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Technology

IT Growth: Exponential No More 250

Posted by timothy from the doomsaying-or-duh dept.
BreadMan writes "The Economist has has an article about growth in the IT industry coming off a period of unsustainable growth. Compares IT to growth industries of the past like railroads and automobiles."
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IT Growth: Exponential No More More

IT Growth: Exponential No More

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  • I already knew the edge is coming off technology growth. I wasn't getting paid by my previous employer, and he still owes me about $100 and the title to a moped he gave me in place of $100 pay. This sucks, since it's true and getting worse. I'm only half a year from getting my CCNA and now it seems that's the ONLY way i'm even going to get an entry job, whereas just last year, CCNA was a much desired certification. Sucky.
    • It really does come down to market economics. As the workplace shrinks, what used to be an employees market becomes an employers market - there are more suitable persons per job. Ergo it is harder to get a job, you have to be better qualified in all sense, and you get paid less.

      And there isn't much one can do about. A votre sante and good luck.
    • CCNA hasn't been 'much desired' since 99-2000, it is about the only meaningful entry-level cert these days though.

      And it's pretty easy to get as well, shouldn't take you more than a couple of weeks.

    • The next wave ... (Score:3, Insightful)

      by Taco Cowboy ( 5327 )


      Don't give up yet.

      Although the "electronic bubble" may have burst, dragging with it a lot of the IT-related industries, not all have been lost.

      Remember the railway boom and bust cycle ?

      Well ... after the railway have bust, another cycle began - the vehicles and highway cycle. In fact, it's the trucks and inter-connected highways that have taken lots of businesses from the railway companies that have accelerated the bust of the railway bubble.

      Now, with the bust of the electronic bubble, some other thing
      • Yes, but when the next boom comes, they won't be hiring us Americans. Oursourcing and downsizing have already become a mantra for CIOs and CEOs. Of course, India should do very well, at least until Vietnam and Cambodia get up to speed and steal their lunch in exactly the same way they're stealing ours...

        Sorry to point out the obvious, but the train has already left the station, and we're stuck on the platform. Hey, buddy -- spare a dime?

  • Mis-use of terms (Score:4, Informative)

    by Hao Wu ( 652581 ) on Sunday May 11, 2003 @03:27PM (#5932293) Homepage
    Then maybe the growth was a log function, or sigmoidal.

    But most journalists couldn't care about growth models. To them, anything that is "big" or "fast" is considered exponential.

    • Re:Mis-use of terms (Score:2, Insightful)

      by Makoss ( 660100 )
      I don't think it matters, because from my experiance the average person doesn't know what it means either and just thinks it means "big" or "fast".

      Yes it's annoying that our society caters to the lowest common denominator.

    • please correct your post (Score:4, Funny)

      by SHEENmaster ( 581283 ) <travis&utk,edu> on Sunday May 11, 2003 @04:26PM (#5932538) Homepage Journal
      "Sigmoidal" is not present in "Dumb and Dumber's Fifth Grade Word Looker-Upper" and therefore should not be used in your post. "Exponential" does mean "big big" according to the looker-upper, and "journalists" should be replaced with "writer downers."

      The preceding changs will make your post suitable for reading by the 97% of our society. The remain 3%, illiterate and UNIX Wizards, don't buy stuff; therefore they aren't a usefull part of society and can be ignored.
    • The term "exponential growth" doesn't tell you what the exponent is either. A negative exponent means that things are getting smaller. The buggy whip business had exponential growth in the years after the invention of the auto. It wasn't a happy exponent, it was a sad exponent.

  • uh oh... (Score:4, Funny)

    by Anonymous Coward on Sunday May 11, 2003 @03:28PM (#5932294)
    You mean this powerpoint course I just took won't make me a millionaire?

    Why didn't anybody tell me that you actually need some useful skills to be happily employed in this industry?!

    • Re:uh oh... (Score:2, Insightful)

      by UberDork ( 235964 )
      Ummm... Because you don't?

      The one thing I am seriously looking forward to is when the industry 'matures' *cough* so that the various used car salesmen and those who think they know what they're doing move on and let those of us who do get on with it...

      Anyway... I have to go and install a new graphics card in my file&print server - the old one is just way too slow.

  • this is a rehash. (Score:2, Insightful)

    by AvitarX ( 172628 )
    The Economist published the same thing during the peak of the boom (late 90's) saying it was going to end and had a chart of overlaping curve of railroad automobile blah.

    The chart was of the derivitaves of total size (a chart of growth) so they looked like bell curves, or maybe upside down purabalas<sp> and not S's but I have a distinct memory because it was at that moment I realized that if I took CS in college I would be getting out just as the job market was impossible (this year).

    Not that I want

    • Re:this is a rehash. (Score:5, Funny)

      by Anonymous Coward on Sunday May 11, 2003 @04:12PM (#5932490)
      purabalas?!?

      PARABOLAS.

      I appreciate the humor that this unbelievable misspelling was followed up 2 sentences later with "Not that I wanted to go to college anyway".

      Sure, buddy. You didn't want to.

  • Linux : The Nest Great Surge (Score:5, Insightful)

    by maharg ( 182366 ) on Sunday May 11, 2003 @03:30PM (#5932304) Homepage Journal
    The article talks about IT in terms of HARDWARE - Moore's Law - i.e. the doubling of processor speed every two years.

