Silicon Valley - The Geeks Are Back In Charge?

securitas writes "The New York Times' Steve Lohr reports on a fundamental shift taking place in Silicon Valley in the post-dotcom era: the geeks are back in charge. New start-ups and companies that survived the bubble 'are based on innovation and are run by people with deep technical skills.' These companies have real technology and a solid technical base that have historically been the bedrock of Silicon Valley - something that was temporarily forgotten during the dotcom bubble. Profiled companies include Tellme Networks (speech recognition), InterTrust (DRM - digital rights management), VMware (virtual machines) and Scalix (Linux e-mail servers)."

Comments

Myths

[cubicledrone]

1) Everyone fired or laid off post-dot-com was a skill-less, freeloading slacker who got their technical skills from "Learn $TECHNOLOGY in 21 days" books.

False. In fact, middle-management is now finding their IT department unable to do much of anything without a huge budget increase or new equipment. Middle-management, as expected, is still sitting there, having meetings and trying to figure out what to do.

2) Anyone who can't get a job as a programmer now is a skill-less, freeloading slacker who got their technical skills from "Learn $TECHNOLOGY in 21 days" books.

False. There are Masters Degree holders in both engineering and scientific fields of IT study who cant rent interviews, much less jobs.

3) Technical skills are a commodity.

False. Perhaps 10% of the working population has the training, education and experience to build a complete computer program. Middle-management, unable to understand this fact, much less the technologies they are in charge of, continues to presume that ordering a database is no different than ordering new file cabinets.

When these and other myths are no longer givens in the discussion of improving the IT department, then, and only then, will things improve.

Re:Myths

[Knights who say 'INT]

but it's time for some realism and some recognition that a safe, well paid, job is usually better than a temporary obscenely-paid one.

Actually, you need to do a present-value cashflow comparison between the two options.

Really, "present-value cashflow comparison" is a Business 101 buzzphrase, but it's pretty much how you understand how financial decisions should be made. Everything else in finance (from internal rate of return decisions to Black-Scholes derivative evaluation) are variations on that theme, with different degrees of sophistication.

Here's a quick tutorial I just found on Google. It's really easy to understand, and might avoid unwanted insertions in thy financial behinds.

Re:Myths

[elpapacito]

I think there is a common misconception of what programmers really do. If we compare the cost of resources (in a certain moment in time) of the resources used by programmers (mostly books,hardware,beverages,food) and the cost of resources used by other workers (for instance , a plumber) with the market prices of their products/services and quantity of good/service produced , I think we'll see that programmer are living goldmines.

Let's say that a plumber spends some money in materials to build a network of pipes needed to bring fresh water to an house. He sells his product to one person, with one house. You can't resell that very same work to other persons, because each and every house needs its plumbing works and materials.

Now the programmer spends his/her lifetime in front of a computer and does some investments in himself by buying hardware and books.Some company may pay these costs.Once the program reaches a mature stage it can be sold to MILLIONS of clients with ridicolously low replication costs.

The programmers usually don't get royalties on quantity of software sold : once the program is developed, it's company property and (in theory) the programmer could be fired. Thanks for your help, goto hell.

Now is it unreasonable for a programmer to ask for -comparatively- otrageous wages ? NO ! We have just seen that he's not likely to see his revenue increase EVEN IF the company for which he developed the software sold some million copies.

He may choose to have stock options instead of cash , but as many programmers have understood that's too much of a risk expecially when there isn't a system preventing management from doing wrong business decision or simple fraud.

Someone may say that the programmer doesn't know jack about selling products, financing, accounting , laws etc so he deserves to be paid little because he's not sustaining all the costs involved in running a company. But how the f*ck is a programmer supposed to do ALL of that and still do his job of daily coding and bugfixing ?
It seems humanly impossible to me.

Yet, his product can be sold in enormous quantity and he's supposed to sustain all the risks of his job without a fair share on the QUANTITY of product sold. No wonder he's going to ask for comparatively huge wages.

Interesting cycle

[nepheles]

It's interesting to see a shift this way.

It seems that the tech industry is highly cyclical, and, once the current batch of geeks have innovated sufficiently to create marketable products, slowly business people will come to replace them

Once these products have run their course, and a recession kicks in, the shift happens the other way.

It's a fairly symbiotic relationship, I think, playing to each group's strengths. It's certainly worked for the past 40 years. Long may it continue

one of them is a lawsuit company

[MobyTurbo]

Intertrust, an example of a "geek company" in the article, stopped being a technology company with over 300 employees, and became a patents-on-DRM IP lawsuit company with a little over 30 employees, and no new programming. They are now involved with a lawsuit over DRM features of Windows Media Player.

I don't know why the New York Times chose them as an example of a "geek company" really the only true example of that was VMWare, which never was a dot-com bubble company in the first place.

The worm has turned.

[LibertineR]

I dont know what to attribute it to, but at least in my field, interest has exploded just in the past 3 weeks. It is as if someone pulled a switch, and Silicon Valley was turned back on again. For the past 6 months, I was getting 2-3 inquiries a week, and since October its been 2-3 a day.

Last week, I turned down business for the first time this year for lack of available time. I dont think there is going to be a lot of hiring, but for Consultants like me, things seem to be getting good again really quickly.

If things continue like they have been, I may have to hire an extra couple of consultants myself.