The X Factor: Economic Recession Is the IT Innovator’s Ally

…If you believe that we are right now at or near global peak oil production, then we are in for a humungous economic shock. It is hard to say how big, but in January 2007 dollars, oil peaked at over $100 per barrel in December 1979, and the current oil price is hovering around $72 a barrel as I write this, after hitting $78 a barrel at the end of July, when the mortgage nonsense first started dominating the news. We still have a ways to go before oil is as expensive as it was in 1979, which is good. But if a recession starts because inflation jumps, the stock markets crash, oil prices spike because of conflicts in the Middle East, or more hurricanes hit the Gulf of Mexico, then we can probably expect a phase change in IT to our list of predictions on the coming years.


Such a recession may never materialize and therefore will not accelerate some of the IT phase changes that appear to be underway. Sometimes, appearances can be deceiving. A decade ago, it looked like application service providers, or ASPs, would become a dominant way of consuming software, but only now, a decade later, is software as a service, or SaaS, becoming a noticeable part of the overall software market. No matter what happens, the desire to virtualize servers and storage and move toward data centers that are dynamic utilities remains–perhaps mixing applications inside the company with services and applications residing outside the company into one big mashup that costs less and does more than today’s infrastructure. Such a mad-dash to virtualize could breathe some life into big iron boxes, which have very sophisticated virtualization capabilities compared to the X86 and X64 iron that has sprawled all over data centers in the past decade. Or, it could kick the X64 into high gear on the virtualization front to capitalize on the opportunity presented by demand for cheaper platforms thanks to a recession.

IT Jungle