How safe is your tech job? Many IT workers are now asking themselves this question with increasing frequency and for good reason. In the past month ZDNet has reported on the loss of several thousand technology jobs in the UK -- and this trend looks set to continue as the tech recession bites deeper into the hardcore tech industry, having already devoured the fluffier dotcom sector for its first course.
How much worse will it get, and when will it start to get it better? To answer that fully we need to explore the causes -- but let me give you my personal take up front: I don't think we'll hit the bottom until the autumn, we'll probably bump along the bottom throughout the winter, and providing we get some definition, clarity, and leadership on the post-crash role of the Internet and 3G things should start to lift in the spring.
So how did we get here? Let's be clear about one thing -- the recession that now threatens America and may also spread to Europe and the rest of the world was precipitated by the tech sector itself. Stock market lunacy fed off the unquestioning belief that the Internet had to be at the centre of all tech activity without a clear view of how this would add value for customers, and how this Internet-centric view of the world could be sustained.
The reason that the Internet and tech sector now faces such a deep crisis is not just because the bottom has fallen out of Nasdaq. The smarter investors had been expecting that for two years, and the shrewder ones had already cashed in some of their chips. No, the reason there is a crisis is because nobody believes the Internet is that special anymore -- and if the Internet is not the driving force, then what is driving the tech sector?
This uncertainty hits the order books directly -- since if firms are no longer sure that "Web enabling" their business is a "must-do" priority, then they are going to hold off ordering those servers, ASP deals, and online customer relationship management tools.
Some important lessons about the tech sector's relationship with Wall Street have been learned in the crash, and these will help the tech sector when things start to improve. The Financial Times summed up the most important of these lessons in an editorial last week which carried the headline "Shoot the Analysts". Whilst confusion reigned and the tech sector had clearly lost the plot, Wall Street carried on as if everyone still believed that a clear vision for the Internet still existed, with many analysts continuing to issue "buy" recommendations on stock that had been in freefall for six months, often with real values dropping by up to 90 percent.
In the same article the Financial Times owned up to itself being a little too willing to listen to analysts. ZDNet has been similarly guilty, and we resolve from here on to place more of a priority on seeking opinions from the people who are expected to buy and use technology products, as opposed to those who buy and sell shares in the companies that make them.
But although the stock market has an important bearing on this story, the seeds of recovery won't be found in the square mile. The tech sector must address some fundamental questions itself first -- and top of the list is this one: what is the role of the Internet in business and the home now and into the foreseeable future?
If we are entering a world where multi-platform online experiences and portable data are the drivers -- then how does that connect with the roadmaps for software, hardware and chip development. None of this is clear yet. Microsoft has tried to take a lead and provide a vision with their .Net strategy -- but this is an Internet-centric view of the world and, as has been observed, whether anybody believes the Internet-centric view of anything anymore is open to question.
