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Enterprise Software Sales Dried Up In September
CurtMonash writes "As I predicted a week ago, it looks as if the third quarter was ugly for software vendors, due to the economic crisis. SAP said 'The market developments of the past several weeks have been dramatic and worrying to many businesses. These concerns triggered a very sudden and unexpected drop in business activity at the end of the quarter.' My old acquaintance John Treadway, who used to work in Sybase's financial services vertical unit, reports that things are even worse than that in the financial services industry, Wall Street and retail banks alike. So now what? Well, IT is a huge part of capital spending, and at enterprises that have to cut back capital spending, IT is going to get hurt. On the other hand, high-growth companies — Web businesses, analytic services providers, etc. — may try to power through the downturn. And the more directly an IT project affects near-term profits, the more likely it is to survive."
No shit, Sherlock. Business idiots only care about profits over the next 24 hours -- they never look at the 25th hour or beyond. That's why IT employees (who tend to actually like the work they do) hate the business side (who literally hate their jobs but make their bonuses based on nothing more than profits).
Well, at least they're not trying to blame piracy this time.
What?
That being the tail end of the Dotcom Bust shakeout. Here's a hint: you might want to go ahead and downsize your lifestyle so you can live on that again.
I sincerely doubt we're going to see 25% unemployment, Smoot-Hawley II, or a government takeover of the IT sector the way FDR tried to takeover industry. But it's quite easy to imagine Dow-Jones hitting the 7,300 level, and venture capital frozen until the credit markets thaw. You better be prepared to last it out.
You might want to:
The economy will come back, just like it did after the Dotcom Bust (assuming the $700 bailout isn't as destructive as the Japanese propping up zombie banks for a decade after their real estate bubble burst), but in the meantime it could be a long, cold winter...
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
With enterprise software, you're not paying for the software as much as the army of consultants required for implementation and integration, which, while not rocket science, is far from trivial. Of course, this is usually done incompetently and expensively, but even if it weren't it would still, in most cases, cost way more than a measly 10K.
From what I have personally experienced, and seen in the market in general it was not until mid 2003 that we saw a recovery from the dot com bust. It's only been five years, and to be honest wages have only recently gotten back in line.
How the heck am I supposed to get ahead when these downturns happen every 5 years or so? How does one build wealth, get married and raise a family? I mean I just got my 6 month emergency fund restocked, and now I might have to use it?
I've been in the business since 98. Are these 5 year cycles normal?
Remember the dark days of the dot-com collapse? Microsoft's advertising slogan for Windows 2003 was "Do More With Less." It's ironic because their server software is one of the most expensive in the industry. The "Do More With Less" slogan is far more appropriate for open source software, which you can support in-house if you have the skill set on board.
And that is how it shall be if the economy takes another downturn. Open source software will thrive -- it's already bigger than it was in 2003 -- as more and more "enterprises" (gosh I hate that word) discover its incredible value prop.
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I know these people and I have always wondered how anyone so computer-illiterate could add any productivity to any business.
After plenty of observation the answer more often than not was: They don't.
Thus the solution to your concern is really simple: Fire the person who cannot work when "the blue e has moved" and fill the position with someone who can.
Most of those programmers who make average or below average wages, (see www.salary.com) work for big companies, enjoy maintenance, and keep their desirable skills current, and work ethic sharp will work right on through each recession.
Go "for the brass ring" and hold out for the high paying consultancy jobs or work on leading edge development will make you expendable each time companies retrench from new projects for a year or more. Make the big bucks and be prepared for (typically) a month or two of unemployment for each $10k you were making in salary every time a recession happens.
Don't think that being available for lower paying jobs is always an option. Many employers won't look at you as they assume you will take off when the economy improves anyway.
