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…

Advertisements

14 thoughts on “Handicapping IT Markets – Winners and Losers in 2009

  1. Heya this is kind of of off topic but I was wondering if
    bogs use WYSIWYG editors or if you have to mmanually code with HTML.
    I’m starting a blog soon but have no coding knowledge so I wanted to get
    advice from someone with experience. Any help would be enormously
    appreciated!

  2. Hmm it seems like your blog ate my first comment (it was extremely
    long) so I guess I’ll just sum it up what I had
    written and say, I’m thoroughly enjoying your blog.

    I too am an aspiring blog writer but I’m still new to the
    whole thing. Do you have any helpful hints for beginner blog writers?
    I’d genuinely appreciate it.

  3. Your skin type is an essential issue to consider while you want to purchase an electric.
    This pursuit after all leads him to the query of discovering the best electric razor in the market.
    Perfect for the working man who doesn’t mind doing a little bit of clean up himself.

  4. It’s handy to have a sideboard and some storage to keep little knick-knacks.
    The home was a show-off piece and stated one’s place
    in society. Materials: Bright Paper Construction Paper
    Neon Pom Poms Scissors Glue.

  5. Morе importantly, flight-attendants must be able to push heavy carts up and down the aisles, move and lift luggagе, and quickly respond to
    any emergencies. Instead, it was a гeԁuction in calories that determined the amount of weight lost.
    The Fat ʟoss Factor review also recommends thiѕ product
    to use.

  6. What you typed was actually very reasonable. However, what about this?
    what if you composed a catchier title? I am not suggesting
    your information isn’t solid., but suppose you added a headline that makes people desire more?

    I mean Handicapping IT Markets – Winners and Losers in 2009 | John Treadway’s Blog
    is a little plain. You ought to glance at Yahoo’s front page and note how they write news titles
    to get people to click. You might try adding a video or a pic or two to grab readers interested
    about what you’ve got to say. Just my opinion, it might bring your website a little bit more interesting.

  7. Hi, ӏ do think this is a great web site.

    I stumbledupon it 😉 I’m going to come back ߋnce again ѕince I booҟ-markeɗ it.

    Money and freedom is the greatest way to change, maƴ you be ricҺ and continue to
    guide other people.

  8. It’s actually a nice and useful piece of info.
    I am satisfied that you just shared this useful information with us.
    Please stay us informed like this. Thank you for sharing.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s