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IT Trends In and Out of Downturn

Hemos posted more than 11 years ago | from the how-you-can-spend-more-money dept.

The Almighty Buck 190

An anonymous reader writes "Washington Post has an interesting article talking about how IT industry is changing its business models to survive (IBM: "Pay As You Save"; HP: universal printer driver; Consulting weak; Oursourcing booming), as well as how outsiders view the downturn (Merrill Lynch: it's just another bust after PC and mainframe, but the good thing is, "each 'wave' has so far represented a tenfold increase in the number of technology users."). I'm particularly interested in the outsourcing story. It might explain why IBM will benefit and other vendors like Sun Microsystem which don't have a strong service arm will suffer."

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190 comments

fp (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#4404322)

fsirt ps0t!

Consulting weak? (1, Funny)

Em Emalb (452530) | more than 11 years ago | (#4404325)

subliminal message there guys?

frost squid (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#4404327)

sqk

Consulting good? (5, Interesting)

AtariDatacenter (31657) | more than 11 years ago | (#4404334)

Well, don't ask EDS about it. And IBM seems to be a little sheepish on it, too. Outsourcing IT doesn't appear to be very strong lately, either. I don't know why that'd be focused on as a strength. (Although comparitavely, it isn't THAT bad as other things.)

Obligatory Beowulf Post (0, Offtopic)

Anonymous Coward | more than 11 years ago | (#4404366)

Imagine a Beowulf cluster of business models!
  • Beowulf? [slashdot.org] by czardonic (Score:4, Funny) Monday October 07, @02:02PM
  • Re:Obligatory Beowulf Post [slashdot.org] by Anonymous Coward (Score:-1) Monday October 07, @02:02PM
  • Greatest joke ever! [slashdot.org] by conner_bw (Score:1) Monday October 07, @02:03PM

Nicely done (0)

Anonymous Coward | more than 11 years ago | (#4404624)

Assmunch.

Important Stuff:

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Outsourcing is on the rise?? (5, Insightful)

ErichTheRed (39327) | more than 11 years ago | (#4404383)

The problem with outsourcing arrangements is that companies only see savings at the beginning of the arrangement. Sure, they get to fire their expensive permanent employees. But guess what happens when something breaks? You end up with people who don't know how that particular company does business. I've seen this happen in three places. Average problem resolution goes from hours to days as users and staff try to figure out which call center halfway across the country to address their problem to.

Know the business? (4, Insightful)

nuggz (69912) | more than 11 years ago | (#4404489)

The computer techs shouldn't need to know the business.

The business or 'customer' should clearly specify their requirements. The techs should build it.
If they just guess at your requirements they need to know the business to get a good guess, project takes too long, everything's a mess and the end solution sucks.

Yes I work in design, yes I know nobody does it this way, but they should.

Re:Know the business? (5, Insightful)

sphealey (2855) | more than 11 years ago | (#4404603)

The computer techs shouldn't need to know the business.
If you are just talking about providing e-mail and a bog-standard Word and Excel install, with no support to any greater level than the included Help files, sure.

But beyond that, thre is no such thing as a "computer tech without business knowledge". Even the lowest printer repair tech has to make decisions such as "respond to VP A's call or Executive VP B's call first?". Anc unless you are aware that although VP A is lower on the totem pole his team is working on a company-saving proposal and needs priority support, you aren't going to make the right choice.

Then there is the simple 1st-level help desk call, "Why don't the numbers on my Crystal Report add up?" That one could take from 30 seconds of mouse training to 30 hours of analyzing the business rules behind the data to resolve. The outsourced provider will either refuse to answer the question, or will miss the deeper significance.

Of course, the 1st year savings get booked and credited to the CxO who decided to outsource; the pain gets booked to the rest of the business units down the road. Oh well.

sPh

Re:Know the business? (5, Insightful)

Golias (176380) | more than 11 years ago | (#4404637)

The people who only know the business are unaware of the potential savings, efficiencies, etc., that current technology solutions can offer their particular business.

People who only know the tech are also unaware of how they can add value to a business, because they have no clue what that business does.

Tech people who also master an executive level understanding of a particular field (insurance, financial planning, transportation, medical care, manufacturing, general accounting, etc.) are worth a fortune to their companies, as are business people who master technology. Not only do such people find ways to save costs or improve income to the tune of millions, but they are also few and far between, cranking up demand for their services even higher among those companies who are shrewd enough to hire them.

Should the paper MCSE who runs your Exchange server be expected to know the business? No, I suppose not. Especially since you should probably lay him off as soon as your network administrators replace that server with a sendmail process on a spare UNIX box. But your development staff should know the company's business as well as any of the suits, if not better. I know you would probably rather pick up another programming language or some other skill that's easy to transplant between the jobs you change every two or three years (my attitude is very much the same) but sooner or later, you hit a salary ceiling as a general "hired gun" techie, and you need a deeper, more specialized knowledge of something before you are going to break past it.

Mail admin not needing to know the business? (2)

mbourgon (186257) | more than 11 years ago | (#4404805)

If you're only running Exchange? Sure. But we used to use Lotus Notes, and it was used for several important applications. Our Notes admin knew a LOT about the business by the time we finished building it. I'd build the backend in SQL, he's build the front end in Notes, and we could move data either way.

And, equally important - if he doesn't know the business, why the hell not? It'll make filtering spam easier, it'll let him know the best times to do maintenance on the servers (one of my Unix servers was turned off for 3 months out of the year!), etc, etc. It also helps the admin add value to what he does - "wouldn't it be handy if you were emailed every ?"

Re:Mail admin not needing to know the business? (2)

Golias (176380) | more than 11 years ago | (#4404872)

My point was that the low-end, disposable, grunt-work techs hired from Your Friendly Neighborhood Staff Agency probably don't need to know the business, because they won't be around long enough to learn it all, let alone use that knowledge.

Companies that have MS Exchange servers for the company mail often hand the task of maintaining it to such low-level techs.

Re:Mail admin not needing to know the business? (2)

MSBob (307239) | more than 11 years ago | (#4405354)

And, equally important - if he doesn't know the business, why the hell not? It'll make filtering spam easier[...]

Absolutely. I wish our admin did something to Exchange to make it recognize that those flash ridden, animated gif infested, silly sound playing emails actually are internal and they simply come from marketing...

Re:Know the business? (5, Interesting)

legLess (127550) | more than 11 years ago | (#4404660)

Blockquothe the poster:
The computer techs shouldn't need to know the business.
Wrong, wrong, wrong. IT is a business problem: how do I get functionality X with resources Y? There are many aspects of any business which are not obvious to an outsider or quantifiable by an insider.

You're correct that the techs shouldn't guess at requirements based on their knowledge of the business. But to imply, as I think you have, that a technical person's knowledge of a business is of no value is silly.

Say you're building an accounting application. Would you as a designer want to know that there are several Asian people on staff, and sometimes they have trouble reading English? Would you like to know that the accounts receivable employee is a woman in her 50's who won't retire for 10 years, was raised on old DOS applications, and is terrified of GUIs? What are the chances of either of these people or groups communicating that to you clearly? Do you think management knows or cares?

There's no substitute for a person on the ground, so to speak. If you plan for the techs to have 0 knowledge of the business then you have to assume that the business is 100% cognizant of itself (for the particular problem domain) and can clearly communicate that knowledge. You must know that never happens.

