The IT economy looks brighter

Now that I’ve been writing this column for well over two years, I can look back and reflect on times that I’ve been a little off in my occasional prognostications. A column in particular that sticks out in my mind is one I wrote in January 2002 urging CTOs to prepare for a better economy: “Now pick up any business publication and a growing number of analysts are beginning to see some light at the end of the economic tunnel. Sure, there are still discouraging signs in the economic picture; but to keep ahead of the curve, CTOs must now reckon with the distinct possibility of an imminent economic upturn. CTOs: Are you ready for an upswing?”

I’m certainly ready now. Little did I or the analysts know that the light at the end of the tunnel in January was a flicker that we wouldn’t see up close until late 2003. The gut feeling that we had in early 2002 is reflected in real numbers this time around. As I write this, the Department of Commerce just released numbers indicating the largest quarter-to-quarter GDP growth rate since 1984 — a healthy 7.2 percent. Digging deeper into the numbers, I noticed that expenditures for “equipment and software” had increased an even healthier 15.4 percent, so IT is on the rebound. There are still serious economic issues to contend with (including record deficits and stubborn unemployment), but it looks like something positive is happening.

The anecdotal evidence also seems to point to an improving IT environment. Just this morning, I asked our CFO to sign an authorization for a major capital expenditure. It was in the approved capital budget, of course, but during the past couple of years, an approved capital budget didn’t always mean “approved” — tight-fisted CFOs often froze capital purchases to preserve capital and bolster the bottom line. This time I said, “It’s in the budget,” and she signed without hesitation. My capital budget was conservative and certainly not frivolous, but it was still refreshing to experience a little seamlessness in the financial area for once. Perhaps the fiscal conservatism and discipline demonstrated by business-minded CTOs during the tough times will lead to increased levels of trust in the CFO’s office as budgets open up a bit.

Looking outside InfoWorld, the overall technology environment seems to be cooking. In a single day a few weeks ago, I was contacted by two entities that have been unusually uncommunicative during the past couple of years. The first was an exciting new VC-backed startup company with innovative, truly compelling technology. The second? An executive recruiter (no thanks — InfoWorld is too much fun). The job market is still tough for IT workers, but in the past few weeks, two out-of-work developers I know have gotten jobs. More vehicles are on the road in and around Silicon Valley — traffic jams have never felt so good.

It’s not time to hang the “mission accomplished” banner just yet for IT, but as the downturn may start to fade into the rearview mirror, I’m thinking about the lemonade that IT has made from all the lemons in the past few years. I look at my infrastructure and it’s far simpler and easier to manage than it was just two years ago — and actually more powerful. The staff around me is small and busy, but smarter, nimbler, and more seasoned. Our vendors are more responsive and loyal than ever, thankful for our business and working hard to keep it. We’ve all learned some tough lessons, but I think IT is better for it.