Tech hiring poised for recovery — and open source leads the way

After a grim 18 months of layoffs and cost-cutting, there are finally signs that the tech industry is beginning to recover. Companies are slowly starting to hire and restore employee benefits. Venture money is flowing, and severe price slashing — always the hallmark of a recession — has slowed.

Huge numbers of techies are still unemployed or underemployed, of course. But economists expect that Friday’s jobs report will be the strongest in months, and that gives me confidence that the green shoots I’ve seen sprouting in Silicon Valley aren’t a mirage, as does the report that IT employment grew by 0.37 percent, or 14,000 jobs, in February, one of the strongest month-to-month gains since 2008.

“The capital markets are opening up a bit, and that allows us to step on the gas,” says MuleSoft Vice President Mahau Ma, whose company just received a $12 million investment from SAP Ventures and several other venture capital firms. A year or so ago, a small company that got additional venture funding probably needed it to stay afloat, but MuleSoft sought the cash to expand its sales and engineering teams, says Ma.

Along with MuleSoft, I’ve come across a few more open source companies that have “help wanted” signs on the door. And that’s not surprising. Even at the height of the layoff epidemic that swept Silicon Valley last year, open source companies were hurt less and seem to be recovering faster than conventional software outfits.

More benefits, fewer discounts
A sure sign that a company wants to hold on to employees and attract new ones is a richer benefits package. “Contacts are telling me that companies have started to match 401(k) plans, giving occasional salary raises, and (on a selective basis) started to reimburse their employees for education and training expenses,” says analyst Trip Chowdhry, of Global Equities Research.

Chowdhry adds that he’s seeing “more and more Silicon Valley companies highlighting the fact that they are hiring, during the customer presentations.” Indeed, MuleSoft has started posting a “we’re hiring” line on every press release the company issues.

Much larger businesses, including Apple, Cisco Systems, and EMC VMware, are hiring engineers for various internal R&D groups, while Oracle is struggling to find chip designers to work on Sun hardware now that the Sun acquisition has been fully digested, says Chowdhry. And there are reports that  LinkedIn, Twitter, Facebook, and Accenture have plans to hire very aggressively in the coming months.

There’s always an element of posturing when companies discuss economic news. Chowdhry notes that telling customers you are hiring is a way to signal that there is less wiggle room to negotiate a discount; and it appears that prices for enterprise products have stabilized.

Open source companies thriving
Still, the signs are encouraging. And as I mentioned, open source companies seem to be on the leading edge of postrecession growth:

• Sonatype, which provides a development infrastructure platform based on the Apache Maven project, landed the biggest deal in company history early this year. Revenue in the last two quarters was at record levels, and the company is adding staff now and expects to add more by the end of year. And in another sign of growth, unique visitors to its Web site were up 60 percent in the first quarter of this year.
• Jaspersoft, an open source business intelligence software developer, says it will bump up its total workforce by more than 10 percent this year, largely in sales and marketing. Revenue was up 60 percent last year, and customer engagements — that is, serious sales inquiries — have doubled. Jaspersoft’s greatest growth was in Europe, even though that continent has been hit even harder by the downtown than the United States.
• MuleSoft grew recurring subscription revenues 152 percent last year and nearly doubled the number of paying subscription customers. By 2010, the company claimed 1.5 million downloads and 2,500 deployments, including enterprises such as Wal-Mart, Nestle, Honeywell, DHL, and five major banks.

It’s still a buyer’s market for IT talent, but MuleSoft’s Ma has seen a subtle shift in recent months. “We had a ton of résumés for every position [at the bottom of the recession]. And we’re still seeing a lot, but it’s tougher now to find the very good people that we want,” he says.

The hard times are far from over, but maybe, just maybe, we are at a turning point. As Ma put it, “It’s not a sea change yet. But we hear it coming.”