    A neat graph shows the typical lifecycle of any technology from 'irruption' (sic) through to 'maturity', closely followed by the 'next great surge'

    LINUX - THE NEXT GREAT SURGE !

    • Re:Linux : The Nest Great Surge (Score:5, Insightful)

      by koh ( 124962 ) on Sunday May 11, 2003 @03:35PM (#5932330) Journal
      In our case the "next great surge" would be the handhelds and wireless technologies, which will represent the major IT knowledge investments in the upcoming years... until the bubble pops again.

      Time to get back hacking this GBA again.

    • Irruption - Yup, it's a real word (Score:4, Informative)

      by Anonymous Coward on Sunday May 11, 2003 @03:39PM (#5932352)
      When I saw it, I looked it up [reference.com] and it's for real. From reference.com [reference.com] :

      \Ir*rup"tion\, n. [L. irruptio: cf. F. irruption. See Irrupted.] 1. A bursting in; a sudden, violent rushing into a place; as, irruptions of the sea.

    • Don't forget about "Gate's Law." Not that Mr. Gates said it, but M$ software seems to double in size and complexity and clock cycles every year and a half, or so. Office XP takes just as long (or longer) to start on a new computer today as Wordperfect for Windows took to start on a new computer in 1996.

      GNU/Linux distributions seem to get bigger and bigger as well. However, Redhat 9 takes about half the time to start as Redhat 8.0 on the same machine (running the same services) as does Mandrake 9.1.

      Back

    • Re:Linux : The Nest Great Surge (Score:5, Insightful)

      by Gorobei ( 127755 ) on Sunday May 11, 2003 @03:57PM (#5932431)
      Sorry to burst your bubble, but Linux isn't the next great surge - it's the maturity part of the curve. It's an open, stable, commodity technology that can be used by anyone that wants a low-cost solution to some business problem.

      Think railroads - Linux isn't the high performance locomotive that lets you get a jump on your competition, it's the national transportation network that lets you ship stuff from A to B without paying exorbitant fees or risking your business on a monopolist's whim.

      • And it's steam powered. I can't wait for the computing equivalent of Diesel. What would that be? Massive parallelism? Optical computing? Quantum computing? And you just know there will be people bemoaning the death of server racks. They'll be replaced by toaster-sized spread spectrum wireless boxes containing more computing power than the NSA has currently. They'll consume less power than a toaster too. Guys in their 70s will be maintaining authentic rack server rooms, complete with dot-com T-shirt

    • Excuse me?

      You're saying that Linux will be the thing that will bring IT out of the depression?

      Only way to end depression in a sector is increase amount of money in sector (usually this happens when demand increases, this leads to increased prices with leads into increased income.)

      Linux is being marketed as the great cost-saver. When costs are saved because of Linux companies decrease their IT budget meaning less money into the IT sector.

      Unless anyone wants a coffeecup with embedded Linux no growth is go
    • A neat graph shows the typical lifecycle of any technology from 'irruption' (sic) through to 'maturity', closely followed by the 'next great surge'

      Irruption is the correct word. If you were thinking "eruption" then that's a mistake.

  • One problem with the article (Score:5, Insightful)

    by sjofi ( 307114 ) on Sunday May 11, 2003 @03:38PM (#5932346)
    What bothers me is that they assume that "IT" is one technology. In fact it is several, and I'd assume that most of them have not been discovered. It's not that long ago when Internet wasn't in the radar of The Economist reporters...
    • Interesting how view points shift over time now isn't it?

    • Re:One problem with the article (Score:4, Insightful)

      by praksys ( 246544 ) on Sunday May 11, 2003 @05:12PM (#5932745)
      I think this is right. For example, the article compares the IT industry with certain parts of the transportation industry (rail, auto), rather than with the transportation industry as a whole. If you look at the industry as a whole then you see a long series of exponential bursts as new technologies appear on the scene (steam shipping, container tech, rail, auto, air, and so on). Still if you take that into account then what they are saying might still be very significant. If they are right then all of the tech's that make up IT right now are looking at a period of flatter growth (i.e. PC's, networks, the web, and everything else that we now think of as IT). We may not see exponential growth again until a new innovation comes along that is qualitatively on the same scale as the invention of the web or the PC.
      • Not precisely true. When the cost of a PC drops enough, then China and India will experience exponential growth... probably within about 5 years. Of course, then doesn't help those who live in the US or Europe very much, but givent the population size, it will be another very significant burst of exponential growth without a dramatically new technology.

        The signs seem to show that India is teetering on the edge right now. China is more opaque to me, but I would put them a few years farther up the curve,

    • Re:One problem with the article (Score:5, Insightful)

      by Surak ( 18578 ) * <.surak. .at. .mailblocks.com.> on Sunday May 11, 2003 @07:58PM (#5933475) Homepage Journal
      No, but with continual convergence of technologies, it's quickly becoming one. Cell phones are becoming like PDAs, PDAs more like cell phones, computers are becoming largely useful as communication devices, and communication devices are becoming largely useful as computing devices.

      By the end of this decade, computers and networks and communications devices will become so converged and so ubiquitous, you won't be able to tell them apart, and, more importantly, it won't even matter.

  • No surprise here... (Score:5, Funny)

    by Anonymous Coward on Sunday May 11, 2003 @03:40PM (#5932356)
    People can only view so much porn..