Re:Know the business? (2, Informative)

mikey504 (464225) | more than 11 years ago | (#4404773)

Nope.

The customer doesn't understand the technology well enough to best determine how it meets their needs. We get into big trouble around here when our "power users" get ideas about how things should be done, sell them to management and their peers, and then come to us to "implement".

It is vital that we understand the businees of the people we support, so we can determine how best to spend their limited resources. I find that people here sometimes understand how technology can be used, but they don't understand its limitations well enough to determine how best to use it. A recent example would be a construction manager here who tried to email a 37 MB word document to someone. He knows how to make complex documents, insert photos, and compose his message-- but he doesn't know he should compress his jpg images before he inserts them, and he doesn't know what a "reasonable" file size is.

To narrow down the list of things that are possible to solutions that are practical and efficient, you have to know both the technology and the business it supports.

Requirements and Limits (2)

nuggz (69912) | more than 11 years ago | (#4404899)

If an actual requirement is transfering 37 MB files this should be addressed.

A shared directory or server of some sort is likely possible to solve that requirement.

Or you should have them explain why this is a requirement and if modifying behaviour is the appropriate answer.

Having some knowledge of what goes on is valuable, but not nearly as important as the design requirements themself.

Re:Know the business? (5, Informative)

balamw (552275) | more than 11 years ago | (#4404941)

IMHO knowing the business is key. I'm a scientist working in a small high-tech manufacturing company and don't do IT for a living, but I dabble. We have one in-house IT person to handle everything from help-desk to maintaining our ERP system for ~250 people. I take care of the linux boxen and generaly act as a sounding board for the IT guy when stuff ain't working...

When stuff really hits the fan, everyone thinks that their particular issue is priority #1. One of the roles of a well-trained IT staff is to sort out those priorities and get the comapny back to business efficiently. You really need to know how the pieces are interconnected in order to do that effectively.

Another example: my wife works for a large company that recently outsourced most, but not all, of their IT staff. Now, when she has issues with the PCs in her office/lab she no longer has a single point of contact to deal with recurring problems and ends up having to explain the issue from the beginning again with the tech-of-the-day (Can you close all your apps and reboot? Is it plugged in?)... So what happens? One of the people in her group who knows something about PCs ends up being the local "mr. fix it" and ends up doing that instead of his real job.

Yet another example: She ordered a PC to drive a lab instrument since the old one died a horrible death. It took over two months for it to show up. Why? The only authorized PC for that purpose came with a "free" RAM upgrade and a 19" monitor, and even though the PC showed up within days the RAM was delayed. So the PC and, the >$100,000 piece of equipment was idled because it only had 128M of RAM and could not be delivered without the RAM upgrade. Never mind that the old PC that ran the machine had only 32M to begin with. Oh yeah, and that 19" monitor? It wouldn't fit in the equipment rack, so they ended up repurposing it as someone's desktop monitor. Of course the people in the lab knew it wan't going to fit, and mentioned this up front but the package deal could not be unbundled.

The irony of the whole thing was that it later turned out that the PC was incompatible with the data aquistion board required to drive the instrument even though it met all the manufacturer's specifications.

How did they find out? The in-house IT person from a neighboring department dropped by for something else and mentioned that they had found the same problem with their instruments. She found them an old clunker that was up to the job, and had them up and running the next day....

So, if you add up all the time wasted in dealing with these consultants that don't know what the group does or how it fits into the big picture of the company's business, do they still save money over a dedicated in-house IT staff?

You be the judge...

Balam

Re:Know the business? (1)

huge (52607) | more than 11 years ago | (#4404952)

The computer techs shouldn't need to know the business.

The business or 'customer' should clearly specify their requirements. The techs should build it.
I disagree. Techs should know about the business. It might be possible to provide a 'fix' to a problem or a solution without knoledge of the business, but to provide a true, elegant solution, you have to see the big picture.

It is true that customer (internal or external) should provide good specs, but techs should be able to recommed possible changes when they see that the request is conflicting with some existing components, or when techs know that there is a way to adjust the request in a way that it's more beneficial to customer. If techs know nothing about the business it self, it could be hard to suggest any changes.

And yes, I work also in design and I hate to implement stupid requests, though they are formally ok with very well detailed goals. That's why I sometimes suggest some changes.

Re:Know the business? (0)

Anonymous Coward | more than 11 years ago | (#4405139)

The computer techs shouldn't need to know the business. The business should clearly specify their requirements.

That reminds me of the person who asked me for a faster sorting algorithm. I directed them at a collection, but pointed out the best one depended upon the problem. The person had a file with the score of every play of a game and wanted to list the top 10 scores. I was able to point out several much more efficient solutions...they'd been depending upon the speed of the computer until then.

The technology, the purpose, and the solution are interrelated.

Re:Know the business? (2)

nuggz (69912) | more than 11 years ago | (#4405398)

The requirement wasn't a fast sort.
The requirement was the top 10 scores.

Specifying the wrong requirements causes trouble.

Re:Know the business? (2, Insightful)

jmertic (544942) | more than 11 years ago | (#4405220)

The business or 'customer' should clearly specify their requirements. The techs should build it.

Yes I work in design, yes I know nobody does it this way, but they should.

If it worked this way, my job would be 50% easier ;->

But seriously, the biggest issue IMHO is that users don't often know what they want. I've sat in and brainstormed to fix so many workflow issues that if I were to take thier requests verbatim, it would have been the most bizarre, kludged together POS that ever lived. Often times people don't see the bigger picture/problem and don't see how technology could improve it. Other people assume too much from technology (where Human intervention requirements are neccesary and AI won't suffice).

The best solution is to have a group of the techies who know the business be the bridge between both parties since they can just about always come up with excellent solutions. Anymore we have IT people sit in on most meeting like this to help move things along and not get stuck on mundane issues.

As always YMMV, but it seems to hold true most of the time

Re:Know the business? (2)

gorilla (36491) | more than 11 years ago | (#4405392)

The business or 'customer' should clearly specify their requirements. The techs should build it.

How will the customer know their requirements? Many times I've shown someone how to do something, and they're amazed, not because they didn't know how to do it, but because they didn't know it was even possible to do it. If you don't understand the technical side, you won't know it's possible. If you don't understand the business side, you won't know it's needed. The best people understand both, so they know what's needed and what's possible.

Process optimization (2)

nuggz (69912) | more than 11 years ago | (#4405424)

Process optimization is simple.

1. Write down what you do.
2. Remove wasteful steps.
3. merge/automate redundant steps.
4. Improved solution.

Properly explaining what you want to have done helps. Looking at what you are doing step by step will give the best solution. Sometimes it isn't even a technological solution.

Re:Outsourcing is on the rise?? (0)

Anonymous Coward | more than 11 years ago | (#4404705)

this is where the businesses with good leadership and those ran by morons and beancounters seperate..

Any business without a permanent competent and paid well IT person... even just one... is ran by fools.

you have to have someone in house and on staff that knows your business, and knows your setup. Even thinking that you can outsource it all is pure stupidity... Outsource some of it? sure... prune it backto 2-3 really good people and allow them to freely bring in the outsources when needed. but also require them to DOCUMENT it time, costs, etc...

because you will soon find that outsourcing costs more than the full time staff you had...

