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..."

Comments

Gosh, utility over cutting edge

[Anonymous Coward]

Who would've guessed? Picking something that works over something that makes you say "Cool."

Re:Gosh, utility over cutting edge

[r84x]

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.

Re:Gosh, utility over cutting edge

[Anonymous Coward]

Then why aren't we using metric? It's the shiny new toy in the world of measurement.

News Flash

[Anonymous Coward]

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.

Re:News Flash

[stinky wizzleteats]

Do you ever think businesses will return to extravagant spending?

Well, I've been in the IT industry for a while now, and I certainly hope not. What made the 90's bad was not the technological advancement and optimism, it was the avarice, the exploitation of the ignorant, and the mercenarism. People bought solutions because it sounded good while bragging on the golf course, or because their absurdly overpaid consultant recommended it, or because their ridiculous sustained growth pressured sales reps forced it down their throats. People and indeed very large companies made a lot of money with no meaningful work ethic nor valuable good or service to provide the customer. There were a lot of jackass cert mercenaries job hopping in the 90's, making 6 figures a year, who soundly deserved to get their asses fired, and I for one, was grateful to see them go. (Many good people lost their jobs for no reason, however. Such is the price of the elasticism of boom and bust.) And I don't think we even need to make the obvious corporate parallel to my individual example.

I am proud that IT consumers are figuring out they don't have to pay Microsoft every two years for the honor of using their crap. I am proud that technological efforts are directed toward useful result instead of name recognition or bragging rights. I am proud that the IT megacorp and consultant establishment is being questioned, and that in house IT specialists are being listened to (they are!).

I care about what I do, and I care about my customers. I find in these times that those qualities are in very high demand. From where I am sitting, the industry has never been better.

The right tools

[BWJones]

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.

Re:The right tools

[krray]

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. :)

Open source

[MrWa]

The article is about IT becoming a part of businesses that must justify new expenses in terms of ROI. This goes along with the previous mentioned articles on /. about IT being an investment.

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...

Optimisitic?

[calebb]

"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...

Do we really need to upgrade?

[lawaetf1]

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.

Hardware

[somethinghollow]

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.

This has always been the case

[Vandil X]

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.

Re:This has always been the case

[ergo98]

Only buy when it's no longer cost-effective to rig something together with existing purchases... ...but such belt-tightening keeps companies afloat these days

Therein lies the crunch: Very few people actually do the math. I worked in one organization where we had 3 basically desktop systems in the field running antiquated processors: For months they had several programmers working on optimizing the code to allow it to run effectively on this underpowered hardware. The total cost to replace the hardware with machines 3x as powerful was around $6000 (and was necessary for further expansion plans), while refactoring the code came in at at least $24000. These sorts of idiotic refusals to do the cost analysis are common, and it's how many organizations spend far more by spending less.

As a sidenote, am I the only one that finds the Microsoft commercials running right now to be absolutely hilarious? In one of them you see an IT department apparently learning to dance between Windows 2003 makes life so much easier and "saves money". What they apparently fail to see is that the cost savings in manpower savings, and they're lambadaing themselves some pink slips. I'm all for efficiency, but that commercial just amazed me in the paradox of the message.

Fits what Nicholas G. Carr predicts in HBR

[Anonymous Coward]

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.
  

More of the Y2k effect

[ondasmom]

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.

Re:We're going all open-source

[G-funk]

I don't know what the application is for, but Oracle -> MySQL is a step backwards

A step? Oracle -> SQL Server 2000 is a step backwards. Oracle -> MySQL is like replacing your Ti80 with an abacus.

Bucking the trend

[Anonymous Coward]

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?