recession

IT budgets at midsize firms: A look ahead

Now that the election is behind us, we tech industry insiders can refocus on IT investment. Will the recession lead to massive budget cuts or simply slow IT spending growth?

The situation is dynamic, but some recent data from my company, Enterprise Strategy Group, may point to a relatively soft landing.

In a survey of more than 500 midsize organization, or those with 100 to 999 employees, more than half the respondents said they expect modest growth (i.e. more than 4 percent) in their IT budgets in 2009. The survey was completed in the summer, and certainly things have … Read more

Faced with a struggling economy, the best accessories in life are free

I hate buying accessories for my iPhone; it's totally counter-intuitive. You're saying that I need to buy OTHER stuff to make the phone I just bought more useful? It doesn't make sense to me, and it doesn't make sense to Jeff Staple of Staple Design either.

Check out this iPhone/iPod Touch cradle he made out of a simple binder clip that (let's be real here) you can easily liberate from your company's supply closet! It might take a bit of tweaking with pliers to get the wire to stand up on its own, but I'd rather do-it-myself than give away more of my hard earned money! Actually, now that I'm thinking about it, don't get one, I'm about to make these by the dozen and and sell them all on eBay; watch the first ones go up tonight. How does $10.99 + tax sound? Race you to the patent office!

More pics after the break.… Read more

Innovation and the media

In the past two weeks, there’s been at least a dozen stories in the mainstream and not-so-mainstream media about the importance of innovation in a recession. For businesses, refocusing on R&D and innovation really is a good strategy in down times. There’s plenty of historic evidence to back the claim up (the invention of farming technologies and civil engineering breakthroughs in the Great Depression, alternative energy investments in the early 1970s, and a sharpening of Internet business models after the dot com bust in the late 90s). What’s also true is that writing about innovating … Read more

Welcome to Recession Valley

I spent the last two days in the Silicon Valley talking to IT vendors about the economy, IT spending, and near-term marketing plans. From San Jose to Redwood City, Calif., the ever-optimistic Valley is scared and somewhat frozen.

Venture capitalists are telling their portfolio companies to establish a hiring freeze and hoard cash. More troubling, VCs are running scared from sound investments like Identity Engines and others. In the meantime, large IT vendors are freezing budgets and developing contingency plans. So far, eBay, Qwest, and Yahoo have laid off employees; look for others to follow soon.

It's strange to … Read more

Open-source innovation in a recession

Nat Torkington over at O'Reilly Media suggests that a recession will be very kind to open source as companies seek to lower their IT costs while continuing to service business needs.

I think he's right, and every day I see the proof behind this hypothesis.

For example, I moderated a panel on Thursday with the U.S. Small Business Administration (SBA). The SBA needed a system that would allow it to iterate and innovate even if its budget withered, so it couldn't afford to go with a proprietary system that required new licenses for every change in … Read more

No "Innovation Gap"? WEF ranks U.S. top in Global Competitiveness Report

The United States tops the overall ranking in the World Economic Forum's "Global Competitiveness Report 2008-2009". Switzerland is in second position followed by Denmark, Sweden, and Singapore. European economies continue to prevail in the top 10 with Finland, Germany and the Netherlands following suit. The United Kingdom, while remaining very competitive, has dropped by three places and out of the top 10, mainly attributable to a weakening of its financial markets.

The rankings were calculated from both publicly available data and the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum together with … Read more

Gawker Media to lay off 14 percent of editorial staff

The financial crisis strikes again: Successful New York-based blog network Gawker Media will be laying off 19 of its 133 editorial staffers, according to an internal e-mail from publisher Nick Denton. The company will be additionally suspending its bonus payments to writers and editors, but will be increasing their base pay and making some strategic hires at the company's most successful blogs.

"With the savings, we are increasing base pay and hiring 10 new people on the most commercially successful Gawker sites," Denton wrote in the e-mail. "But I know that's scant consolation for the … Read more

CIOs look to open source to do 'more for less' in tough economy

I've been doing an informal poll recently of open-source companies, asking them how the tight economy is affecting their sales. In every single case, these companies are recording record sales.

It's perhaps not hard to find an answer: open-source solutions tend to cost a lot less than their proprietary counterparts, and provide equal or better functionality.

Open source is not merely about lower software price tags, however. As CIO.com highlights with the Oregon Department of Human Services' attempt to find a new CRM system, the cost of product discovery and implementation also favor open source, in this case SugarCRM:

One of our top system architects came to our rescue when he discovered SugarCRM's application on the Internet and since it was an open-source application he was able to download and install it in a single day. Our customers loved it and since it was an open-source application we were able to make some minor modifications (mostly to screen literals) and have it in production within days. We were also able to download contact information from our mainframes and create a comprehensive partner database.

The bottom line was that when we went live with the HIPAA compliant transactions and code sets almost every electronic filler was ready and there was almost no increase in paper invoice volumes. While the cost savings were substantial the speed in which we able to meet everyone's needs was the big payoff.

Don't believe it? You don't have to--you can download this and other open-source software and try it for yourself. That's one of the most powerful things about open source: it returns choice to the buyer which, in turn, helps to reduce cost, a fact not lost on the Linux Foundation's Jim Zemlin:… Read more

A promising open-source company bites the dust

Ringside Networks was a very cool company - one of the best new open-source companies, as I wrote earlier this year. The company had a dream similar to Ning's - to make social networking-type applications an integral part of a wide array of websites and enterprises.

This past month, however, even as Ning neared 500,000 social networks (at least one of which is not used for porn! Go figure!!), Ringside went down for the count.

Why? How could a company flush with some of the best venture money in the business - Matrix Partners - go under even before it really had a chance to sell into a welcoming market? Bob Bickel, Ringside's co-founder, explains:

We were ready for our Series A round of funding, and in late May we received a number of term sheet offers from the very best VC firms. As we were about to finalize our funding, one of the biggest non-evil Internet companies asked if we would have interest in being acquired instead. After a lot of thought and debate, we decided that the larger company would enable us to get our technology to market sooner and with more impact.… Read more