Re:Outsourcing is on the rise?? (2, Insightful)

dogfart (601976) | more than 11 years ago | (#4404894)

A big problem is that the outsourcer becomes embedded into your day-to-day operations. You lose your in-house capabilities, are tied to the outsourcer's (proprietary) technology and methods, have no visibility to your IT operations, and worst yet, you are in a position where getting rid of the outsourcer becomes ungodly difficult. The biggest cost of outsourcing is the hidden cost of eliminating the outsourcer. Whatever financial benefit comes at the ocst of completely losing control and flexibility.

Sort of like going through a divorce..

Or maybe having a kidney removed

Ya' know, sometimes it actually works. (1, Informative)

Anonymous Coward | more than 11 years ago | (#4405061)

The trick is getting competent outsourcers with sound business principles.

Not easy, but they are out there.

We outsourced some stuff. Then, when it was all successful and all the powers that be decided to insource it. Here's the result...

It was outsourced for $1 million to develop, and exactly $580K/year to run. There were 2 in-house project managers assigned for 20-40% of their time. The few outages we suffered were all corrected 100%, far, far, within the timeframe terms of the contract. Upgrades and changes were T&M, a phone call away, and done on a 2 month upgrade cycle. Ongoing change budget was about $20-40K/year. The contract was renewed each year, and the project was live 5 years.

It was insourced for $4 million to develop, and has an ongoing group budged of $1.2 million/yr. It drives, we think, from about $200K/yr in Corporate (shared) infrastructure expenses. We've had full day outages, about once a month. We don't dare ask for many changes. The smallest change request takes months, is ALWAYS met with a request for $20K or more in funding, and the rollout ends up with the sites offline far in excess of anything we've ever experienced with the outsourcers.

Bottom Line

Outsourcers SHOULD be cheaper than any in-house effort. They should be dedicated to the task you seek to have done, their people should have far more experience than you can ever hope for, and have the advantage of scale. Your outsources should be "on topic" and they should be able to show you existing production along the lines of what you're trying to do.

When it comes to specifications, they should be able to help you understand and tailor their existing systems and tools to fit your needs. Anyone that demands you send them a XXX page "spec" for them to implement to the letter should be PROMPTLY discarded.

Why discarded? Because ground zero development is always best done in-house. Outsourcers can have no prior experience in such, no scale. But, they surely do bring another copy of management overhead expenses to the table.

But even if they offer an existing solution set to what you need, if they are running their business just as poorly as you are, then you get screwed. Many, like EDS et. al., burn all ends of the candle. The seek the cheapest employees (low level, high turnover) and thus are probably less bright than just pulling people off the street. They have no shame in "locking you in" then squeezing you for all you're worth. Etc.

Bad business? Yes. Do they lose customers? Yes, but there's another being born every minute. The sad part is they're poisioning the market's view of an entire industry.

Does your outsourcer have a long term or short term view? Does it serve it's employees well enough that they stay and continue to grow on topic?

Last, and not least... Are you a big enough customer to maintain influence? Are you funding the effort fairly? If you'd pay $1 million to do something in-house, you shouldn't feel all too secure in suckering someone in to do it for far less.

Oh, should have defined... (1, Insightful)

Anonymous Coward | more than 11 years ago | (#4405157)

To be clear...

"Good Business" - both sides end up feeling the relationship was equitable.

"Bad Business" - one side, or the other, end up being, or feeling they were, taken advantage of.

"poorly run business" - a business that is willing to engage in bad business.

I bring this up because the masses of MBA being churned out are taught maximizing profit is the definition of "good business". That is, however, a new age viewpoint that actually ends up driving most modern companies into doing significant bad business.

A strong service arm? (0, Offtopic)

Prince_Ali (614163) | more than 11 years ago | (#4404387)

If I wasn't afraid of having to post at 0 again I would have made a lewd joke about having a strong service arm. Moderation works!

Oxymoron (5, Insightful)

Andrewkov (140579) | more than 11 years ago | (#4404418)

There's the oxymoron of the day: "Save as you spend". Wow.

Re:Oxymoron (0)

ubugly2 (454850) | more than 11 years ago | (#4404459)

almost fits in with"we'll make it up in volume"..

Re:Oxymoron (5, Funny)

Pedrito (94783) | more than 11 years ago | (#4404511)

There's the oxymoron of the day: "Save as you spend". Wow.

Wives have been using this one for decades. "Sure honey, I spent $500 on shoes, but they were on sale. I saved us tons of money."

Re:Oxymoron (1, Interesting)

Anonymous Coward | more than 11 years ago | (#4404627)

How is that an oxymoron (or insightful for that matter). I saved $15 at the grocery store yesterday having spent $50. One of the definitions of save is - "to spend less by." In order for the phrase to be an oxymoron it would have to have contradictory terms. Obviously spend and save are not contradictory. Perhaps next time you think you are making a witty remark you should spend some time doing something else and leave posting for the more intelligent of us.

Re:Oxymoron (0)

Anonymous Coward | more than 11 years ago | (#4404956)

The more you spend, the more you save!

My two thoughts (5, Insightful)

nuggz (69912) | more than 11 years ago | (#4404420)

1. You get what you pay for, and good help is hard to find. Getting good constant support coverage is expensive.

2. Scale can help. Like insurance spreading the cost can help manage bumps, and smooth out the actual required resources.

By outsourcing you could save money by not buying more service then you need, and even lower your support if all you need is someone 'on call' incase "something happens".
But like any pooled asset, there will be times it isn't available, and it isn't like having a dedicated team to take care of stuff

Pooled assets (1)

Crossplatform (532841) | more than 11 years ago | (#4404654)

This idea of pooled assets is only effective if the pool of assests is accessable to everyone on a fair baisis. Many insuriance companies don't save people money they just make sure one day of bad luck (lightning strike) doesn't kill the company. But this is not always true. Example: I worked at a computer repair location and most home owners insurance would only cover lighting strikes on computers if it could be positively known that it was lightning that did the damage and they wanted my company to sign off on the cause of damage. Of course we can't say that it was lightning so... "sorry mam it could have been your negligence that cause the damage so there's nothing we can do"

The tech industry will mature? (5, Insightful)

nogoodmonkey (614350) | more than 11 years ago | (#4404421)

"I don't think the computer industry will truly mature until 2015, 2020," he said. I don't understand where this comment fit into that article. BUT - I do not believe this at all. The technology industry changes each and every day, I don't believe that it will "mature" at any time, if at all.

Of course it will.......... (1)

Ride-My-Rocket (96935) | more than 11 years ago | (#4404493)

Heck, I'm 27 now -- at 40yrs of age, I should definitely be considered mature by then. Does that mean my mom can still tell me to act my age?

Re:Of course it will.......... (0)

Anonymous Coward | more than 11 years ago | (#4405335)

I'm forty and my mom tells me to act my age all the time...
People my age shouldn't have so many toys :-)

Re:The tech industry will mature? (3, Interesting)

Usquebaugh (230216) | more than 11 years ago | (#4404524)

It has already matured and will continue to do so. IT does not change every day, in fact since I started working in the industry very little has changed. There has been no ground breaking discoveries in a long time, say 15+ years. What has happened is that IT staff are becoming more aware that they have to provide working systems not flashy technology. My employer cares not that we have a character based system but that we never have an unplanned outage.

As a side, and this is /., I see more and more IT shops moving to linux. If Linux gets some half decent Open Source vertical applications then companies will flock to it. Why pay $2,500,000 for an ERP package that you have to tailor?

