The Twilight of Tech

Time to get over it.The ITboomwill neverresume. In fact, we are at the twilight of IT -- or, at least, IT as we've come to know it. Business historian Carlota Perez contends that the frenetic and euphoric "installation" period of IT developmentis now passing as we enter the comparatively dull and mature "deployment" period.But please don't misunderstand.

As the histories ofsteam, the railways, steel, electricity and the automobile all suggest, this inevitable transition is good news for thecustomer, employmentand the economy overall.The twilight must precede a new dawn. This is the period where we begin to extract real, higher level businessvalue from technology. It all hashappened before: New levels of commerce as well as new towns, suburbs and cities truly emerged only astransportation(whether the railroad or the automobile) and other technologies were quietly assimilated. Recognizing this pattern,Larry Ellison recentlysaid the IT industry is now "mature." He was right -- and that'sgood news.

But Wall Street -- which seemingly prays for manias,untamed bullsand new, new things --continues to think (hope) otherwise. "Rather than building on its momentum, as it hasafter past downturns, the tech recovery already is losing its steam," states the Wall Street Journalin a piece last week. "The growth in corporate technology spending slowed to 9% in the third quarter. The shift has big implications for the broader economy. It's terrific news for corporate buyers but it is holding back a major driver of overall economic growth."

Wrong. Nothing is being held back.Corporate buyers are experiencing extraordinary productivity gains. They are now realizing the value of technologies they bought years before. As Erik Keller, author of Technology Paradise Lost, has eloquently written, these trends are not temporary. "World-class leaders in IT spending have shown that budgets can be cut 20% to 50% without a negative impact on business processes," he argues.

This isa great environment for the introduction of Web services and service-oriented architectures. Such approaches promise to further capitalize on the hidden value of existing technology. Beyond that, they lay the foundations for higher level business innovation. We can now concentrate onrethinking and refining business strategies, processes and operations -- and let the changes ripple back through our IT systems. The economic gainsto be realized -- and the needless costs to be eliminated -- through such efforts are truly enormous. As professor Perez suggests, a "great surge of development" remains ahead of us.Aftertwilight comes the dawn.