The misty looking glass

Having been grossly wrong the past several years, I will wave off the accusations that I am just an clanging empty vessel and get on with the arduous job of identifying the future.

Tools

2003 will be a good year for the tool makers, after a slow start for .NET, things should pick up as corporations start in earnest to build new systems. Java will continue to have the hearts of a great many developers, but in economically hard times its insatiable need for hardware will begin to leave it legless.

There may also be a breakout for some of the Open Software tools, products based on tools like Perl, PHP, and Python should see continued and increasing use.

A long festering issue (in my humble opine) with how corporations build software could surface. There have been many years now of the monolithic approach to corporate systems, ERP and its scummy brethren, which have cost corporations dearly for little or no benefit, in fact it may be hamstringing many corporations that are finding they don't have flexible enough systems to counter the new economic times. A matured web provides a new environment for the small-is- beautiful approach to systems development. This may be the year we see a rebirth of small application development to achieve the loftiest of corporate goals.

The PC

A bit like Rock and Roll, the PC will be found to have some pace in its old legs. After years of neglect, corporations will have to start buying PC's again simply to replace dying hardware. Whether any significant boom occurs will depend on whether wider spending increases push new systems out the IT department door.

Cap-Ex

2003 will see the first real increases in spending by companies on their IT needs in more than 3 years. This will likely come late in the year. It will probably be mitigated by whether or not the International picture gets clearer or more muddied. If Iraq is a problem of the past, and a certain former Saudi citizen is found with a bullet in his head, then spending may see quite a renaissance.

The existing downturn in spending will also begin to cost companies as support costs begin to escalate. Such bottom line increases in expenditure will cause some companies to further retrench IT in their organizations, potentially putting these companies in good financial shape, but with absolutely no ability to respond to and economic upturn.

The Web

The strange spector of increased sales across the Internet at the expense of traditional channels will continue, especially as companies begin to work employees harder and longer. This is the B2C model working quite healthily. This may also bring out some of the VC capital again.

Extremism

The IT downturn has, by figures from government, lead to a 1/3 downsizing of the IT industry. If the equivalent occured in the Auto industry, GM and all its vendors would have ceased to exist over the last year. The end result of this can only be bad for workforce sentiment. While labor unions have never caught on in the IT industry, many of the former IT employees will head off into other industries which are unionized. Within IT there will be more sanguine views of risk. Companies were able to get much work done through the superhuman efforts of a fairly limited set of highly motivated and educated people. These people may evaporate, going to other industries that offer safer rewards. The end effect could be years of poor performance from IT departments, increased costs, longer development times, longer project completions, and greater turn over (in an industry already known for its high turnover rates).

The Indian Effect

Lots of software development is being moved to the Indian sub-continent. It is propelling the Indian and Pakistani economies to new highs. Approximate $2billion dollars left US shores in 2001 and winged its way to India. US Corporations may not yet be seeing the benefits of this yet, and may never. Not that the Indian software is bad, just that the cost of integrating it into US based organizations will be higher than for indigenously created product. Until India develops enough economy to start to stress it own software needs and so cause local software development to become less like Internation Dumping, this has the potential to cause political change. While times were good and jobs plentiful it was no matter. But in a frail economy, the US will look at its trading partners and want to see a greater two-way street; and not all of that counter trade can come in the form of military goods.

Conclusions

The IT industry faces potentially its best year in many, at least a year with more positive elements than negatives. It should see greater employment; maturation of software tools and technologies; increases in hardware purchasing; the return of the Web; and generally just a brighter picture. There are clouds all around that could rain on the party, but short of a catastrophe (N. Korea) even these clouds should part to give sunnier skies.