Every time the stockmarket hiccups, investors see their lives flash before their eyes and news headlines are again filled with the cry that the IT industry bubble is about to burst There is no question that these are unsettling and risky times. Mired as the analysts are in more recent, less interesting history it's easy to overlook the past. Throughout most of economic history, well at least since the 1890s, there's been one breakthrough to the next -- the telephone, railways, cars, semiconductors and the Internet. Each quantum leap has kicked off growth and raised living standards.
The IT industry has also faced a period of intense reformation. Most of today's IT buyers lack the skills needed to support e-commerce and many existing systems don't meet e-commerce requirements for reliability, speed and continuous operation. Most enterprises are building a new set of legacy systems by creating Web sites that aren't integrated into the overall IT architecture.
More and more technologies now are commodities. Standard formats and processors for data exchange are fast emerging. ERP systems are creating common platforms for business integration. Web-based applications can be more rapidly and successfully adopted, and so are more likely to deliver their promised business value.
CIOs are being measured by the business value IT delivers to the enterprise. If the IT budget is absorbed mainly by maintenance on existing systems, little value will be created.
Navel-gazing
These are funny times. The stock market crash has sparked a great deal of user introspection -- always a good thing. But it has also knocked a lot of conviction out of people who not so long ago were brimming with confidence, enthusiasm and innovation and have now moved into a holding pattern.
These are strange times indeed and, with all due respect to the luminaries, their predictions are likely to be wrong, some of them laughably so. It's not that these people are not smart it is just that the future is "obviously not obvious" and there's no reason to think we can do any better -- so let's not be smug.
Realising potential
One problem is that new technologies often appear in such primitive states that it's hard to believe they have any future at all. During a recent barrage of strategy review sessions with vendors, I noticed the usual "liberal" sprinkling of buzzwords: e-commerce, portal, communities and, of course, business-to-business (B2B) marketplaces. The creative ways marketers string these words together are even more interesting. Consider the following "An e-commerce marketplace that provides target communities with portal e-commerce capabilities" commented one marketer.
Wow -- they got all the terms in one sentence and it sounds pretty impressive! But if you read closely, the concepts are either redundant or don't make any sense: a marketplace is, by definition, a place where it happens, and the term portal, as used, doesn't have anything to do with conducting commerce in a marketplace.
The main goal of these battling statements is an attempt to create the perception of market leadership and to claim early leads.
Although it is inevitably confusing and frustrating as new markets begin to emerge, early players try to claim leadership status by resorting to using hype spiced with irrelevant or inappropriate numbers. What do these numbers mean? Not much unless you know exactly what segments they include and what assumptions went into the calculations. The problem is not so much in the methodology as it is a factor of the technology. Everyone defines things differently, so everybody comes up with a set of different numbers.
Statistics and lies
Obviously Industry analysts, forecasters, academics and writers who have in the past made predictions that turned out to be wrong, do not tend to publicise their own mistakes, let alone examine in public just where they went wrong.
The former CIO at Dell Computer last year mocked the hype of consultants and industry seers who continually announce the "Next Big Thing" and then leave their clients holding the bag. "By the time the day of reckoning comes, they've already collected their fee and moved on." he said.
So what are buyers to do? Be careful observers of predictions and gee whiz presentations. Don't take them too seriously. Remember that, according to Gartner Group, emerging technologies go through four stages: hype, disillusionment, enlightenment and real world productivity benefits.
No matter how rosy a picture the experts paint, there are bound to be bumps on the road to prosperity. Information technology is certainly not an end into itself (although when you are up to your knees in alligators and you're trying to jump-start the enterprise, it may seem that way.)In the long run, we're told, we are now in the relatively early stages of adding digital intelligence to almost everything we touch and do, and technology stocks will be excellent investments for the long haul. The future may also still belong to the PC -- but the future is looking pretty tough!
Twists and turns
We are poised for quite a few more revolutions over the next 12 months -- from devices to applications to connection services. The changes won't always be painless. They are real, they're coming and they're going to be a lot of fun, at least, most of the time.
Tech stocks are not dead, quite the opposite: enterprises still need e-business technologies, and perhaps they need them more today more than ever before.
The enterprise that is moving to the next phase will require a new mindset: new tools, a more rapid planning process and the ability to keep the organisation aligned with the strategic direction.