  • Big News! No body cares about computers anymore! (Score:4, Insightful)

    by makoffee ( 145275 ) on Sunday May 11, 2003 @03:42PM (#5932365) Homepage Journal
    Yes it's back to slide rule for you. Computers just didn't work out, so now we're just going to give up on them entierly.

    Whatever, the world will continue to cram computers into more and more random devices and network them all together. Can your tivo talk to your cell phone? It should, and I'm sure one day it will. And all along the way there will be companies doing such things, making a lot of money in the process.

    So don't give up on the IT market just because you can no longer find a job as a Novell admin anymore.

    Chin up slashdoters.

  • 1 transistor per processor (Score:5, Funny)

    by Hans Lehmann ( 571625 ) on Sunday May 11, 2003 @03:49PM (#5932393)
    According the graph (supplied by Intel), processors back in 1960 had one transistor each. They probably didn't have a very extensive instruction set.

  • productivity gains (Score:5, Insightful)

    by SpookyFish ( 195418 ) on Sunday May 11, 2003 @03:49PM (#5932397)
    Sure, explosive growth isn't going to continue in any industry that has reached relative maturity. It's far from doom and gloom, however, and the article doesn't discuss one of the most important effects of IT buildups.

    While there's no question much of the economy's boom was based on hype, there are still real, bottom line reasons for strength -- and numero uno, IMHO, is the strong growth in productivity. IT-related expenditures get a lot of credit for this growth.

    Railroads and automobiles aren't fair comparisons, because they are essentially 'fixed-function.' Once you can ship things anywhere inexpensively, what else will drive railroad growth? "A little faster" isn't a fundamental change. Unlike these examples, IT infrastructure is constantly evolving, adding new ways to increase productivity.

    For example, "B2B" exchanges are no longer flashy, but still growing like crazy and boosting efficiency. There are many other applications with strong potential but currently limited real-world usage, such as e-learning, knowledge management, and video conferencing -- and plenty more great ideas still being dreamed up.

  • Bla Bla Bla (Score:3, Interesting)

    by Anonymous Coward on Sunday May 11, 2003 @03:53PM (#5932417)
    I'm getting about as tired of these stupid on-again off-again IT economy articles as I am about my hotmail spam telling me I can increase my manhood safely and naturally.

    Hey, guess what: The economy sucks right now, things in general are nearly stagnant, and we're still making up for the excesses of the "dot-com era".

    It's gonna be a couple of years at lest until the IT field picks up again. It will pick up again, and it will continue to be a viable industry with good paying jobs for people with knowledge, skill, and experience. Will it ever be as good as it was in the 90's? Probably not... but who knows... There are a lot of things on the horizon that could have dramatic effects on our economy... some good, some bad (I'm speaking for the U.S.A.; not sure about other places.).

    One thing in particular that comes to mind as a GOOD effect is the Fair Tax Initiative ( http://www.fairtax.org )... The Fair Tax Initiative has been around for several years now, but more recently, it has been formally brought up as a recommendation to President Bush by his economic team, and while he did not say if he thought Fair Tax was the way to go, he did say that he thought the Federal Income Tax System was broken beyond repair...

    The reason I mention this is due to the flood of IT jobs overseas... Why is that I wonder?

    Think about this: the USA has THE HIGHEST corporate taxes in the ENTIRE WORLD. Who do you think gets stuck actually paying for those taxes (in one form or another)? The corporations? Hah... on paper, yes, but the cost is passed down to the consumers and to the employees by way of higher prices, lower wages, lesser benifits, etc.

    If something the the Fair Tax were to pass here in the US, people would have to HIDE in order not to find jobs... prices of goods would go down, people would have more power over where their money went, and best of all, (as the name says) the TAXATION WOULD BE FAIR! There's quite a lot to the plan... and it really would be an amazing thing with nothing but positive implications to our economy...

    Yeah... so that was quite a tangent... anyway... the point is, these kinds of articles are repetitions, short-sighted, and suffer from severe tunnel vision, as there is certainly more to "predicting" the future sucess or failure of an industry than just looking at timelines of other industries. There are MANY factors that contribute to the economical outcome of one thing or another. An economy is much like an ecosystem... one can't say that they think a specific species is going to die out in another X years, just because a completely different species did the same thing several decades ago... there are just too many contributing factors for one to make an accurate prediction. Articles like this are basically just FUD... and it seems like every time some dope wrights one up, it makes its way to slashdot... go figure.

    Oh yeah, and go to http://www.fairtax.org :-)
    • The reason I mention this is due to the flood of IT jobs overseas... Why is that I wonder?

      Think about this: the USA has THE HIGHEST corporate taxes in the ENTIRE WORLD. Who do you think gets stuck actually paying for those taxes (in one form or another)? The corporations? Hah... on paper, yes, but the cost is passed down to the consumers and to the employees by way of higher prices, lower wages, lesser benifits, etc.

      Sorry, no. Taxation has little to nothing to do with the phonemenon of IT and engineerin
      • Sorry, no. Taxation has little to nothing to do with the phonemenon of IT and engineering jobs moving overseas. It's all because of the difference in cost of living.

        Well, taxes are part of the cost of living.

        When the government charges companies an excessive amount of money to do business in a particular country, companies go elsewhere -- and they take their jobs with them.

    • I can't tell if this is a troll or a plug.

      In any case taxation is not the issue. Enron didn't pay taxes for years during the 90s. Taxes are not an expense, they are based off of your profit and/or the value of your capital resources.

