The Enterprise Economy, 2009

 At the time this column was being written, the global economy had been buffeted by one of the most serious financial crises in more than a generation, resulting in massive government interventions and widely seesawing stock markets.

Even the best economists can't agree on what the business landscape will look like in the year ahead, but IT industry leaders agree that enterprises are likely to be more cautious than ever in how they spend their IT dollars (or euros, pounds, or rupees). Most also agree that any downturn that may be looming won't be a repeat of 2001, when IT departments were ravaged.

While most observers expect demand for IT to remain relatively strong over the coming year, there may be significant shifts to the pragmatic — and strategies to consolidate, virtualize, cloud-enable, and service-orient will reach a fever pitch. As Ross Mason, CTO and co-founder of MuleSource put it so aptly: "When times are tough, it becomes even more imperative for companies to leverage technology to its fullest, in order to maximize worker productivity, increase visibility and business agility to react to market conditions, and gain a sustainable advantage against competitors."

Mason reports that he already is seeing such a dramatic shift in the SOA space, where his company makes its mark. "We are already seeing the beginnings of a dramatic shift in the way that organizations are approaching SOA projects," he says. "IT managers are no longer betting on the enterprise-scale, top-down approach to integration, SOA, and SOA governance. Too many have made large up-front investments on software and services only to have trouble finding the measurable benefits. Instead, pragmatism is ruling the day — leveraging SOA principles and tools at the project level, proving out and quantifying the benefits, and scaling across the organization over time."

Many of the industry leaders I have spoken with say that green IT, virtualization, and other consolidation strategies — which emerged over the past few years — couldn't have matured at a better time. Pam Taylor, president of SHARE, the IBM users group, says greater expense management will result in even more initiatives "to reduce power costs and recover stranded capacity in deployed infrastructure, leading to more total enterprise virtualization and green data centers." Expect to see more cloud computing and SOA as well, as companies seek to do a lot more with a lot less.

Amit Pandey, CEO of Terracotta, says that the rise of open source has also dramatically changed the enterprise landscape since the 2001 downturn. "Fortunately, the industry has made tremendous progress since the last economic recession," he points out. “There are very good open source alternatives to the monolithic JEE [Java Enterprise Edition] application servers. Indeed lightweight components like Spring, Jetty and Tomcat not only save up-front costs but also can save significant development effort. This can save a considerable amount of license fees and ongoing support costs in many organizations.”

There already has been plenty of pressure in recent years to show ROI on a short-term basis with IT projects, and economic conditions will only exacerbate this requirement. As Paul Doscher, CEO of Exalead, sees it: "IT spending will be constrained by restricted budgets, which always happen in an uncertain economy, upping the need to cost-justify projects with specific and restrictive timeframes like three-to-six months, instead of 12-18.”

Doscher also says that IT managers should expect to be kept extremely busy with various mergers, acquisitions, or restructurings that will result from the turbulent economy. "M&A activity forced by financial stress or cheap asset acquisition will create data management and storage headaches within the enterprise. It will also increase the need for effective tools that quickly and easily make the merged assets manageable and keep the overall company running smoothly." Cost-effective and efficient information access across the enterprise will be essential, he adds.

Ultimately, the state of today's economy may mean increased opportunities for some types of IT managers and professionals, especially those who can oversee initiatives that will help consolidate data center operations — such as enterprise architects. Industry observers point to the fact that increased government oversight and involvement in markets may drive fresh mandates and risk management — which requires more IT. As Ron Tolido, CTO of CapGemini in Europe, puts it: "It sounds utterly cynical, but we should not be surprised if the current misery leads to a pile of new IT work. The government is clearly back at the wheel in many places and the public opinion just won't tolerate even the slightest suggestion of misconduct in business. Rules and regulation will be tighter than ever. It means more risk management, more reporting and in general a call for total transparency. All of these areas obviously depend on enabling information systems."
So, there's a lot that needs to be done — let's get back to work.