacturers have their fingers crossed that Carmack and Valve will drive PC and hardware sales for the 4th quarter of 2003.
Much of the technology spending that happened in "the spending blow-out of the 1990s" was investment in infrastructure that IT people justified as preventing total collapse from Y2k. That stuff is just starting to wear out now, and it will be replaced gradually, rather than in another spending spree.
As it is so often mentioned on Slashdot, the average American just wants to word process, check email, and surf the web on their computer. Their cellphone can customize rings, play some games, and give them free long distance--fine.
If I can get the former for $700 with a monitor and printer and the latter for $40 a month, I'm pretty satisfied.
These aren't the killer apps you're looking for...move along.
Under capitalism man exploits man. Under communism it's the other way around.
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?
Contrast the age of the metric system to the archaic measurements that my country uses. "My car gets forty rods to the hogshead, and that's the way I likes it!".
Anti-social? My code is just platform-specific.