Re:The tech industry will mature? (1)

nogoodmonkey (614350) | more than 11 years ago | (#4404715)

It takes more than half decent open source apps to make companies migrate to GNU/Linux. What about all the money the company spent sending an employee to get their MSCE (or equivalent certification)? And for a lot of server administrators, ease of maintaining a server will probably come before security and reliability.

Re:The tech industry will mature? (1)

ealar dlanvuli (523604) | more than 11 years ago | (#4405327)

I'm sorry what?

That didn't even make sense. Are you saying the only reason companies won't switch is because they jumped onto a scam from MS that allows them to sell more servers? To say linux is harder to adminster than windows is a joke, and if it really is there are alot of companies with a vested interest in making it not so.

I do hope more CTO's have more intelligence than yourself.

I would like to point one thing out, due to the nature of linux, the more companies that support it, the better it gets. Windows on the other hand is only as good as MS makes it, which do you think will win in the long run?

Re:The tech industry will mature? (2, Insightful)

sys$manager (25156) | more than 11 years ago | (#4404736)

As a side, and this is /., I see more and more IT shops moving to linux. If Linux gets some half decent Open Source vertical applications then companies will flock to it. Why pay $2,500,000 for an ERP package that you have to tailor?

There is NEVER going to be a piece of open source software that can compete with SAP, BAAN, JD Edwards, or Peoplesoft. No matter what, it will NEVER happen. These products are too extensive to be created in the open source world.

This means I'm still paying $2.5m for a piece of software that I can run on Linux or Solaris (let's assume they all get ported to Linux). So I can run them on Linux on Intel hardware or Solaris on Sun hardware. Which choice do you think the technical architects and executives are going to make? What Linux system is going to compete with a Sun 6800 for these software packages?

Open source is NOT ALWAYS the answer.

Re:The tech industry will mature? (3, Interesting)

Usquebaugh (230216) | more than 11 years ago | (#4405284)

Never say never!

When did SAP, BANN et al get created? Did they come ready formed at their present huge size? No, they started off as small packages satisfying one or two areas of need. They then grew to encompass other areas.

No Linux system currently has the name brand of Sun, but what about Linux/390? or whatever the mainframe version is called. Sun has an uphill battle to keep intel out of the high end server market.

Both of the preceeding points are really the same one.

A very common exaample of the same things is that of steel mills. When the US ruled the world of steel there was massive plants churning out steel. Then someone developed the mini mill. These mills did not produce as good steel as the big plants but their steel was cheap. So companies that needed cheap steel and did not need the quality bought steel from the mini mills. The large plants discovered the demand for their low end steel was diminishing so they started to withdraw from the low margin market. All the while mini mills researched how to make better steel cheaply. Thus they started enchroaching on the next level of steel quality and so on and so forth.

Digital cameras are another example. Kodak dismissed digital cameras because the quality was so poor. Pity they didn't understand Moores law exponential growth in digital quality?

I forsee the day when most vertical software is Open Source. Someone or some company decides that it needs an accounting system and decides to write one. They release the code because one of their developers convinces the board that like most companies software is not an asset but a liability to them. Another developer sees this accounting package and thinks it's a good fit for his company if only he can change a few things. So he releases his fixes etc etc. Now this accounting package is rolling along and everything is gelling, hell they even get a mention on /. Another company needs inventory control, they have this accounting package and they decide to write inventory control, they might even solicite other companies to see if they need inventry control.

An added bonus for companies that decide to implement this package is that upgrades are free, the demand for expensive developers decreases.

There are already Open Source projects dealing with ERP/CRM.

Re:The tech industry will mature? (2, Informative)

nelsonal (549144) | more than 11 years ago | (#4404875)

This is a business technical term, it means that revenue growth slows, but in a secular pattern not just a cyclical downturn. He isn't arguing that the products we have now will be with us forever, but that the total revenue pie will decelerate and eventually decrease in size for all IT products. It all comes from a model businesspeople use to show how new companies/products/industries behave over time. They are introduced and only a few early adopters use their products. New features are added regularly. Plasma screens are a pretty good example of a product in this statge. Then growth begins to take off, as many people decide to start using the product. DVD players are in a growth stage. After enough people switch to the new product, fewer people are adopting it, and maturity sets in, new variations are introduced, but they don't usually spark the same excitement and rarely get new users, just people switching within the product. Televisions and PCs are here. Finally, decline sets in as everyone has begun using the product and they simply replace broken products. Washing machines stoves and other things are in this stage. New produducts are introduced in all of thes industry groups, but mature industries usually cannot grow as quickly because most people already have their product and don't want or need additional products.

Mature (2)

MountainLogic (92466) | more than 11 years ago | (#4405100)

In the MBA world mature means the industry has stopped growing in sales volume (read $$$$), it has nothing to do with technology. It also means whoever is left is just slugging it out for market share. Think laundry soap or soda crackers for examples of mature industries.

The fact being is (-1)

Sir Bard (605512) | more than 11 years ago | (#4404437)

I'm a linux sysadmin and I use Linux. Linux has a nice steady market trend. I get my computers from penguin computing

Services business weak too (4, Insightful)

jmcnamera (519408) | more than 11 years ago | (#4404440)

I'm in a services organization and business is poor right now.

Yes, service orgs make lots of PR for each signed deal, but they are over many years and sometimes they get cancelled in advance of completion.

Also, services have more costs associated with them than do software or hardware sales.

To some extent, accounting of service contracts can be misleading by both front-ending the benefits and by buying other service orgs to obtain their profits but spreading out the acquisition costs.

It's not a comfortable business to be in right now.

Hey.... (0, Troll)

Tsali (594389) | more than 11 years ago | (#4404458)

If no one is investing in things and everyone wants to stick with what they have now because there is no compelling reason to replace stuff, does this mean the MS.Net initiative is trying to fill a hole that doesn't exist?

Me thinks so. You could throw Palladium on that pile as well.

Re:Hey.... (0)

Anonymous Coward | more than 11 years ago | (#4404655)

One could also say that Linux is doomed also then. For most of the world there is no compelling reason to switch to Linux from either Microsoft or their propietary Unix. And don't tell me about saving money. It is always cheaper to stick with what I have (meaning no upgrades either) then to switch even if the OS itself is free.

Re:Hey.... (1)

captainClassLoader (240591) | more than 11 years ago | (#4404807)

Well, I don't know about .NET or Palladium, but there's some evidence [computerworld.com] that WinXP hasn't exactly taken off as M$ expected it would, precisely because "there's no compelling reason to replace stuff".

Outsourcing is foolish (5, Insightful)

davidsheckler (45018) | more than 11 years ago | (#4404492)

Companies outsource because they don't have the political will to control costs themselves. So they pass it off to another company like IBM.

The result is usually the reduced cost you were looking for and severely reduced service levels.

I once consulted for a very large Insurance company, which decided to outsource it's legacy IT staff, approximatly 300 people.

About a third of them left and they were the most knowledgable, each averaging 20 years experience on the systems they maintained.

A small modification that might take any of them a day to build, test and install would take me three weeks. (it's hard to compete with 20 years of domain knowledge).

