10 Technologies To Bet On in the Recession

Posted on April 1st, 2009 by Robin Bloor in Commentary, IT Trends

Intheory, IT should be counter-cyclical to some extent and it certainlyused to be, in the 1980s and 1990s. The dot com recession could betreated as an exception, because it was so IT focused. But things havechanges. Nowadays, a good deal of IT is in the consumer market (PCs,mobile phones, etc.) So the recession was bound to smack IT upside thehead  - and IT consumer products are suffering accordingly.

The Corporate IT Picture

Estimates (from Gartner et al) about 2009 IT budgets suggest thatthey will be flat to negative (possibly as bad as 5% down.) Thisdoesn’t sound so bad until you realize that about 80% of corporatebudgets are spent on keeping everything going from an operational andmaintenance perspective. A reduction of 5% could be a reduction of 25%in corporate spend on hardware, software and external consultancy.However it’s a mixed picture. One clear effect that is already evidentis that the spending on PCs and servers has fallen precipitously andthat on its own could account for a 5% drop in spending.

The reality though is that it’s a mixed market: some IT have budgetshave been reined in, while others have been decimated. It’s also worthbearing in mind that IT spend is a lead indicator of economic recovery.Companies begin to invest in IT as they start to get confident that thestorm has passed, in the hope that they’ll come flying out of therecession like a bat out of hell.

So the question arises: what are the information technologies thatwill do well this year? Here’s a list ten that seem to be reasonablyrecession proof:

1. Server Virtualization. This is a quick win ifyou’ve not already virtualized everything in the data center that’s gotan ounce it silicon in it. Estimates suggest that less than 20 percentof the server population out there has been consolidated. Couple thatwith the fact that virtualization reduces a server population by about25 percent and you have a win-win-win scenario. Youcut costs, stop the data center from overflowing and feel greener thana ripe cucumber. Previously you might have thought of selling the oldservers on eBay, but now you can just keep them and gradually deploymore apps on them.
2. Client Virtualization. What’s sauce for the serveris sauce for the client. Pushing desktop PCs into the data center insome way (think Citrix, VMware, PC blades, etc.) and replacing themwith thin clients will usually cut costs. Note that it is a morearduous project than server virtualization - plus you may have to dealwith the specter of users holding tightly onto their PCs every time youwalk by. (Hint: Deploy thin clients at night.) Client virtualizationcuts administration costs and, in the longer term, PC procurement costs.
3. Data Storage. The recession may reduce the numberof people who work for an organizations and it may reduce the number oftransactions that an organization executes, and it may reduce revenues,but it wont reduce the amount of dat that has to be stored. That’s justthe way it is, so get used to it. At least some of the data storgaevendors are going to have a reasonable time in the recession.
4. Data Mining. Just as they don’t stop gathering thedata in a recession they dont stop mining it. To be more precise, theindications are that the VLDB vendors (Green Plum, Vertica, Sybase etal) are having a reasonably good time despite the crumbling economy.This has a lot to do with delivering value - there’s gold in “them thardata heaps.”
5. PPM. By which I mean Project Portfolio Management. I just blogged about CA’s Clarity yesterday,but I happen to know that it’s not just Clarity that’s on a good growthcurve. Other PPM vendors are doing well, epecially where they have a SaaS offering.
6. Open Source. Corporate IT Departments stoppedbeing leary of Open Source quite a while ago, but they didn’timmediately embark on a crusade to slice up software licensing fees.There are many opportunities in many places to cut license costs withOpen Source products used sensibly. Also a great deal of time can besaved. Some products like Hibernate for example are used with only afew people realizing that they are open source products. For webdevelopment there’s a plethora of open source products such as Joomla,Drupal and Wordpress (if you want to build a web site or a blog). Dothey really cost nothing? Yes they do. Are they really good? Yes theyare. Are they still improving? Some of them certainly are. Nowadaysorganizations ought to have a strategy for using open source ratherthan simply using an open source product here and there.
7. SaaS. Software as a Service gets more mature everyyear. It’s inexpensive to implement and easy to trial. The portfolio ofSalesforce.com, the leader in the field, is increasing and it is nowsurrounded by a partner ecosystem. There’s also Oracle On-line andNetSuite. Other SaaS startup companies, such as LucidEra (for BI) orWorkday (for some ERP functions) seem to be making an impression.
8. SaaFS. Software as a Free Service could be evenmore compelling than SaaS. Now is definitely the time to examine thefeasibility of web “office applications”, either from Google or Zoho.They are increasing in sophistication by the month and for some usersthey are “good enough already”. Actually there are also advantages tothem because the data is held on the server. It allows them to providean excellent versioning service. Using email as a free service alsomakes sense for small companies.
9. Cloud Computing. The gradual drift towards cloudcomputing (or utility computing) has turned into a flood. Amazon litthe way with EC2 although both EMC’s Mozy or LiveVault for back-up werearound ealier. Infrastructure as a Service is a particularly attractiveidea for organizations that rae running out of data center space andthe major vendors (IBM & HP) seem to be laying down strategies tofuel this market right now. There’s also Platform as a Service vendorssuch as Google App Engine, Bungee, Force.com et al that are worthinvestigating.
10. Mashups. The joy of mashups comes from opening upyour APIs to a developer community and having them developcomplementary capability that enhances your own systems/web sites. Theneat thing about mashups is that they don’t cost you anything otherthan the effort to provide a little support to the developer communityand enable them to profit in some way if their mashups get used. It’s akind of free market in software components which can serve a companywell if it knows how to manage it cheaply.

I have a sneaking suspicion that when the IT industry emerges fromthe downturn, in a year or so it will be a different industry than theone that went into it.