      Companies that are "fleeing" the United States for the third world are going to "flee" those countries once they are sufficiently developed and start demanding services. Hong Kong and Taiwan are now too rich for corporations, so they are tearing up stakes and moving to Indon

    • I skimmed the site. It looks like a VAT, which they have in the UK in Europe. I'm not sure if the VAT is UK/EU's only source of taxes. However, even if we made a VAT our only source, it's not going to be some kind of magic cure-all. Granted, it would be nice not to worry about going to jail because you misunderstood Title 5, Section 4, codicil 2a, subsection 2, paragraph B. Otherwise, it won't help us that much.

  • OK, maybe this is true... (Score:4, Interesting)

    by pygeek ( 649716 ) on Sunday May 11, 2003 @03:57PM (#5932430)
    So a lot of people will go unemployed, some businesses go broke. So what? It helps weed out all the fakes, all the "in-it-for-the-big-bucks" jerks.

    I'm a computer science student, and I can't begin to describe just how many people are looking to get into this field just for the money. More than 90 % of my fellow students hate programming. No, I'm not exaggerating.

    I myself love programming and learning new things about computers and related fields, and I don't care at all about the money. I just love computers - and for people like I hope there will always be jobs

    • Re:OK, maybe this is true... (Score:5, Insightful)

      by Tekman3 ( 672289 ) on Sunday May 11, 2003 @04:33PM (#5932565)
      You remind me of me back when I was in college. Just mainly wanted to do it because I loved programming. Most of the other people in my class just wanted "easy money." The majority of them did only the minimal amount of programming needed to pass whatever class they were taking at the time. The really sad part is that even thogh you may not be "in-it-for-the-big-bucks" you can bet just about anyone else in the software industry is. In one talk with a former IT manager, he scorned my reasons for being a programmer and was flabergasted that I didn't care about is mult-thousand dollar bonus, he was planning to get upon the projects completion. If you just love to do programming, you really don't need college for it. Looking back on my college days, I feel like I got scammed. Most of what I learned was on my own, between work and classes. The college degree is a costly ticket to IT slavedom, where your day is spent making some jerk at the top rich. My advice to you is work a good-paying day-job and program in your sparetime doing open-source or something that helps your day-job. The ideal setup would be to own your own business and do your own web development and information management.

      • If you just love to do programming, you really don't need college for it. Looking back on my college days, I feel like I got scammed. Most of what I learned was on my own, between work and classes. The college degree is a costly ticket to IT slavedom, where your day is spent making some jerk at the top rich.

        Unless you go to college, or study textbooks of good CS colleges... AND you want to get "higher on the work ladder", you have no business being in a programmer.

        The college degree is to teach you a b

    • The great thing about being into the deeply technical side of computers, especially down at the level of assembly and below (into the hardware, that is) is that your basic principles will always be useful, and there will always be something new to learn. Further, you can always learn at your own pace, and from the bottom up or the top down, or someplace in the middle to both ends.

      Also, sites like slashdot (and also others with less dupes :), but also less personality and certainly less discussion) have br

  • BS (Score:5, Insightful)

    by vsprintf ( 579676 ) on Sunday May 11, 2003 @03:57PM (#5932433)
    The IT industry is still growing. It's just growing in third-world countries, so greedy CEO's who are already obscenely compensated can pocket even more by using sweat-shop labor. (Think textiles and the garment industry - nothing new.)
    • Assume, for a moment, that you are the CEO of Multibillion Dollar Corporation (MDC). Your Software product is entirely "manufactured" in the US. You employ about 5000 programmers/IT workers etc, getting an average of $100,000 per year(including benefits). That is a 500 million dollars per year payroll.

      Your main competitor has all the design and the "core" work done in the US, and has the raw implementation done in India, China, Russia or the Philippines. He employs 100 people in the US at $150000 per year,

      • If I were CEO of "MDC", I'd be scared to death of sending my IT work into the hands of people who hate the U.S. and wish my company would go up in flames. I'd lie awake at night worrying about my data being compromised, my trade secrets stolen, and exploits being built into the company's applications. I'd be wondering whatever happened to loyalty and to all the people I RIF'd who built my company and are now in the unemployment line because I'm offshoring their jobs.

        Your competitor is able to make his p

  • Blame it on Microsoft (Score:4, Insightful)

    by falsification ( 644190 ) on Sunday May 11, 2003 @04:02PM (#5932452) Journal
    Well, guess what, the IT industry is stalled. I guess Microsoft's argument in the antitrust suit is now shown to be the sham it was. "Oh, the industry is constantly innovating. Even 95% market share is not likely to last long." It's lasting long, and it's putting a chokehold on the entire industry.

    When was the last time Microsoft released a new version of Internet Explorer? I believe it was back before they had 90% or more market share. Hmm. What a coinicidence.

    When was the last time that Microsoft significantly improved their desktop OS? That would be Windows 95. Back when Microsoft was facing competition from OS/2 for that business.

    When was the last time that Microsoft significantly improved their server OS? Well, you can debate that one, but it's obvious that Microsoft even today faces stiff competition from Linux, BSD, and other Unix variants.

    And speaking of lack of competition, we all know the real reason why fiber to the home (the last mile) is taking so long: local telephone monopolies. This is true in the USA and in other countries. Once people can get fiber to the home, the so-called "bandwidth glut" will disappear in a hurry.