Skilled IT workers are not assembly line workers. Outsourcing should be for easily replaced resources.

do everything companies == foolish (0)

Anonymous Coward | more than 11 years ago | (#4404570)

Outsourcing is efficient and necessary. A company ,or a team within a company, should have one specialty. When a sales team starts spending time learning graphic design or IT your wasting money training people to do something they aren't good at and probably don't want to do. If you hire a designer because you need one for the current project, your going to lose money when you don't need her any more. If you outsource the design, and learn enough that you don't get screwed, you get an expert, you don't pay benefits, payroll taxes, or termination costs; your team stays flexible and focused on their specialty.

Re:do everything companies == foolish (0)

Anonymous Coward | more than 11 years ago | (#4404891)

If you outsource the design, and learn enough that you don't get screwed, you get an expert, you don't pay benefits, payroll taxes, or termination costs; your team stays flexible and focused on their specialty.


That's true. Of course, you have to pay the outsourcing firm enough to pay those costs and also pay their high-priced CEO and all of their overhead, not to mention their profit. And this "expert" you get is likely fresh out of school with the st00pid certs to prove it.

Re:Outsourcing is foolish (2, Interesting)

ngoy (551435) | more than 11 years ago | (#4404653)

I don't believe outsourcing is foolish (of course I work for an outsourcing company). It depends on what the motives are and as you said, because the company does not have the will to control costs themselves. If you have let your company grow too big for it's britches, as an example, for the company we do break/fix outsourcing for (a large 5 letter chip-making company), outsourcing is a great way to save money on things you really shouldn't have been wasting your time doing in the first place. There is a point where there is so much bureaucracy that you have whole divisions dedicated to supporting your own business, and people collecting compensation based on generous stock/comp plans, who should really be making much less than they are. There are divisions here that charge $120 an hour to their own coworkers! For programming! It costs over $1000/month to have a server hosted internally. And that does not include the price of the server! These are all internal chargebacks. If I was a stockholder I would be pissed that they didn't outsource, or at least get rid of half of their IT staff. The larger a company gets, the more it operates and wastes money like our government. shango

Outsourcing is smart... (2, Interesting)

ellisDtrails (583304) | more than 11 years ago | (#4404688)

Economics tells us that when an entity chooses to specialize and excel at a particular thing, not only does it maximize its own profit potential, but it also makes the competitive environment better through comparative advantage. Why should a widget company develop or even maintain its own technology staff when there are companies out there (pick one, IBM, HP, Microsoft, etc) who produce products and service offerings that will do it better than that company will ever be able to. All the technologists out there I am sure have seen this. Ever worked for or with companies that are out of their league, hire or maintain a technology staff, and almost ALWAYS outsource to consultants in the end because they don't know what they are doing? What the big players are doing is commodotizing this need by providing software packages that don't require ground-up programming. The consultant is still needed to implement and customize, but the "employee" or the "Dilbert" in-house shlep's days are numbered.

Re:Outsourcing is smart... (2)

HiThere (15173) | more than 11 years ago | (#4405212)

It also tells us that it maximizes it's own benefits, not yours. After you are on the hook, and the contract is signed, you can expect you service calls to take longer to be answered, to be answered by cheaper people, and to take longer to upgrade to a higher level tech. But you don't find this out until after the contract is signed. What you find out before then is whether they could provide good service if they tried.

Before you sign into any agreement like that, be sure you have you path out carefully mapped, and that it doesn't depend on the cooperation of the people you're planning to depend on (after all, if they were dependable you wouldn't need to get out). --- Now, what's the cost to get out without killing your company? (figure both time and money). How much can the service degrade before you will pay that cost? Expect it to degrade almost that much.

Re:Outsourcing is foolish (2)

smitty_one_each (243267) | more than 11 years ago | (#4405162)

Outsourcing should be for easily replaced resources.
Best sentence on the thread.

What I don't get about outsourcing (2)

swb (14022) | more than 11 years ago | (#4405244)

What I don't get about outsourcing is how its less expensive, especially at the operational level.

Based on the zillions of meetings we've had with the honchos, on-site help desk functionality is manditory. OK, how is it *cheaper* to have someone else come in and piss of the users than to hire someone to do it as an employee?

An outsourced employee's wage is likely on par with their niche, so you're paying that *AND* you're paying the rather large markup that the outsourcing company charges.

I can believe that an outsourced employee might in special circumstances bring higher level of technical knowledge, but that's seldom valuable in an operational situation, usually in a planning or roll-out situation.

My understanding from the conversations I've had with PHBs is that outsourcing was a big deal in the mid-90s, but a lot of places got burned. The savings weren't that great and the opportunity costs were high. Has that kind of thinking changed?

Re:Outsourcing is foolish (1)

Inoen (590519) | more than 11 years ago | (#4405338)

Outsourcing doesn't necessarily mean having someone else write your applications.

I've seen it work quite well with smaller tasks. Such as (which we do in my company) hiring a company to perform backups. Or produce some of the (non-code) content.

Or write installers for your own software. Or create the copy protection. Or port the software to other platforms. There are plenty of examples where outsourcing can work fine.

Even testing could be outsourced. I have yet to see good results from that, but it could work, i guess.

Agree... in part (1)

baine (600693) | more than 11 years ago | (#4405390)

Outsourcing is often the result of boardroom political backbiting and palm-greasing; but I think to claim that it's because there's a lack of will to control costs over-simplifies, and misses the point. The scenario runs like this : In tought economic times, a CEO/board of directors will decide it's time to cut costs. Corporate officers are usually more willing to cut departments that are 'cost centers' than those which are 'revenue centers'. In my opinion, the reason IT usually gets the shaft is because it's usually the youngest 'cost center' in a company. Accounting, marketing, and HR departments have all been around for ages. There's a perception on the CEO level that these are 'required' departments. Good IT departments, who have prooven themselves as 'cost reducers' are usually a lot more resistant to that perception. Average IT departments (i.e. most of them) still face that problem; especially more so if the company threw tons of money on overhyped efficiency promises in the past few years. The VPs of all the departments know that their heads are potentially on the chopping block. I have seen it happen where the majority of them band together to throw the IT department under the bus, thereby saving their own necks. They recommend letting an outsourced IT company handle the job, since they're supposedly experts in the field (of course, the likes of IBM and GE Capitol feed this perception with their marketing strategies). With the expensive IT department gone, the rest of the VPs then get a year or two to clean up and lean up their departments, before it becomes financially obvious that the IT department wasn't the culprit, and that outsourcing is costing a bundle. At which time, the VPs get together and say "IT costs are killing our profitability, we need our own internal IT department to keep costs down". And so goes the cycle. Seen it happen, been laid off as a result, and will probably be re-hired in a year or two after it all shakes out...

Thanks for ignoring me qjkx (0)

Anonymous Coward | more than 11 years ago | (#4404507)

The biggest shaker will be destruction of copyright, then patent laws. IT will have to be more service oriented.

IT will still get screwed (0)

Anonymous Coward | more than 11 years ago | (#4404527)

By incompetent mangers and they will have no recourse.

everyone knows Sprint PCS (the gamer phone) (0)

Anonymous Coward | more than 11 years ago | (#4404534)

right? Well if the telco's really wanted to make some money, here's what they should do.

Make a new phone that can connect to a bbs and play Legend of The Red Dragon, Pimp Wars, send fidonet mail, and download and read a qwk packet.

This way the Gamers would re-learn bbs technology, and it would spur millions of local and even perhaps (on a good bbs) long distance calls.

