Echoes of boom and bust

So you got caught up in the dot-com bubble. You paid for way too much bandwidth, storage and processing power, only to see all your plans collapse. Your dreams of growth have become nightmares of consolidation, as your organization tries to survive the latest economic downturn.

But wait, all is not lost. Just as Europe in the Middle Ages saw the years of plague and misery end with a cultural and philosophical rebirth, so too will today’s moribund tech sector see a renewal of investment and innovation.

Sounds like a bit of a stretch? Don’t tell me, tell Forrester Research Inc. This week, the Cambridge, Mass. research firm issued a press release predicting all sorts of good things for IT in the next few years.

With a headline like “IT Renaissance in 2003 will unveil a new technology sector in 2004, predicts Forrester Research,” you’d expect to see some great (and wacky) predictions — something along the lines of Gartner Group Inc.’s perennial “wearable computer” forecast. Unfortunately, the brief is pretty disappointing

Overall, it’s a weird mix of caution and hype. On the one hand, Forrester rightly tells CIOs to keep e-business planning to smaller, shorter projects, and to focus on partnering with partners and customers for business, not technology, reasons.

On the other hand, we’re told to expect a slew of network and Net-enabled doodads by 2004, offering a bunch of “always-on” wireless services. Forrester even goes so far as to tell venture capitalists to keep their wallets warm for 2003, when “displaced technologists” will unveil the next generation of killer apps.

As with most forecasts, the closer you stay to the contemporary, the more accurate you’re likely to be. Forrester is on the mark with its short-term predictions that last year’s IT buying spree will drag down the sector for the near future. The soothsayers even put a figure on that bubble, saying that 12 per cent of the sector’s volume in 2000 represented overspending, or a “hefty” US$62 billion.

That more or less jibes with what other industry watchers are saying. Lately, when I’ve spoken IT analysts, I hear similar stories of excess capacity and overspending, be it on database or network technology.

What I don’t hear, though, is that we’re headed for another Renaissance. Yes, folks are hoping that developments like wireless technology will spur new growth, but no one’s comparing that prospect with the cultural, social and economic upheaval that swept through Europe hundreds of years ago.

Most advice-style reports are keeping to the next year or two. Managers and CIOs are being told to hold off on major investments and get the most out what they’ve already got.

For instance, last week, Gartner released a summary of recent research, focusing on the current economic turmoil. Dubbed Smart IT Actions for Tough Times, the brief may at first glance look like a sales pitch for other costly reports, but it does contain a few interesting predictions and some good suggestions for surviving the next few years.

A renewed technology explosion in may indeed occur in 2004, but if it does, let’s hope we learn from recent history — and don’t repeat it.

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