    There is a lot more innovation that can take place. The biggest area IMO is wireless. The small, handheld wireless device market is certainly not mature. One of the things to look for is cell phone/PDA convergence, which hasn't been done sufficiently well yet. It's not just all-in-one devices, however. We should also look for new functionality in devices.

    Content distribution is still the toughest business. Unless you have a world-class product like the Wall Street Journal, it's difficult to charge money for information. The best solution is to sell not just information, but add on something else. This something else could be a service like ad-blocking or a set number of minutes of professional advice or consulting, or a tangible product like a poster or a toy. Don't just sell Harry Potter on the web. Sell a bundle of a Harry Potter book together with a unique poster or action figure. That sort of thing.

    In short, the future is very bright. Microsoft's monopoly will not last forever, even if the US government refuses to do anything about it.

    • When was the last time Microsoft released a new version of Internet Explorer? I believe it was back before they had 90% or more market share. Hmm. What a coinicidence

      No, it was IE6...issued long after Netscape had lost its foothold.

      When was the last time that Microsoft significantly improved their desktop OS? That would be Windows 95. Back when Microsoft was facing competition from OS/2 for that business.

      Win98 was a huge improvement over 95...but ME was deffinately a step back...but do you really thin
    • I don't think you read the article.

      The article basically supports Microsoft's claim. Technology goes in phases.

      IBM was the Mainframe phase, DEC was the Mini phase, and Microsoft/Dell road the PC phase. Each of these companies have had their Golden years, followed by a plateau, or in the case of DEC a major decline.

      The problem is you are still thinking in terms of the PC Phase and worried about Microsoft there. What you need to be doing is trying to uncover what the next big thing is, because that's wh
    • Right now the free market is saying. OK obviously the government is interested in the status quo (if you don't believe this I won't try to convince you). The status quo works for very few people these days. Therefore the market will cross it's arms and not do crap until everybody is poor, even Bill Gates. Watch the personal wealth/power distribution drop from 99%/1% to 90%/10% or more again. Antitrust didn't stop the railroads and Oil. New technologies and a cost cut inspiring depression did. Railroad

  • News? (Score:3, Insightful)

    by rumpledstiltskin ( 528544 ) on Sunday May 11, 2003 @04:03PM (#5932457) Homepage Journal
    Shouldn't this have been news about 2 years ago?

  • Hypocritical (Score:5, Insightful)

    by Bombula ( 670389 ) on Sunday May 11, 2003 @04:03PM (#5932458)
    I find it hypocritical that the Economist singles out the IT industry (without defining IT at all) for 'unsustainable growth'. Can someone name me an industry with indefinitely sustainable growth potential? Given that western societies are wholly dependent upon growth-based economies, it seems to me that the real target for criticisms of unsustainability should be growth-based economics itself.

    • I find it hypocritical that the Economist singles out the IT industry...

      That's odd because I could have sworn that the even the summary said that the Economist "Compares IT to growth industries of the past like railroads and automobiles." In other words they did not single it out. What they did was point out that IT was very much like a bunch of other tech industries that have been through periods of exponetial growth.

      I know that RTFA is too much trouble for most people, but do you really have to skip t
    • Economists calling growth unsustainable is usually slang for "it's too much too quick". Economies don't grow linearly -- they have the weird phenomena of surging & contracting (boom/bust) over years. This is an observable phenomena related to the impefection of all economic systems, being made up of imperfect humans, after all.

      This kind of cycle probably would continue to happen no matter what kind of economic policy you subscribe to, so I really must wonder, what's hypocritical?

  • Mistake (Score:2, Funny)

    by Ryan Stortz ( 598060 )
    I think they have the date wrong, it should be may 8th 2000.

  • exponential incompetence (Score:3, Informative)

    by g4dget ( 579145 ) on Sunday May 11, 2003 @04:41PM (#5932602)
    "Exponential growth" just means that something grows as k^t for some constant k, and just about everything does. Your checking account grows exponentially, even though you probably only get 1% interest: after t years, you have 1.01^t dollars, or about 2^(t/70) dollars, if you like.

    Most mature industries grow exponentially because they grow with the economy as a whole. Any economist that would propose that the economy not grow exponentially would be lynched by politicians--our whole economic system assumes that we can sustain at least modest exponential growth indefinitely (whether that is reasonable is a different question).

    The IT industry will continue to grow exponentially, just like almost any other sector . What it won't do is have growth rates that exceed that of the economy as a whole. That is probably what the Economist means.

    The Economist just lost a lot of credibility in my eyes: misusing the term "exponential" in this way is something that just shouldn't get past the editors of any publication that claims any competence in economics.

    • Growth appears as exponential because real costs like damage to the environment are not factored in into the calculations of growth.

      If this was factored in most probably the growth of any economy long term wold be a resounding 0.

  • Economist's imbalanced perspective (Score:5, Interesting)

    by stanwirth ( 621074 ) on Sunday May 11, 2003 @04:42PM (#5932613)

    IT is not one industry or one technology, and I have personally survived two prior boom/bust cycles in IT, both undiscussed in the Economist article. First it was mainframes, then it was workstations, this one it was PC's, and sure, if we follow that trend, the next wave will be PDA's, but not as we know it.