Ah, but now someone (suit) will now probably copyright (greedy bastard) my idea. SO....I would like to release this idea under the GNU public license right now. This idea is open source. Who will jump on it first?

if they want to provide the conectivity and make money off that... fine. But the bbs (stay away)

Re:everyone knows Sprint PCS (the gamer phone) (0)

Anonymous Coward | more than 11 years ago | (#4404559)

wow! That's a great idea!

sprintpcs-bbs.sourceforge.net

Re:everyone knows Sprint PCS (the gamer phone) (0)

Anonymous Coward | more than 11 years ago | (#4404670)

Ah, but now someone (suit) will now probably copyright (greedy bastard) my idea

No one can copyright your ideas without your permission. Now patents are a different ballgame. Perhaps you should look the two up along with trademarks and write an essay for show and tell this week. It has to be better than the naked pictures of your mother that you brought last week.

Re:everyone knows Sprint PCS (the gamer phone) (0)

Anonymous Coward | more than 11 years ago | (#4404785)

Now there's a guy that obviously works for Sprint.

Wait a Minute (4, Interesting)

malloci (467466) | more than 11 years ago | (#4404536)

Steven Milunovich, an analyst at Merrill Lynch & Co., views the recent technology bust as the latest wave in a series for the industry. The first wave was the boom and bust of the mainframe computer in the early '70s. The second was that of the PC in the '90s. The third wave, as he sees it, will be the rise of more networked computing, in which, for example, applications will be used via the Internet.

Okay, does anyone else see a problem with this? First, an analysis of the tech market from a stock analyst. Second, the analyst in question works for a company under investigation for bogus analysis of market trends(click [nbr.com] )?
Third, as I don't quite remember the pc boom, or the mainframe boom as being discussed by stock analysts, shortly after whatever previous bust I am even more likely not to believe this. Especially when the speil for the next great major advancement sounds like .NET propaganda. Oh wait, I suppose that Merril Lynch is in bed with Microsoft too.

Of Course They're Outsoruce (1)

Delifisek (190943) | more than 11 years ago | (#4404580)

But what if some one leaked some important data to rivals ?.

What if M$ uses all data to their operations.

Sun support weak ? (2, Interesting)

Archfeld (6757) | more than 11 years ago | (#4404590)

From my experience Sun does excellent support. Not that they can touch IBM, but who can ? But both SUN and IBM are miles above HP/COMPAQ in terms of onsite technical expertise, and documentation. Rarely does IBM or SUN ever call in 2nd level, and I've never had them need a 3rd person, the 'NEW' HP guys need an assistant to call in help...It has been a LONG while since I dealt with an HP Unix system so I can't comment on support there.

Re:Sun support weak ? (3, Insightful)

qurob (543434) | more than 11 years ago | (#4404826)


Most HP/Dell/Compaq guys that come out to replace our components are exactly that, parts pullers.

You pay big $$$ from IBM/Sun/SGI for service contracts, and you get what you pay for.

But the Compaq and Dell techs come out and have no clue what's going on, and they get parts Fed-ex'd to their moms house and bring them out. When there's a REAL problem (read: more than a bad power supply) you're in trouble.

Re:Sun support weak ? (0)

Anonymous Coward | more than 11 years ago | (#4405353)

I second this

Re:Sun support weak ? (2)

gorilla (36491) | more than 11 years ago | (#4405360)

How do you tell the field circus guy with a flat tire? He's the guy randomly changing tires till he finds the one that's flat.

How do you tell the field circus guy with a flat battery? He's the guy randomly changing tires till he finds the one that's flat.

Re:Sun support weak ? (1)

bajan_on_ice (32348) | more than 11 years ago | (#4404915)

Sun/IBM field support is good, but I believe that the article is referring to IBM Global Services/Sun Microsystems Professional Services, when they were referring to the "services" aspect. IBM GS is the 400lb gorrilla in that space, while SunPS is a much smaller organization. They both employ skilled professionals, but IBM GS gets much more play because IBM realizes that hardware is commoditized (sic) and that services are the future.

I'm a sun support person (0)

Anonymous Coward | more than 11 years ago | (#4405048)

Thanks for your vote of support, Archfeld. We aren't IBM and thank goodness for that. I'd be outa here so fast if that were to happen, poor IT job market or not.

I've spoken to enough IBMGS folks out in the field when they call in for Sun/Solaris support to know I wouldn't want their jobs.

Consulting vs. Hardware vs. Software vs. Services (5, Insightful)

ShannonClark (18497) | more than 11 years ago | (#4404601)

Generalizing somewhat, there are FOUR options for a company currently in "high tech".

One - Sell hardware. Generally billed once, though often financed and perhaps with a "support package" attached

Two - Sell "software". Usually licensed with an annual "maintance" agreement in addition (speaking of enterprise software - in consumer terms this is the annual or bi-annual upgrades/updates that you have to pay for)

Three - Sell a "service" (think ASP's, telcos, ISPs - generally billed on a periodic basis - often monthly, but also quarterly or yearly plans exist).

Four - sell "consulting" or services. This is further subdivided into "project work" or "outsourcing". Projects are generally of a limited duration and for a specific purpose, outsourcing usually involves the takeing over a company's IT staff, equipment, and processes - and is generally of a very long term duration.

There are, of course, variations to all of the above - but these are a basic choices that a company today faces - and all of these are driven in tandem by corporate needs.

New software usually meant new hardware, plenty of services needs, and lots of projects and outsource contracts to go around.

However, we are still suffering from the combination of Y2K, the "dotcom bust", and diminishing returns on technology investment (or at least the PERCEPTION of diminishing returns).

Y2K caused many large corporations to move up spending - which they had planned to do in the past two-three years, to 1999 so as to put new software and systems in place in advance of Y2K. In the course of doing this major corporations also steamlined and simplified their internal systems - often reducing by 50% or more the number of applications they supported internally.

Further, many corporations standardized on fewer platforms - and reduced variation within their corporations.

In 2000 it appeared that perhaps the "Internet boom" would be the driver of future investment in a post-y2k world - and indeed many corporations spent a lot of money on Internet/e-commerce projects - however though a lot of money was spent on these projects, and some companies did see big gains - far less money was spent on Internet projects than had been spent on ERP or other similar enterprise wide projects.

Further, as a new field - most of this money was spent on consultants and projects. Some was spent on services (hosting packages, additional T1s etc) - but less spent on software packages or additional hardware.

Software companies and hardware companies alike have not, in general, offered compelling new systems that provide powerful reasons for additional investment - corporations look at the desktops and servers that they have, note that most of their systems are underutilized, and see little reason to return to regular upgrade cycles - rather they see little to be gained from expensive upgrades - and much to be said for focusing their resources on using what they already own.

So, this in turn, means that corporate internal resources are increasingly available for internal projects - reducing still further the need for outside consultants on a project basis.

What then is the solution?

First - technology is driven by providing VALUE - i.e. providing systems that help people make money (by saving them money or making people more productive). Software vendors should focus on what their tools "really" need to do - and make compelling enhancements in those areas.

Second - We may be seeing a transition from a mostly growth industry to one that will be more stable - there is still money to be made, but annual growth rates of 30+% are probably a thing of the past.

Third - companies should focus on building long term value added relationships with their customers - if you make your client money on an ongoing basis, that is generally a recipe for continued and mutually profitable business - in the "internet boom" many service/consulting firms forgot this - they made money, but their clients just lost money - now those clients are often reluctant to spend further funds with those firms (if the firms are even still around).

