Tea leaves show tide turning

Is IT heading for further boom times? Could be, if the tea leaves are to be relied upon.

Is IT heading for further boom times? Could be, if the tea leaves are to be relied upon.

Here are some recent signs of what might be around the corner. Market researcher IDC reports PC sales are well up on last year — 30% in the last quarter compared with the same period in 2002. That’s attributed to sharp pricing, made possible by a strong currency, and a revival of buyer confidence after it was dented by economic and geopolitical upheaval beyond these shores. IDC also forecasts continued growth in spending in the important government sector; two thirds of agencies say their spending is increasing.

Fellow analyst firm Gartner makes bolder predictions still. “The full power of information technology will be unleashed and again change our lives in three years.” So goes

a statement from Asia-Pacific research head Jamie Popkin, made in advance of the firm’s Symposium in Sydney last week. Undoubtedly there are lashings of hype in his words to encourage the punters to come along to the show. But not all the excitement of his message can be dismissed that simply. Gartner is usually reasonably sober in its assessments of the market (although we’re still waiting to see the dramatic vendor consolidation it predicted a couple of years ago — half the vendors of the day would disappear within three years, it said).

Popkin is predicting a “massive wave” of innovation from 2006 to 2009, resulting in “huge” productivity gains and “dramatic” digitisation of home life.

Did I say sober?

He repeats the assertion that there’s consolidation of vendors to come in the short term, particularly in software, to the advantage of the largest IT companies.

More muscle for already dominant suppliers might not be to the advantage of IT buyers, however. On the other hand, Popkin suggests the pattern of IT use will shift increasingly to “sourcing”, which lets users get access to the latest technology without the capital investment.

Further pointers to a new boom might be seen in the US, the bellwether for IT worldwide. After a long spell of gloom and the losses of thousands of technology jobs, the country has recorded better than 7% growth in its last quarter. While that sounds an astounding figure in New Zealand terms, there are warnings that it doesn’t mean the US economy is cured; George Bush has run up huge budget deficits by cutting taxes and going to war, and there’s little sign of new jobs being created.

Another possible sign that the tide is turning is talk of Google going public. All eyes have been on the search engine maker since the story emerged of overtures by Microsoft to acquire it. It appears Google is keener on the idea of an IPO. The price talked about if it floats? $US15 billion — the kind of money that was standard for internet stocks a couple of years ago.

Before getting too excited, though, maybe we should heed the words of the Christchurch Wizard: the internet revolution is just a passing thing.

Doesburg is Computerworld’s editor. Send letters for publication to Computerworld Letters.

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