John Treadway's Blog

The Last Time I Felt This Good About America…

I guess there are two such times.  Immediately after 9/11 when the country rallied, the stock market reopened, and the world realized that even attacks as big and disastrous as those perpetrated on that day would not, in the end, damage the idea that is the United States.  A few years later that feeling had been replaced by bewildering shame and fear of what we had become under George W. Bush.

The time before that was in the mid-1980s.  I was living in NYC less than a year out of college.  The "Reagan Revolution" was well underway and America was emerging from the 14-year cave that characterized the post-Vietnam War, post-Watergate era.  We were finally starting to feel good about being Americans.  Say what you will about Reagan, but he did give us this.

One memory of that time stands out above all others for me.  I was out with some friends at a microbrew pub called the Manhattan Brewing Company (if I recall correctly).  This was a great loft-style place somewhere in or near the Village, with picnic benches and huge bowls of peanuts in the shell.  It smelled of beer (naturally) and the crunch of peanut shells as people walked through the room was pretty loud. 

In any event, at one point someone stood up and started singing God Bless America, loudly enough that most in this cavernous room could hear him above the hubbub of 500 half-drunk "conversationalists."  By the middle of "Land, that I love…" most everybody in the room was standing.  And singing – or screaming – the rest of that wonderful song.  By the end of the second "home, sweet, home" most people – men and women – were crying openly.  The feeling was sort of a religious rapture.  Right then and there over 500 people resolved to relegate the self-hate of the 70's and early 80's to the dustbin of history.

That was how I felt at 11PM EDT last night.  I, along with countless millions across this great country and around the globe, remembered how it feels to be proud of America and to be inspired to be a better person.  Last night brought back the memory of that night in 1985 in NY, and relegated it to a footnote.  More than 200 years after the framers of our Constitution settled on a compromise that protected the rights of Southern landowners to own slaves in order to form a single country, we have finally moved to a world where "all men are [truly] created equal" and Americans have shown that they will value the quality of a person's character above the color of their skin.

Change, indeed!

‘Twas the Night Before Election Day

Twas the night before election day, when all through the house,
Not a voter was stirring, not even an ACORN mouse.
The chads were hung by the Diebold machine with care,
In hopes that St. Obama soon would be there.

The democrats were nestled all snug in their beds,
While visions of super-majorities danced in their heads.
And Barrack in his 'kerchief and Michelle in her Change cap
Had just settled down for a 10 minute nap.

When out on CNN there arose such a clatter,
I sprang from my bed to see what was the matter.
Away to the laptop I flew like a flash,
Launched IE and Firefox and prayed for no crash.

The moon on the breast of the new Google logo
Gave a luster of payday to investors below.
When what to my wondering eyes should appear,
But a miniature poll and eight tiny pundits with beer.

With a snarky new striver, so lively and quick
That I knew in an instant this must be an RNC trick.
More rapid than cruise missiles her zingers they came,
And she whistled and and shouted and called them by name.

"Now, Plumber! now, Sixpack! now, Rush and The Right,

On Malkin, on Hannity, O'Reilly, let's all speak of Wright."

To the top of the polls, to the win for this Fall,

Now dash away, dash away, dash away all.

Okay… I've run out of time… Someone finish this for me!!!

I Hope George Colony is Right

Forrester CEO George Colony predicts that the tech spending impact for this recession will be lighter than the 2001-2003 tech depression.  He has a few good arguments, but perhaps he's being too optimistic.  One of the budget items that gets cut in a downturn is hefty annual fees to analyst firms like Forrester and Gartner.

Of course, we all hope he is right.  While the Boston area job market is significantly more diversified these days, enterprise technology is still a big piece.  Given that one of the leading employment markets – financial services – is in the trash compactor, we need tech to stay strong.  Health care continues to move along, but we're in crisis there too.  And education (rounding out our top Boston markets) is feeling the pinch with fewer able to afford the big private college tuition payments after their portfolios are down 40% or more over the past 12 months. 

So let's hope the folks at Forrester are right on the money – that we're looking at slowing growth and not massive declines in the enterprise tech sector.

The Cloud Gets Closer with Azure

The most important pioneer in the public cloud computing space is undoubtedly Amazon with their Web Services environment (AWS).  They started it on a big scale with S3 and have made steady and meaningful progress for the last few years to the point where it's now a great platform for both startups and small enterprises.  Recent releases including support for Windows, persistent storage on EC2 nodes and more make this a no-brainer for so many application needs.  Wall Street firms won't run their trading and risk applications in the cloud for some time – if ever.  When an extra milisecond can make or break a trade, you need to control every piece of hardware, software and networking gear in the process.  But for everyday applications like mail, accounting/ERP, CRM and more, the    re's a lot to love in the Cloud.

AWS has spawned a host of smaller but innovative competitors.  And guys like IBM, Cisco, Dell, BMC and others are all over this space.  None of them have had the pure firepower for changing the game until Microsoft's Azure announcement.