So what do I suggest - focus on value added, focus on building systems that customers want, and offer them in a model that both you and your customers gain value (i.e. don't price in such a manner than it is impossible for your client to make money, or conversely don't price your products, services, software, or consulting below what you need to make profit - neither route leads to long term success.

As the president and founder of a software and consulting firm started in 2000 I have observed this up close and personally - at present, my firm is focused on out consulting practice - looking at how we can continually add value to our clients - and still make money doing so.

Re:Consulting vs. Hardware vs. Software vs. Servic (0)

Anonymous Coward | more than 11 years ago | (#4404704)

Before anybody mods this up I think it is a 'bot of some sort pulling quotes from different places. It is just a bunch of buzzwords and cliches we have heard a million times put together to look like an intelligent post. I don't see anything in here original, informative, or insightful. Please mod this accordingly.

Re:Consulting vs. Hardware vs. Software vs. Servic (1)

silverbax (452214) | more than 11 years ago | (#4404970)

And it was so.

This industry is shooting itself in the foot. (4, Interesting)

Boss, Pointy Haired (537010) | more than 11 years ago | (#4404611)

This industry is shooting itself in the foot by bringing out a new 'technology' every 7.5 seconds.

Companies might start spending more on Information Technology if there were just a few months stability in the industry such that the media and C*O's can learn what's available, actually understand what things like 'XML' are, what it can do for them etc. and get round to planning ahead.

At the moment, this is industry is doing everything but helping C*O's see ahead by bombarding them with new whiz bang mega hyped new 'technology' all the time.

Let's just chill for a bit.

Re:This industry is shooting itself in the foot. (2)

Fulcrum of Evil (560260) | more than 11 years ago | (#4404745)

if there were just a few months stability in the industry such that the media and C*O's can learn what's available, actually understand what things like 'XML' are

What, two and a half years isn't enough? I first encountered XML in 1999.

Re:This industry is shooting itself in the foot. (0)

Anonymous Coward | more than 11 years ago | (#4404766)

Your username is appropiate for your comment. It sounds like something that would come from Dilbert's boss. You don't slow down innovation for the dim-witted of the world. It is just like my old idiot landlord who keeps waiting to buy his computer until things slow down and the prices drop. Most companies are (at least) 2-3 years behind in technology as it is. There is no reason for Joe CIO to fret about the pace of technology.

I believe technology spending is slowing because people don't need to buy a better, faster, bigger computer anymore. I work on an 800 Mhz laptop running Windows 2000 at work. Every app that I run runs quickly and I haven't crashed since I got the machine over a year ago. Why would my company need to spend money on new hardware when this one runs so well? Back when we were working on G3's with OS 8 our machines crashed daily, apps took minutes to launch instead of days, and we couldn't have more than one or two apps open at a time. That was when we switched.

Re:This industry is shooting itself in the foot. (1)

silverbax (452214) | more than 11 years ago | (#4404949)

You are 100% correct, and the responses you got from your post prove that too many tech people just don't get it. They whine when they get laid off, or they're projects get cut, but as soon as you suggest ANY form of business structure or development PR, you get rants.
The tech industry cranks out new versions and thinks they are "progressing"...but usually, all they have done is generate more bugs, move features, or re-write internal code. It's pure bunk to think that what you want to do as a programmer ( which is write new code ) is always best for the business ( which is to find stable products to make money ).

Hey, next time you buy a new car, what about if the manufacturer shows up every two weeks and wants you to buy a COMPLETELY NEW CAR for the same price you just paid but with a bunch of features you don't really know about ( say, winshield wiper warmers, and then windshield wiper warmers 2.0, and then winsheild wiper wiper warmers "plus"...buinesses are just like you, they can't afford to constantly pay for new features they can't use, and then scrap that right away just becuase the software industry wants them to.

Re:This industry is shooting itself in the foot. (0)

Anonymous Coward | more than 11 years ago | (#4405262)

You obviously misunderstood my rebuttal (directly above your post). A good CIO should now when to find that cut-off point where they can build their companies resources around a particular generation of technology. The industry shouldn't have to stop to let the slow minded catch up.

As for your car analogy, yes they do. I bought my car last July and sure enough this year they sent me brochures for the latest model which looks only slightly different than my model. They threw in a new stereo and another color option. I know better than to beat myself up over it though. What I have works well just like my computer.

Outsourcing (4, Interesting)

Anonymous Coward | more than 11 years ago | (#4404620)

A little intro, I was one of the many that got laid of in IBM essex last year. There were about 6000 of us in all. Roughly 1/3 - 1/2 the engeniering work force.

IBM will survive because of it's products. Not services. The IBM service model is based entirley on the Hardware that it sells. The reason people are buying into it is because it is like insurance. Pay IBM a smaller amoutn and if anything tragic happens they will fix it. If nothing happens you are not out as much money as if you kept a full time person to deal with your IBM mainfrane systems.

I'm tired and sick (with a cold not mentally) so that's all I have to say. IBM will live or die by it hardware. It's service arm is only part of the PR machine.

Re:Outsourcing (0)

Anonymous Coward | more than 11 years ago | (#4404942)

There are two "f's" in "off" not one. Of all of the spelling blunders that are spread amongst slashdot comments, this is the one that mosts pisses me off. Add to that "too" and "to" and you have the two greatest errors of the English language.

Outsourcing strong? (5, Interesting)

dcavanaugh (248349) | more than 11 years ago | (#4404643)

A big story around here involves CSC laying off a few thousand people who had been working as part of a huge ($1B) contract that involved outsourcing numerous IT functions for United Technologies Corp (UTC). Reading the press coverage, it looks like a classic outsourcing problem: The project scope widens as the competitors bid each other down. Ultimately, some lucky company finds themselves as the winner[?] of a huge obligation to supply all kinds of services for a price may not be realistic. Quite frankly, I find it hard to believe that traditional IT departments could ever waste as much money as the outsourcers claim they can save.

There is a time and place to outsource certain functions, but these comprehensive deals are for the birds. To me, the key is an exit strategy. If you don't have enough non-outsourced resources, you can never fire the outsourcers. You can expect service and price to shift from the ultra-competitive model of the intitial contract to the "gotcha" model of the renewal.

I worked for the State of Connecticut in 1998. At the time, Governor John Rowland was most anxious to outsource all of state government IT. He was already despised by the state labor unions, and this was simply the icing on the cake. Rowland campaigned very hard to convince a skeptical legislature that big money would be saved. In the end, one of the largest outsourcing proposals in history collapsed when Rowland realized that the bidders were promising savings in later years, and there was zero (or negative) savings in the early years. By the time those years arrived, the alleged "savings" would be mostly funny-money comparisions based on hypothetical pie-in-the-sky projections. If Rowland could have saved a single dollar up front, he would have happily taken the deal if for no other reason than to screw the unions. Outsourcing has been a tough sell in this area ever since. When you can't fool the politicians, who is left to fool?

Outsourse tech support for grandma (1)

888 Geek Help (607631) | more than 11 years ago | (#4404700)

All my laid off IT buddies lamented the no support after you buy the box phenomiumum and resorted to charging [888geekhelp.com] Grandma for her middle of the night tech support calls. Not much help for the linux crowd unless Grandma calls you at 2 am to ask for (eek) -WINDOW$- tech support

Re:Outsourse tech support for grandma (-1, Flamebait)

Anonymous Coward | more than 11 years ago | (#4404743)

that's because all your IT tech bussies were posers and wannabees.. us real experts are still employed and have no trouble finding work (Hell I had an offer last week.. turned it down not enough of an increase from what I have now...)