    Each wave involved computers that were roughly as powerful as those of the previous generation. When workstations could do the work of mainframes, workstations were the cool new thing, and there was a major shake-out in the mainframe sector, while the workstations took some time to get going, and the big iron was relegated to do things that only big iron could do (eg handle big databases, MSRP systems, billing systems, etc). Then workstations and mini-mainframes (starting with PDP-11's, VAXen, then on to Sun, Appollo, SGI...) were king for half a decade. Remember the anti-trust suit against IBM? Remember when DEC pulled out ahead of IBM? Kinda like Linux starting to pull out ahead of Windows during the anti-trust suit agains MS. Same s**t, different decade.

    After the crash of '87, a lot of the startups in silicon valley that were writing software primarily for Sun and SGI workstations started seeing their marketshare get gobbled up by the rise of the PC Clone -- which offered a much cheaper OS (DOS) and much cheaper hardware to do it on. While the applications that used to run on big iron have been moved first to the ever more powerful UNIX servers in the back room and are now being moved onto PC's running Linux...because they can.

    Can we extrapolate the trends we saw in the last two boom/bust cycles and say that the next wave of innovation will be PDA's with an easily programmed OS (symbian?) talking to servers running linux at the home office or corporate HQ? Sounds good to me.

    Right now the name of the game in the last gasp er I mean "deployment phase" of the current wave is "Pick up the Pieces" (Brecker Brothers' wailing in the disco in the background).

    In more specific terms this means: Data auditing, database integration, data forensics, data security and data warehousing.

    • Data auditing for all those firms that are trying very hard not to crash and burn in an Enron-like blaze.
    • Data auditing for all those firms now subject to far stricter regulatory regimes-- for financial firms, in their accounting data, and for pharmaceuticals, in their FDA compliance.
    • Database integration for those firms that bought up the dregs of the others.
    • Database integration to pull together data from different state and federal agencies for tracking criminals and terrorists.
    • Data forensics for doing the background work necessary to do the aforementioned database integration.
    • Data security -- well because hackers be.
    • Data warehousing to pull all the pieces together into an integrated picture of the whole. Ever see a business analyst try to do a join between two multimillion-row tables in Access? It's a real hoot.

    But being able to access your company data over a secure connection with your PDA -- it's sort of happening now, but, extrapolating from the trends of the last two waves, this would logically be the next one. PDA's are where PC's were 10 years ago, PC's are where workstations were 10 years ago, and workstations are where mainframes were 10 years ago. "Where" as in terms of size, functionality, maturity of the code base, special security, power and AC requirements -- and, consequently, where they sit in organisations.

    Seems logical, but then, a lot of things do.

  • We all knew this didn't we? (Score:5, Interesting)

    by darrowj ( 672224 ) on Sunday May 11, 2003 @05:02PM (#5932698)
    Wasn't it nice to get rates of $300 an hour?

    Have a company sign a contract to spend 6 million dollars on a web site?

    Allow 40% of our project to fail?

    I think it is about time that we realized that business is business and we aren't that special. Either we make money for people, one way or another, or we don't work. I don't think this is a bad thing. I think this is an opportunity to step up and honestly make the world a better place with IT. The free ride is over and it has gotten and will get ugly. However, this is my career and I'm not turning back. I have invested too much of myself in it to let it go.

  • Actually (Score:4, Insightful)

    by xihr ( 556141 ) on Sunday May 11, 2003 @05:08PM (#5932721) Homepage

    In this case it may simply be demand outstripping supply. Computers today are really, really fast. The constant pressure to get the latest and best machine is no longer anywhere near as strong as it used to be, since for almost all applications, computers are "fast enough." (The main industry still pushing the envelope is, of course, the gaming industry.)

    For the last few years, Intel and the other chip manufacturers have been starting to falter, probably because people are really coming to realize that they don't need the latest and greatest chip to do what they need to do. So the slump may be simply due to economics rather than hitting some kind of technological plateau.

    • Computers today are really, really fast. The constant pressure to get the latest and best machine is no longer anywhere near as strong as it used to be, since for almost all applications, computers are "fast enough."
      Actually, you hit on one point of the article-- in our terms, there is no "killer app" driving the next leap in technology.

      Each technology generation, even if it is all about chips, is a different product cycle. It could be reasonably argued that the lifecycle of the individual generations is

  • IT became a commodity twenty years ago (Score:3, Interesting)

    by Animats ( 122034 ) on Sunday May 11, 2003 @05:20PM (#5932781) Homepage
    For about 20 years, you've been able to buy PC clones. DRAM has been a commodity for decades, too. Software has more market segmentation, but UNIX variants (Linux, BSD, SCO, whatever) are a commodity.

  • What is not taken into consideration (Score:5, Insightful)

    by nate nice ( 672391 ) on Sunday May 11, 2003 @05:38PM (#5932863) Journal
    ..is that you're foolish to beleive that a job as a programmer or engineer is going to be really hard to find. If you are low skilled, say just a Java programmer or something like that...you know the type, then sure, it may be bleak. But think about all the devices that are out and even more coming out that need EE people to make, programmers to program etc. Perhaps being a network guy or sys-admin is going to be harder to come across but I think the future is going to be even greater for programmers, at least programmers with a good foundation such as a CS degree or by someone who is enthusiastic and self taught.

    Think about it, PC's will soon be the smallest market for IT, so if your career is based around writing business apps or PC related software then you may be in trouble. But with so many things going digital, there will be greater demand for people to make these systems, and they will be complex systems.

