IT Recession: It's Not Over 'Till the Fat Lady Screams

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When IBM announced its second quarter earnings, the trends in technology spending were already established for 2002: Hardware sales industrywide had sunk to frightening levels, and the only growth in the IT sector seemed to be in the sale of IBM's WebSphere and DB2 software product lines. Now, International Data Corporation (IDC) has released a forecast that charts this unsettling industrywide trend through the end of the year.

According to IDC market researchers, IT spending on hardware for 2002 is expected to decline by 4% over levels in 2001. But overall spending on IT--including hardware, software, and services--is expected to increase in the third quarter of this year.

For instance, PC shipments are down 0.5% from a year ago to $31.1 million in the second quarter of 2002. Although shipment growth improved more significantly in the prior two quarters, the June quarter marks the fifth consecutive decline. The 0.5% decline compares with forecast growth of 1.3% while, sequentially, shipments were down 7.8% from the first quarter vs. a forecast decline of 6.2%.

The forecast acknowledges that companies will generally delay commitments to new IT purchases and projects as austerity measures until 2003 because of the worldwide economic downturn. However, in the fourth quarter some companies will spend money to replace or refresh products that have had extended lifecycles during the previous six quarters, IDC said. As a result, though there will be a recovery in IT spending in the fourth quarter, it will be uneven and will "not favor all IT vendors and market sectors at the same pace," IDC said.

In western Europe, spending on IT is anticipated to grow by 4% in 2002 and 6% in 2003. Comparatively, Japan's growth will continue to be flat this year, but move back to about 7% in 2003, while extra strength will be shown in China, India, Korea, Russia, the Philippines, South Africa, and Poland. The total worldwide spending on IT in 2002 is forecast to be $981 billion for 2002, an overall increase of 3.7% over 2001.

However, a similarly optimistic forecast for IT spending was held by industry analysts last year, before September 11, and fourth quarter earnings of most IT companies for 2001 were sadly disappointing. So though we hold out hope for a steady recovery of IT spending, it's clear that in this IT recession, it's not over till the fat lady screams "Enough!"

Free iSeries Software Utilities

Meanwhile, the cost of some software couldn't be cheaper for some customers as some developers offer numerous "Free Software" promotional sites--even for iSeries software.

For instance, Kisco Information Systems has set up an FTP site where customers can download software utilities and documentation, and use these utilities at no charge. The site, called "Free Stuff" features iSeries 400 utilities that are designed to help programmers and systems administrators. Kisco--a member of the IBM midrange community for more than 16 years--readily acknowledges that the promotion is designed to get its brand and product offerings in front of potential customers. Rich Loeber, president of Kisco Information Systems, said, "We're not just offering a free white paper.... In keeping with our philosophy to be value driven, our objective is to give more to our customers, prospects, and the iSeries community."

The Free Stuff site currently has two software utilities available for downloading: SMARTTN and COPYFSEL. SMARTTN is a desktop organizing utility for the AS/400 and iSeries terminal session user. SMARTTN's utility screen contains a personal phone list, calendar, note pad, and calculator and is accessible with a single-function keystroke. CPYFSEL is a variant of IBM's CPYF utility that allows technicians to make file copies based on field selection rules.

Kisco retains the intellectual property rights offered at Free Stuff, and some of this code was previously licensed out to users. Kisco says it plans to frequently add new code to keep the traffic on the site at a maximum, to draw new prospects, and to continue its service to the iSeries community.

Web Site Java Software for Menus Released

In a similar vein, Apycom Software has released Version 3.00 of Apycom Java Menu Applets, offering the product free to noncommercial and nonprofit sites. This is a collection of highly configurable Java applets that allow developers to create cross-browser drop-down menus, bars, and buttons on a Web site. The applets provide a built-in menu navigation system and more.