It work slump? only for the fodder...

Re:Outsourse tech support for grandma (2, Insightful)

silverbax (452214) | more than 11 years ago | (#4404860)

You may have a point. It seems that the more experience I gain in the IT industry, the more I realize how little true IT knowledge is in the marketplace. The problem is, can business management tell the difference yet?

Re:Outsourse tech support for grandma (1)

888 Geek Help (607631) | more than 11 years ago | (#4404926)

or in our case college kids -but hey if you cant claim to be 'leet then your nothing right?

Re:Outsourse tech support for grandma (3, Funny)

Boss, Pointy Haired (537010) | more than 11 years ago | (#4404754)

Look's like a great service s'long as you don't get through to TrollGeek.

"Ok Betty, click on Start, then Run, then type 'cmd' and press Enter'.

"Done that."

"Now type format c: .....

Outsourcing vs. Internal (4, Insightful)

calib0r (546092) | more than 11 years ago | (#4404742)

Having worked for both a company that outsourced services and a company that handled outsourced services, I've seen both sides of the spectrum.

Companies need to learn what to outsource and what not to outsource. My personal opinion is that large scale projects need to be internal, with only small, specialized sections outsourced to the appropriate firm.

Small business can benefit immensely from handing off, for example, their websites and design services instead of bringing those services in-house. But does a large, multinational firm really benefit from turning these services out to another company? More than likely not, and in the long run it will cost them more.

The last company I worked for handled the website and design services for several large companies, on top of many smaller businesses. The large companies spent, on average, $300-400k per yer for web management and design, whereas the smaller firms only maxed out at around 12-40k per year. Proportionally these services where the same. The larger firms would have benefited from hiring and keeping internal these services.
Just my $0.02.

Costs will rule all decisions (0)

Anonymous Coward | more than 11 years ago | (#4405013)

If some function can be outsourced to a cheaper finality than internalizing it, that is what will happen. No one is concerned about value or excellence, just what is cheapest. I'm not trying to be cynical, I am simply stating that businesses will take cheap over good.

A sign of maturity (5, Funny)

FJ (18034) | more than 11 years ago | (#4404746)

You'll know when the software industry matures. It is when the next release of a product introduces more new features than new bugs.

Do not believe the pundits (4, Insightful)

airrage (514164) | more than 11 years ago | (#4404823)

There will be no IT turnaround in 2003. Let me repeat that: THERE WILL BE NO IT TURNAROUND in 2003. So what your telling me is that if the economy rebounds in 2003 that suddenly the IT spending floodgates will open wide? All the .commers can come back? I think it will be even worse that that: companies are currently learning that they can live without the latest and greatest. Which means, of course, that when the economy does come back, that big companies (HP, SUN, IBM) aren't going to get the big IT paychecks they think they're going to get. Which means of course, that all these layoffs are more or less permanent.

Re:Do not believe the pundits (2)

MtViewGuy (197597) | more than 11 years ago | (#4405302)

However, we're going to be seeing changes in data transport technology that will require major improvements in IT infrastructure by 2010.

First, we have begun the process to the switch to 3G cellular telephones. This next-generation cellphone will require a lot of infrastructure changes to implement, and we'll need to a lot of new hardware to implement 3G cellular service.

Second, we may see very soon the beginning of the switch from IPv4 to IPv6. This will also require a lot of new hardware since a large fraction of today's telecommunications network aren't designed to handle IPv6; that means a lot of software upgrades and a lot of upgrades of actual network hardware itself to support IPv6.

Third, the imposition of digital television in the USA to comply with the ATSC standards will also require a lot of upgrades to our whole broadcast infrastructure.

We may be in an economic slump right now, but by mid-decade the technological developments I mentioned will need hardware upgrades on a scale that will make the 1990's tech boom seem like a minor even in comparison, since these technological changes will affect everyone.

Sun's position weakening (4, Interesting)

vtlidl (558929) | more than 11 years ago | (#4404858)

Sun's position in the marketplace is really starting to slide and not having a strong service division is the least of their problems.

I work for a company that is Sun reseller, and recently they have been adding more bureaucracy and "rules" to their resellers. This causes the sales force to waste a lot of time and limits them from achieving a better sales position. Recently Sun "required" us to send a sun certified tech to a new product announcement in a town 8 hours away. This three day trip was a complete waste of time as the same knowledge could be obtained in one hour of reading information off their site and spend the remaining time billing hours to clients.

Sun is also slitting its own throat with their pricing. Several year's ago they use to argue price/performance, which was a strong argument for their products. Now with the improvements and wider sector approval of Linux, they can't make that argument. The only area where they have any strength in the marketplace is the very high end server and possibly security for the types that like to have a company behind a product. There market for the most powerful 5% isn't that small, and I think its only a matter of time before other products overtake them in the price department.

whatever (1)

mao che minh (611166) | more than 11 years ago | (#4404927)

Out sourcing, consulting, internal hiring, whatever, I don't care what works as long as it gets me a developer job so that I can be like the guy in the Monster.com commercial sniffing my business card all hard when no one is looking.

may sound trollish (2, Informative)

SupahVee (146778) | more than 11 years ago | (#4404971)

This may sound a bit trollish, but I mean it more in a Devil's Advocate sort of way... Could the fact that this 'downturn' is lasting so long have anything to do with the majority of tech writers/industry pundits/whatever continuously writing articles of doom for the tech industry? I mean come on, anyone that is reading a column like that on a regular basis already KNOWS it's going to take a while for IT spending to pick back up, for companies to rediscover the value of their IT dept, from the PC techs to the UNIX security admins. It's almost like these writers are practically trolling for hits themselves, isn't it? Let's face it, reading the tech news online is just as monotonous as watching eMpTyVee or CNN.

Not outsourcing but something like it. (3, Insightful)

xyote (598794) | more than 11 years ago | (#4405025)

I used to work for a dot com with a business model based on outsourcing, "managed care". It doesn't work. Customers' expectations are too high. You can't possibly provide those kind of service levels economically.

I think, however, that you could do something like that on a ala cart basis. Outsource stuff piecemeal. Remote 3rd party backup, remote 3rd party network monitoring, etc... The customer expectations are different that level. The interface issues are smaller and more manageable. And in more narrow specialties, you have a better chance at getting ecnonomy of scale.

But what does it do for the workers? (1)

Kickstart70 (531316) | more than 11 years ago | (#4405294)

It's hell out there, at least in Vancouver Canada, where I am, for tech workers. There's no work, or the work that IS available is deskside support for non-technology firms (if you are lucky, with a smattering of sysadminning thrown in).

Oursourcing is all fine and dandy, but are they outsourcing to small tech firms, individuals, or just to the big and expensive tech companies that are laying off people by the thousands and working their leftover staff half to death? My take on what I've seen is the latter.

*sigh* All in the name of artificially keeping up the stock price for the shareholders - what people really gotta realize is that slumps happen. Sometimes the market will dip, sometimes it will surge. In the end it doesn't matter if your stock dips a little if in the long-term the company is viable and had good people working for it.

Kickstart
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