October 27th, 2008
Tech economy: Is the forecast glass half-empty or half-full?
Talk about a doom-and-gloom outlook for the tech economy.
Tech entrepreneur Jason Calacanis - founder of Silicon Alley Reporter, Weblogs, and Mahalo.com - has fired off a pretty glass-half-empty message to startups, via his e-mail subscription list. It’s been about a week since Calacanis announced layoffs at Mahalo, his startup venture. Now, he’s warning that, in this economy, startups are on their own. His words: “There will be no white knight,” “The storm is upon us and the death spiral has started,” and “What you do in the next 30 days will probably make or break your company.”
Hey, Jason, don’t hold back. Tell us what you really think. Oh, wait, to get that sort of insight, you have to subscribe to his e-mail list. (The blog, Altgate, posted the text earlier but Calacanis asked the blogger to “remove my copyrighted material from your site.” Good thing another blog posted an excerpt.)
Sure, no one is saying that tech is immune to the global economic slowdown or even that a rebound is just around the corner. The future - from next week to next quarter - is still very uncertain. So, Calacanis’ remarks aside, is there any good news for the tech industry as it heads into the economic storm?
Personally, I liked the approach taken by George F. Colony, founder and CEO of Forrester Research. In his own blog post from this weekend, Colony highlights five reasons why the impact from this slowdown will be different from the tech bust of 2001. In a nutshell, he says:
- Growth in tech will not fall off a cliff. Tech spending was fat and fluffy back in 2000 and had a long way to fall. Now, techies are much more disciplined.
- Everyone from Bank of America to Wal-Mart to Fed-Ex will use technology (green data centers, system integrations products, social media tools) to cut costs and operate more efficiently through the storm.
- Tech is mainstream. Cell phone penetration has tripled and e-commerce is up significantly since the last tech bust. What was “nice to have” back then is now at the core of business operations. Can you imagine pulling the plug on the VPN and Blackberrys today?
- Younger people only know a tech world. For example, social networking sites could take on a bigger role in a recession - a place where the unemployed network for new opportunities and a place where companies keep customers engaged in their products and services.
- Big tech topics are on the front burner. Today, efforts to implement virtualization, social computing, mobile computing and Green tech could see cutbacks but likely won’t be eliminated. They’re part of the long term plans for growth.
Doesn’t that feel a bit more glass-half-full to you?
Sam Diaz is a senior editor at ZDNet. See his full profile and disclosure of his industry affiliations.
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