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I've spent some time this morning calling some friends in both the finance and business worlds. Bottom line: people are freaked out with fear. So, out of all this, a couple of observations from eric's crystal ball:
1. The market bottoms between here and 2003 -- most likely shortly after we attack Iraq (that happens no matter what, btw).
2. Once the market bottoms, there is no V-shaped recovery, but rather a long (multi-year) basing process that allows company earnings (quality and momentum) to come in line with perception.
3. This amounts to 2-3% economic growth in the US on a yearly basis for 2-3 years.
4. This also amounts to essentially a job-less recovery.
5. And the fed lowering rates again before 2003.
6. And, once the economy does start recovering, and interest rates start rising -- a pop in the housing bubble (think fall 2003) will be heard.
What does all of this mean for Digital Identity:
1. Corporate IT has become almost a pure cost center.
2. Just about the only IT efforts that are actually saving money (while increasing privacy and security) are identity management efforts.
3. ID Management will enjoy growth, while the rest of IT goes through a long, hard, cold winter (yeah, this is just the fall).
4. The reason is simple: identity (and all of the re-architecting and the acoutrements) is the only thing that is showing the promise of converting IT from a cost center to a profit center -- and over the next 2 years, that is ALL that will matter.
...and that's all I have to say about that...
Posted by ejnorlin at September 30, 2002 12:02 PMEric, I must disagree with your assessment of enterprise IT and its effects on the bottom line. The situation is not that dark.
There is still quite a few companies, where communication is still done through EDI over expensive VANs over dedicated satellite links. There are still many applications that can't be provided to large numbers of users (and thus use to generate more revenues) because they have not web interfaces. CRM, though widely ridiculed in the press and apparently behind the hype, is still a big industry. Actually, the size of the market for CRM according to some analysts I have heard recently is slightly bigger than of the one for identity management. e-Procurement is also live and kicking. Companies ARE still buying and building these systems, and surprisingly they are more succesful than those that tried to implement them in the first, overhyped, wave.
Te real difference I have experienced is that each and every IT project nowadays must have solid business case to go further. There is very little space for experimenting with large scale bleeding-edge technology. The less tailor made code-level integration and customisation the better. Etc, etc. The situation is not pleasant, but not deadly.
Posted by: Jiri Ludvik at September 30, 2002 02:08 PMthe best part, jiri, is that now we're both public....so we can check back in 6 months and see how my predictions are doing....
tks
ejn
The downside is that in 6 months you will probably be still arguing based on shreds of evidence you get from your anonymous contacts and I will be still arguing based on shreds of evidence I encounter at work, details of which cannot be published in both cases.
The only way to do it in a public manner is to look for the pieces of IT market intelligence (covering different segments - i.e. CRM, ERP, EAI, Identity Management...) produced by Gartner, IDC et al. that are published in trade mags.
Otherwise it will always be "if you knew what I know" type of communication.
Posted by: Jiri Ludvik at October 1, 2002 08:51 AMEric,
I agree with your enthusiasm for Digital Identity and generally like your crystal ball. But could you be more specific on why you see ID Mngmt enjoying growth vs cold winter, and being a clear winner to enable IT to become a profit center ?
Is it because of cost savings due to supporting all the existing multiple IDs ? Is it a new product offering ? But then why would this benefit IT vs the business overall ?
In general, what do you see as the killer apps / reasons that ID Mnmgt solutions drive revenue ?
Posted by: Louie Gasparini at October 2, 2002 01:35 PMLouie-
I think that ID mgmt begins to be a "profit center" by first bringing IT back to not being a "cost center" (ie, just a baseline of zero). It does this because it eases so many problems with system maintenance and administration.
As that pressure lessens, I think the ID mgmt solutions spread to supply chains, partnerships, etc -- and that is where it begins to be a profit center (although as long as we're in a recession that "profit" is realized as cost savings). CFOs everywhere will be stunned as IT begins saving them money (IT and privacy and security).
Posted by: Eric Norlin at October 5, 2002 02:50 PMJiri-
actually, i'm not arguing based on "anonymous contacts" at all.....everything i would allege is public --at the Digital ID World conferece -- where you'll hear the speakers say things that string together my argument.
and truly, the best "public" measurement of this disagreement will be the stock market and the subsequent turn in economic data....all of which comes from goverment sources, which (oddly) I trust much more than IDC or Gartner...
cheers.
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