IT Innovation in a Recession

With all the talk of a recession going around these days, I can't help but think about the post Y2K days when the bottom fell out of the tech market.  At the time, I ran a fairly successful ERP consulting practice.  My clients included:  Colgate Palmolive, Avery Dennison, Johnson and Johnson, Guidant, Arrow International, etc.

Business was booming through the first part of 2000.  It was a windfall of cash for my company and luckily, I squirreled some of it away for a rainy day.  I just knew it wouldn't last.  Why?  Well, the Y2K scare was over.  All of the software updates were done.  And, to make matters worse, all of the hardware purchases were complete.  Many of the applications that had issues were written in COBOL and, yikes, FORTRAN.  These machines were old and outdated and entire application suites had to be rewritten and upgraded to new operating systems and hardware.  So, the software was fixed and new hardware was purchased (at considerable expense to major companies.)

At this point, IT budgets froze.  They had spent their money and wanted to wait for some of it to pay off.  Then, the bubble burst on the dot coms and IT budgets got cut.

I remember having multiple 6-figure deals just going on hold until further notice.  They finally started picking up again in late 2002, but the damage to the tech industry was pervasive.

Now, here we are in 2008 and a recession is looming.  (I am not buying it, for the record.)  IT budgets are in jeopardy again.  When IT budgets get cut, innovation ceases and preservation is the name of the game.

But, that doesn't have to be the case anymore.  Evaluate your current IT budget.  Look at the planned expenditures, especially the largest software components.  Are they open source or proprietary?  If they are proprietary they are most likely capital expenditures and more likely to get cut.  If there was ever a case for open source, a recession makes that case even more clear.

Open Source software components are "good enough" if not better than proprietary solutions in almost every case.  Yes, your CTO knows and trusts X company (in our case, Oracle).  But, your gonna cut that whole project anyway because (Oracle) is too expensive in a recession.  Teach him about Postgres and EnterpriseDB Advanced Server.  Let him know how SugarCRM, Alfresco, Jasper, JBoss, etc.  Make them understand that they have been running and depending on the LAMP stack for years and that Firefox is actually open source.

If they don't trust you, get OpenLogic in there or SpikeSource or Optaros.  The cost of the open source software, plus the piece of mind of a third party like I mentioned above, will still be dwarfed in comparison to the cost of the proprietary solution you are replacing.

You CAN innovate in a recession and it might just be the competitive advantage you need....