    Although the job market is trash right now for IT, it is trash for just about everything else, except maybe a bankruptcy lawer.

    You log onto a site like dice or monster and you see thousands of jobs. The only problem is these jobs demand skill and knowledge. Real knowledge, not the kind that a certifcate from a 5 month program gives you.

    I hope I don't come across as a troll, but seriously, most of these certificates A+, MCSE etc are nothing more than going to a factory and reading a really long manual on how to operate a machine. We need people for this of course, but don't expect to be paid well for it anymore as we have found out that anyone can do this if they are willing to put a few months effort into it.

    Go back to school right now and learn something real. If not, at least go to the library and read some hard material, the kind that takes a while to learn. These are the types of people needed desperatly right now. People are having a terrible time sifting through the people who can actually solve problems that are defined with the domain of their limited skill set.

    I don't know, just some thoughts, but did you really think it was going to last? Eaasy come, easy go goes the saying. I'm convinced if the unemployed IT "professionals" took time off to learn some things, like how a computer really works, they would see the rewards. Then again, nothing is guarenteed and I need as little competition as possible to keep my wallet fat.

    We talk about the need for robust software, well become a robust programmer. Don't paint yourself into a corner by putting it all on X technology. Learn the foo and you can adapt to anything.

    • We talk about the need for robust software, well become a robust programmer. Don't paint yourself into a corner by putting it all on X technology. Learn the foo and you can adapt to anything.

      I've been a software developer for the last 10 years. I got my degree in Mathematics (discrete emphasis), took some general electronics classes (basic digital and analog classes), foundation computer science stuff (algorithms/data structures, assembly language, sw engineering). I pride myself on being adaptable -- I'v

  • IT growth (Score:4, Insightful)

    by ginnocent ( 593658 ) on Sunday May 11, 2003 @05:49PM (#5932911)
    For the love of god, it's only a week or so since we had an identical thread under a similar name. JUST DEAL WITH THE FACT THAT CLAIMING SOME UNDERSTANDING OF 'NET TECHONOLOGY IS NO LONGER A PATH TO INSTANT RICHES. YOU CAN STILL DO OK IF YOU WORK HARD, BUT THE GOLD RUSH IS OVER, GOT THAT?'. OK, now that's out of my system, can the people who don't really enjoy working late to solve logic puzzles please leave the profession, whilst the rest of us pay our mortgages they way we always planned?

  • Hogwash (Score:5, Insightful)

    by the eric conspiracy ( 20178 ) on Sunday May 11, 2003 @05:54PM (#5932940)
    The sky is falling etc.

    Guess what, we are in a nasty recession. ALL capital spending is way off. Businesses spend money to increase capacity when growth is strong. No growth, capacity underutilization etc. means no need to increase capacity through either productivity or staff improvements. IT accounts for something like 20-30% of capital investments.

    When the economy starts growing again people will start being in short supply (unemployment overall is a relatively low 6% given the severity of the recession) soon. The only way businesses will be able to increase capacity is through capital investment. During all this Moore's law has been chugging along and those new systems will be 10x+ faster (and getting 64bit CPUs in commodity hardware allowing manipulation of massive data sets cheaply) than what the business has been using, and software to take advantage has been getting better too, making upgrades very cost-effective. Businesses have also been amassing mammouth quantities of data in electronic form in the meantime because of their previous investments.

    Moore's law doesn't tell the whole story by far. Data storage capacity and network bandwith are increasing at rates far faster than Moore's law. CPUs are relatively mature by comparison, ONLY doubling every two years or so. Hard disk bytes/$ doubles every 9 months, and network bandwidth is tripled every year.

    The confluence of trends is obvious, and somebody is going to make a lot of money tying all this together.

    The IT good times will roll again soon enough. When it happens you won't be able to outsource to China or India because they will be caught up in it too. Companies who outsourced their IT will find that the new crown jewels of productivity will be beyond their grasp and they will relearn the hard lesson that you DO NOT outsource core business activities if you want to maintain control of your fate.

    • The technologies that will revive tech sector (Score:5, Interesting)

      by MtViewGuy ( 197597 ) on Sunday May 11, 2003 @07:37PM (#5933409)
      I think there will be these technologies that will revive the tech sector:

      1. IPv6. Let's face it: using routers, subnetting, etc. to extend the life of IPv4 addressing can only take you so far. With more and more devices being Internet-accessible, the massively-larger pool of IPv6 addresses will make Internet connectivity of your home entertainment center, home office and various home appliances much easier, not to mention giving IP addresses to your various handheld devices! The problem is that many of today's installed routers and Internet backbone wiring are not ready to support IPv6, and it will require lots of hardware upgrading (and also software upgrades) to get IPv6 support on a wide scale.

      2. 3G cellular telephones. Today's latest picture-enabled cellphones are only beginning of things to come; we will eventually include true broadband (384 kilobits per second data transfer rates and faster) over standard cellphone networks, which could end up competing with 802.11b/g wireless connections but 3G could offer more reliable connections with less issues of interference. Again, there will be a need to upgrade the cellphone infrastructure to support full broadband 3G operations.