Seems gloomy? Not necessarily. The time I do get to work on leading edge projects that increase my employer or clients' profitability gives me great satisfaction. The opportunity to mentor others is even more of an ego boost. I just make sure to bank 40% of my take home pay and keep my standard of living to the least expensive home in a neighborhood populated by real professionals (doctors and lawyers) so my kids have great schools and peer groups. My wife and I both make great geek-derived incomes, but you would never know it to look at our outward standard-of-living. Relatively cheap house, older cars, no expensive hobbies like 2nd homes, golf, boating, or season tickets to major league sports all translate to the ability to be able to put money away for a rainy day while buying all the geek toys (big tv, new computers, software, etc,)that we really want.
In addition, you may need to relocate more than once to follow the job of your dreams and value job satisfaction higher than the satisfaction of making above average wages.
You may also need to develop your "soft" skills as a manager and/or sales person as insurance to be marketable.
In my own case I added less technical certifications (M.S. and P.M.P.)to enable me to get management jobs where I was allowed to design and code as well.
I've largely worked for the joy of what I do and been rewarded when not unemployed. I wish you well and hope you will not find it to difficult choosing between the steady work of the maintainer and the sexy work of the new program with lost of customization awaiting your wisdom.
There is always the possibility that you are (a)among the best at whatever in-demand technical skills you possess, (b) have developed winning interpersonal skills, (c) developed 1st rate business expertise, (d) maintain the latest in academic and technical credentials, and (e) have the good fortune to be employed by someone with stable sales and a good balance sheet going into the recession. Meet all of these criteria and you will be fine. If not, you may have to scramble, invest in more education even though times are now tough, work more than job, and accept lower pay when it can be found,
It is no fun when you don't have those noted "keys" but one or two bad experiences may cause you to take actions to protect you for the rest of your career.
Much luck to you.
Live Long and Prosper - Thanks Leonard. You are missed.
You are missing one important factor - the equality of the software. It might be that open source software allows some workers to be more productive, or it might be the other way round. Also, there's the fact that we're talking about software use in a company - like it or not, Active Directory makes managing massive networks trivial - changing from windows to *nix on the desktop will mean a required change in IT management of said computers. That, too, is a one-off cost, but it might make managers baulk.
Accountants have been, hands down, the best clients I've ever had. They're not afraid of hard work. They don't treat every issue that takes more than 60 seconds to explain as a personal attack. They know what they need to get their job done, and know what they want from you.
Accountants submit, by far the best bug reports. No, "Something went wrong the other day, I don't remember exactly was, but here are 100 screenshots with every dialog in the application, including the login screen, could you please look through them and tell me what what I was thinking when I thought I noticed something wrong?" Most people, once they've been told that bug reports need detail go through the motions of providing detail, but not up to the point of putting any thought into it. Accountants, on the other hand, understand the value of putting effort into describing a problem precisely, without extraneous detail. If you know your business, you can often go from receiving the bug report to putting your finger on the exact line of code in minutes.
Accountants are a pleasure to work with.
They have their job to do, a demanding, technical job that requires training and exactitude. It's a job that nobody else understands or wants to think about unless there is trouble, in which case they're expected to somehow conjure cash out of ledgers. If they don't, horrible things happen to everybody in the business. If they do, they might get a pat on the back an then it's back to business as normal.
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Fire the person who cannot work when "the blue e has moved" and fill the position with someone who can.
Many, many, companies (mine included) have hardworking, productive employees who aren't necessarily very computer literate. "Mary in accounting" might be a bookkeeper with 20 years of experience with a company's processes and workflows, may manage the relationships with vendors (and by extension impact cash flow) etc. etc. etc. - Losing her may indeed cost the company money, and saying 'fire an employee because they have trouble when you move the blue e' shows a deeply flawed understanding of the value of human 'capital' at a company.
Everything dropped down all of a sudden.
This isn't some software only thing. Enterprise software is expensive, and every business is tightening there belts to see where the market is going. You would have to be nuts to start an expensive process that isn't critical to your operation right now.
Most people buying enterprise software is looking at a return a year or later after they go live, which can take over a year in it's self.
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