It’s not been a good week on the tech stocks front, what with the HP Autonomy debacle, followed closely by Sony and Panasonic having their debt ratings cut to junk status by ratings agency Fitch.
Added to this are the failing tech retailers, such as Comet, and world of tech and business seems to be a gloomy one indeed.
But there are bright spots, with Red Hat and Salesforce.com being among them. The Register reports that Red Hat’s 10 year share price records show that when the economy falters, it seems to do particularly well. This may be due to open source being seen as a cost saver in straitened times, but it might also be the gradual dawning that, for larger enterprise in particular, open source can give a greater degree of control and flexibility than certain other monolithic solutions.
The recent reports that even the US Air Force had to abandon an enterprise resource planning (ERP) implementation, and another in which IBM is being sued over a failed ERP system upgrade and the capabilities of a software system, would seem to lend weight to this argument.
Further evidence of the fact that larger enterprise wants to retain more control of majors systems comes in the form of a report that reports global outsourcing contracts are down about 20% across the board, with terms for new contracts being shorter and their focus narrower.
The fact that two of the bright spots in the tech stocks firmament are companies that deliver flexibility in enterprise ICT environments could be regarded as isolated instances, but one could also argue that they are a small indication of the fact that larger enterprises are looking for greater control to be able to achieve greater agility in their systems through more granular control of the base software. Larger enterprise can throw resources at customising open source or software as a service (SaaS) in ways that smaller entities cannot, with the inherent benefits that this brings.
While it may be said that it has ever been so with larger enterprise, the advent of cloud computing, and public cloud in particular, was expected to have brought significant changes that may have led such entities to be more comfortable in relinquishing direct control. The analogy of the early days of electricity adoption was used as a guide for what would happen.
This is the one where the early adoption of electricity saw businesses ditch their own generation capabilities for those of utility companies. It was thought that cloud computing would see a similar utility computing capability drive the use of in house IT down toward an eventual phasing out in favour of such services. While this might become the case eventually, it would appear to be off to a slower and more niche start than was at first envisaged. While many smaller businesses seem happy to allow the kind of offloading of responsibility for servers, platforms and software that comes with utility computing, in whatever form, larger enterprises seem to be more comfortable with keeping and maintaining their own infrastructure while leveraging more malleable software systems, with open source among them, that will deliver them the customised capabilities required, but all firmly within their own domain.
Watch this space.
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