      3. High-Definition TV. We're only beginning the rollout of 720p/1080i digital television with picture quality far superior to today's NTSC standards. By 2010, 720p/1080i 16:9 aspect ratio digital TV signals will be delivered by over-air broadcasts, through your cable line and through small satellite dishes all over the USA on a large scale. Again, this will require large-scale sales of new 16:9 aspect ratio TV sets, sales of new hardware to support upgraded TV broadcasting infrastructure needed for HDTV, and new production hardware sales (cameras, video recorders, video editing facilites, etc.) for broadcasters to handle HDTV.

      In fact, by 2010 people will be wondering how quaint IPv4, voice only cellular phone, and NTSC-standard 4:3 aspect ratio TV are. =)
      • 1. The cost of switching over (and doing away with IPv4) is enormous, and it will be a long time before that cost is less than losses due to overextension of IPv4. Look how long it took us to get away from things that have ZERO cost of switching over, like waiting for people to upgrade from Netscape 4.

        3. HDTV is the textbook case of the chicken-and-egg problem. Not only that, there's really no reason to switch over to it. What can you do with HDTV that you can't do with NTSC? I don't mean just increase t

        • Re:The technologies that will revive tech sector (Score:4, Insightful)

          by alecto ( 42429 ) on Sunday May 11, 2003 @08:22PM (#5933552) Homepage
          What can you do with HDTV that you can't do with NTSC?

          And, in the same vein, with all the digital restrictions management and fair-use prevention technolgies coming down the pike, what won't you be able to do with HDTV that you can do with NTSC?

        • The big issue now with HDTV is the cost of the viewing monitor itself. Decent monitors that can play back 720p/1080i HDTV signals are still costing well over US$1,200, which limits the audience for HDTV for now.

          However, I expect the transition to 16:9 aspect ratio monitors to accelerate over the next 36 months, which will finally get the critical mass to make HDTV really viable. After all, it took over three years for DVD's to reach critical mass in terms of popularity; the acceleration of DVD acceptance b

  • Pent up demand (Score:3, Interesting)

    by malia8888 ( 646496 ) on Sunday May 11, 2003 @05:55PM (#5932950)
    We fix computer systems for small businesses. This gives us a very grass roots look at the demand for all IT products from networks to one free-standing PC.

    There are many companies here just waiting for a few extra bucks in the bank to upgrade both their hardware and software.

    So, IMHO the slow down in the biz is due to a pathetic economy since we changed presidents. In the Clinton years the U.S. economy had money to burn and a fat surplus. Now our people are practically burning furniture to keep warm and living off credit cards in deficit land.

    Moore's Law would still be cooking if we had money. As soon as there is a little cash in the drawer our customers are going to be upgrading.

  • I disagree.. (Score:4, Informative)

    by marcushnk ( 90744 ) <senectus@gmaiCOWl.com minus herbivore> on Sunday May 11, 2003 @07:36PM (#5933402) Journal
    For Australia at least..

    In Australia companies have been trying to cut costs in It for about a year and a half now.
    You can only do that for so long before you run the risk of having your company fall so far behind that it will never recover (or you have to spend too much to recover).

    I believe that companies in Australia will stop out sourcing and start spending large on IT internally very soon.. in the next 6 - 12 months at least.

    I reckon we're about to see the second big rise of IT in Australia, right on the heals of broadband and "free to air" wireless networks..

  • Bah, that's nuts! (Score:3, Funny)

    by SCHecklerX ( 229973 ) <greg@gksnetworks.com> on Sunday May 11, 2003 @09:08PM (#5933746) Homepage
    The radio ad that plays about 20x a day on my way to work and back home tells me I can make over $70,000 a year if I take their classes and become a Microsoft Certified System Engineer! So how can things not be growing?

    You guys don't know what you're talking about! Computer jobs are easy money, all I gotta do is spend a few thousand dollars and in a FEW MONTHS (not 4 LONG YEARS for a degree) I'll be rolling in cash!

  • ...can have one. I was just looking through my supplier's price list yesterday, looking to set up a low-speed computer, to server as a mail server/movie player/router. A 1.1ghz duron/256mb/20GB costs a touch over $130, and that's here in Poland, where the prices are much higher than in the USA. This is for brand new equpiment, you could probably pick up something used for a bit less. Sure, there will always be families and individuals who have a hard time saving up $130, but for 99% of us it's just a matte
  • From my understanding the industry at some point needed a lot of low-skilled IT people. Hell, they even hired people that majored in Latin Literature if they knew a bit of HTML. Another point to be made is what they consider IT. There are the following segments nowadays:

    Web Design and Internet application software that is used in a specific market niche, such as for example online bookstores. In this market there is usually a strong emphasis on Databases and general Software Engineering skills. Relationshi

  • Why do economists... (Score:3, Insightful)

    by olethrosdc ( 584207 ) on Monday May 12, 2003 @03:37AM (#5935097) Homepage Journal
    insist on being able to understand everything after the event? They always are able to find patterns _post facto_. Hey, I can do that too... the fact is that economists have never ever managed to predict anything - their predictions have been worse that those of seismologists.. they rely on naive prediction methods, simplistic 1 or 2-variable theories and childish 'cycles' to explain things. Cycles must exist, since growth is not constant, but they can neither explain them nor predict their duration. Just making fancy curves and putting cool names on the graph proves nothing.

    And for those of you that would like to say that The Economist had a similar article during the boom, I have to counter that they have published conflicting articles during the same period. Economists have varying opinions, which are anyway never based on any solid evidence. They are just hunches. I trust my bookmaker more.

  • buddy, can you spare a dime?

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