With absolute domination on the desktop, leading presence for groupware, messaging and internal network services, Microsoft's full embrace of the cloud is going to result in some serious changes in the enterprise.  What if you never have to buy servers for 90% of your applications?  Or patch them, or upgrade them or manage them??  That's what this announcement means.  Sure, you still have to buy desktops and notebook computers.  But over time you'll need fewer and fewer servers in your business.

It won't happen overnight – this is going to be a 10-year transition.  But the Cloud just got a lot closer and at some point we'll look back on the tons of hardware we owned and shake our heads.

Handicapping IT Markets – Winners and Losers in 2009

This is a fairly unscientific look at some of the possible winners and losers in enterprise technology in 2009.  It's important to note that a Winner is a market that is flat or (not likely) increasing – very few markets are going to be on a fast-growth path.  Loser markets will see material drop-off in demand.  Also note that this is broadly defined – in some customer segments or on a company-by-company basis the results will be different.

The Losers
Let's start with the likely losers – I like to get the bad news out of the way first.

• Enterprise 2.0 / Social Enterprise:  Let's face it – for most companies facing massive layoffs, plant closings, credit blocks and suppliers in similar straights, these are just "nice to have" applications.  Wikis, internal blogs, Yammer, communities and other such solutions are just not mission-critical, no matter what value they propose to bring.  There will be exceptions, but this sector is looking at hard times.
• Mobile Enterprise:  for most businesses (perhaps mobile banking is an exception), internal or customer-facing mobile applications are still in the "leadership" category of spending.  That means we will invest to get a leadership position in using this technology and hope for some real benefits as well.  To paraphrase from Maslow's Hierarchy of Needs – people who are having trouble with food, shelter, safety and other basics are not focused on investing in self-actualization or experimentation. 
• Low-Utilization Software Renewals:  there are dozens or hundreds of applications licensed by companies that don't get that much use.  IT budget-masters are going to force departments to justify renewals on license fees and those apps that "sounded good when we bought it" but aren't adding value to the business will see the ax fall.
• PC Replacements & Vista:  just like consumers are holding onto their cars longer, companies are going to continue or increase their focus on keeping existing technology running longer.  Watch for a faster drop in corporate desktop/laptop purchases.  And Vista is just not a priority.
• Network and Data Center Upgrades:  unless it's really impacting the business, look for consolidation/reduction in data center assets.  That means more stuff on eBay, and less new shiny boxes in the DC.  The exceptions will occur where consolidation and virtualization projects can allow big decreases in data center footprint and power costs. 

There are many more sectors that will be impacted, but this is a good start.  I'd suspect that database, CRM, ERP, and other core infrastructure technologies will also get hit.  Watch for the big enterprise dbms vendors like Sybase and Oracle to ramp up their focus on license compliance enforcement as their pipelines of new business shrink.  Offshore outsourcing may also take a hit as companies try to pull back projects to retain local talent where it makes sense.

The Winners
Despite the downturn, many sectors should continue to be strong. 

• Virtualization:  most companies are still early on their transition to virtualization infrastructures.  The cost savings in terms of hardware and power costs are substantial and the downturn could accelerate this transition
• Security:  a lot of compliance-related security spending will stay strong, even in markets as week as the financial sector.  PCI, SarbOx and other regulations include significant emphasis on IT security.  Network security is fairly mature, though always facing new threats.  Application security is a bigger concern today than a few years ago, so I'd expect this to continue to grow.  If you're leading the risk & compliance function at a public company, security issues surrounding your networks, data and applications make it hard to sleep at night.  Add to that the potential for sabotage by employees expecting to lose their jobs coupled with sloppy development and deployment due to under-staffed IT groups and security incidents are bound to increase.  A combination of "black box" and "white box" application security will be required to guard against both types of employee-introduced vulnerabilities.
• Open Source:  the cost advantages of open source are clearly favored in a tight spending environment.  More Linux, less Windows.  More MySQL and EntperpriseDB and less Oracle and Sybase.  More OpenOffice and less Office.  More Zen, less VMware.  And so on.
• VoIP:  if you're consolidating locations, often times you end up with a lot of excess telephony.  Sell the equipment if you can to fund replacement with VoIP.  Any new offices should be VoIP.  Leased voice T-3 lines are so 1985.
• IP Videoconferencing:  the travel budget is going to get a lot of scrutiny.  Adding a low-cost telepresence infrastructure can reduce the need for a lot of travel between corporate locations.  If you can have the big 1-day meeting with your London team (in London) from the comfort of a conference room in NYC, you'll save a lot on airfare, hotels, and expensive dinners.

Again, this is just a snapshot of some of the likely winners and losers in the massive enterprise tech space.  It's clear that we are looking at a major contraction for some types of IT spending and to once again paraphrase and adapt Maslow – if you're facing insolvency, layoffs, plant closings and stress-mergers, the first things to go are those that merely make you better and the last things to go are those that allow you to exist.  And while the Beatles sang "All you need is love" we all know that water is good too…