The apPopupMenu is a pop-up menu solution. In contrast to other drop-down menus available on the Internet, the apPopupMenu can not only overlap HTML content but can also pop up over frames, form elements, and flash and can even go over the browser window. The applet supports an unlimited number of submenus and six button types. The apMagicMenu is an applet allowing menu development with a "magic floating background." The apMenu and apPulseMenu create menus with unique mouse-over and color-fade effects. The apTabMenu applet provides a tabbed interface--from simple border tabs to Windows-like 3D tabs--for a Web site. The apButtonMenu and apImageMenu are applets for buttons and menu bar.

As the economy continues through its doldrums through the summer and IT pocketbooks remain snapped shut, developers will continue to experiment with trial versions of freeware applet software.

DBI Technologies Releases Microsoft Development Environment for Fast Data Entry

Also available in a trial version is the new Grid Tools 2.0 ActiveX package from DBI Technologies. Grid Tools 2.0 is an ActiveX product designed for developers who require data entry and presentation functionality for data-intensive applications. According to the vendor, Grid Tools 2.0 is designed and engineered for high-volume data entry clerks using mouse and keyboard-only environments. The full trial version, complete with supporting sample application in Access, VB, VFP, C++, and HTML is available at DBI's Web site.

Microsoft Warns the End of "Open Computing" Technology Is Near

Meanwhile, on July 24, the trend toward so-called "open computing" and the free exchange of software technologies was called into question by Microsoft Chairman Bill Gates. At Microsoft's annual conference for financial analysts, the company was attempting to explain its .Net Web services strategy and to compare and contrast its proprietary approach to technology with those put forth by IBM, Oracle, and Sun Microsystems. In Microsoft's view, companies in the future will be using technologies like .Net and Web services in a pay-for-play scenario, "renting" application components that are served across the Internet from a variety of servers. This new kind of technology transaction will require developers to shut down the free "open computing" model of technology knowledge exchange in order to guarantee the value of their services, according to Microsoft. Thus, according to Gates, the era of "open computing" that once typified the PC marketplace will eventually die. In its place will be proprietary protocols controlled by individual companies that meet general industrywide standards.

This approach is in stark contrast to IBM's support of the Linux operating system and the open-source movement. IBM's approach, typified in its WebSphere brand of software, bundles software services and tools into comprehensive tool suites that support open-source protocols--protocols that are defined and shaped by the activities of developers around the world and formulated by international standards. In the IBM view, locking down the intellectual property of a protocol is counter-productive. It's the fastest way to make any software product obsolete: If only the vendor of the product can extend a software product's functionality, developers will balk and sales of the product will suffer. By comparison, according to IBM, making protocols more open--and donating the technological basis of those protocols to an open-source repository--allows faster acceptance of the technologies in the marketplace. This in turn makes the software tools and services that IBM creates more popular and more profitable in the general marketplace. It's a win-win strategy in which all developers share in the wealth of technology as the e-business model expands.

These two varying approaches to the market--the open-source approach and the Microsoft .Net approach--are also an indication of where each company is with its burgeoning Web services and e-business products. Microsoft is in heated competition with small start-up companies that originally pioneered the Web services field, as well as with software and hardware giants like IBM, Oracle, and Sun Microsystems. It feels it must hold closely its company secrets as it builds products and explores this new technology. By contrast, IBM is running hot and furious with its WebSphere product brand and holds the clear lead in the industry in the overall e-business implementation. By keeping protocols open and delivering to industry standards, IBM hopes to extend its lead. And indeed, according to IBM's second quarter earnings statements, IBM actually gained market share in software, while its main competitors in this arena--Oracle and Sun Microsystems--lost ground.

Thomas M. Stockwell is the Editor in Chief of MC Press, LLC. He has written extensively about program development, project management, IT management, and IT consulting and has been a frequent contributor to many midrange periodicals. He has authored numerous white papers for iSeries solutions providers. His most recent consulting assignments have been as a Senior Industry Analyst working with IBM on the iSeries, on the mid-market, and specifically on WebSphere brand positioning. He welcomes your comments about this or other articles and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

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