I don’t really have enough time to blog today, but I did notice this article from the Economist, and I think its important enough to post here.
The article is particularly timely given the extensive coverage of the drop in US venture funding in the fourth quarter, the generally dismal mood among Israeli VCs, and the often-forecast death of the venture model.
I’ll write about the venture model (and whether it’s alive, dead, or just chronically sick) in another post – but I want to point out a few things that the Economist piece gets right and that have been driving my thinking lately as well:
- This is a serious recession, but unlike 2001, it was not caused by overblown technology stocks.
- IT spending is too essential to modern enterprises to disappear or even decline dramatically – but its also too much of their budget to grow exponentially.
- Enterprises are less and less focused best-of-breed and more focused on “good enough” and “relevant to my business.” (They learned this, by the way, in part from Google’s approach to infrastructure: the components are commodities, the platform and application are unique.)
- Enterprises are increasingly moving to IT strategies that emphasize low cost, flexibility, and manageability. This means SaaS, open source, cloud computing, virtualization, thin clients, etc. etc. None of these trends are new, but they are likely to accelerate.
- Technology shifts are always going to create attractive opportunities for start-ups.
- Read The Economist, its good for you!
While we’re on the subject of the 2001 dotcom crash, remember this?
