The State of the IT Industry 2009: Looking back, were we right?

Earlier this year we ran a four-part series on The Force Field podcast called The State of the IT Industry, a comprehensive study of the effects of  national economy in a downward trend on the IT services industry.  During this series we interviewed four service professionals and asked them how their businesses were doing and where they thought the industry would be in the coming months. Given the situation with banking industry, high unemployment and a world economy on a downward spiral their answers were somewhat surprising. Overall, they were very optimistic.

 In episode 29 we talked with Pat Palmer of The Computer Guy, heard how his business is doing well in spite of the economy and how he expects this trend to continue in the months and years to come. In episode 30 we talked with Kris Crispell, a computer consultant in Oregon and he told us the same thing. In episode 31 we talked with Crisantos Hajibrahim of Virus Woman. He told us why he entered a new and growing area of the IT market to keep his business profitable, heard how he did it and found out how he is riding out the economic storm with Google Apps. In episode 32 we wrapped up the series with The VAR Guy, listened to his advice on diversifying and found out where he thought the industry is headed.

They represented four different segments of the industry with four different business models. Yet their views were the same: they all were very optimistic about where their businesses were going, in spite of the economic situation.

I wanted to revisit this at the end of the year and find out if their expectations were met or exceeded, or if they had all been overly optimistic. A general look at the current state of the industry indicates that, overall, IT has fared well, especially compared to other industries, and this trend is likely to continue, at least for awhile. In fact, I received a number of comments from other IT providers who seemed to support this observation.

For instance, at the start of an interview in a recent episode with Pat Palmer, who returned to discuss business plans, I asked the follow-up question, “How has business been since then? Is it about what you expected?” The short answer was yes. In fact, in July of this year he expanded his business, opening a retail storefront downtown.

In a discussion on the topic in the FF forums , Chris Bequeath indicated he was having one of his better years and responded “recession my ass.. if this is bad.. keep it bad!!!!”

A tweet from Leon Jackson (ljtechservices) said: “I was busier than ever this year.”

I received a number of other comments from service providers as well, most were similar to those above.

Not everyone agreed, however. There were a few who said business was about the same or slower and one or two said they were getting out of the business entirely, though not necessarily due to the economy.

Interestingly, this general spike in business for IT is in stark contrast to the last major economic upset which occurred in 2001 – after 9/11. At that time the industry took a serious hit and it was somewhat slow to recover.

What happened? How did the industry escape a fate in 2009 it endured eight years earlier? What changed between then and now that made IT more resilient to such an economic downturn? Personally I believe it has more to do with our society and our increased dependence on technology than anything else.

During the past decade we have become more reliant on a high tech infrastructure in nearly all facets of our existence, from computer controlled electrical grids, utility delivery systems, transportation, communications and national security to business operations, domestic activities and personal diversions. We now have devices, tools and processes that either did not exist ten years ago or were luxuries that became commodities on which we rely heavily for both domestic and commercial use today.

What was considered a novelty then is now almost a necessity. When it fails or breaks, it needs to be fixed or replaced pronto. Such is the state of the IT service industry in 2009. It is no longer just another field, it is one that has become increasingly vital to the maintenance and perpetuation of our entire societal infrastructure. The economy may be bad, but without IT, it could become worse.

While that may answer the question as to why the industry as a whole survived and flourished, there is still the question as to why most service providers did exceedingly well and others didn’t. To answer that question, I went back to interviews and analyzed them from another perspective.

I listened to the series again (yes, I listen to my own podcast!) and found a common denominator among the responses from all four guests. Yes, their views were all positive and optimistic. Why? What was the common element here that made them optimistic and sure of their success?

I think I know the answer, but I want to know if it is indeed the one thing that made the difference. To find out if I’m right and what it is, I invite everyone to listen to all four interviews again and post your comments here, in the forum thread The State of the IT Industry 2009 – Win an mp3 player! or send an e-mail to comments@theforcefield.net. If you guess my answer correctly or figure it out I will put your name in a drawing to win an mp3 player similar to the one we gave away in the Summer of Podcasts contest earlier this year. (The winner was in Sweden).

I will give you a hint: there are clues in each episode and it was actually discussed outright in episodes 31 and 32.