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XPOSURE: The X channel's capitalist adventure

XPOSURE: The X channel's capitalist adventure

Adventures In Capitalism" boasts a huge billboard in San Francisco's ailing, but still hip, dot-com district, South of Market. The advertising is for The Wall Street Journal, the staple diet of all-American business people. If you've read "The Journal" for the day, you know what's going on.

The ironic thing is that community lobby groups are close to convincing lawmakers such large celebrations of capitalism should be illegal - an apparent blight on San Francisco's landscape.

For the land of "free market" domination, these are awkward times. The industry that celebrates the extremes of capitalism - excess and greed - has finally recognised its darker side.

The harsh medicine of the dot-com phenomenon - which everyone's still talking about here - is that there's no such thing as free money. You only have to walk around San Francisco and see all the commercial "for lease" signs to realise real people have lost lots of real money.

The problem is now it's getting really serious. Mainstream IT vendors continue to bear the brunt of the economic downturn. Thousands of layoffs and million-dollar losses are quickly becoming commonplace for industry giants that, until very recently, looked bullet-proof.

Vendors that once boasted they were growing so fast it was impossible to develop long-term plans have been caught short in soft times. Consumers and businesses apparently don't have money to spend anymore, and industry commentators here are not expecting the good times to return quickly.

Like Australia, the US realises the money is no longer in hardware sales. So the US version of the Australian channel's "sell services" mantra is another familiar word: "integration".

Corporate America is bloated with over-priced and over-hyped solutions such as the all-too-familiar ERP, CRM and supply chain management offerings.

Forget buying new stuff. CIOs are saying now's the time to use what we have and use it to save money. Never before has senior management been more serious about their use of the acronym "ROI".

This, of course, bodes well for channel companies large and small. Companies such as PricewaterhouseCoopers, Accenture, KPMG and EDS theoretically have the world at their feet (if you've still got any money to pay their bills). Smaller integrators, developers and consultants also have an important role to play because SMEs are also trying to make existing IT investments last a bit longer.

Meanwhile California, and Silicon Valley in particular, has received its fair share of blame for the economic downturn and other critical local issues like the energy crisis (with more blackouts expected).

The good news is a solution to the economic doldrums is slowly emerging. San Francisco's community at large has developed a conservation-mindset that's triggered an about-face in our understanding of what this IT merry-go-round is all about.

Over the last two years we've been fooled into believing IT was the end in itself. Share prices, quarterly reports and greed-fuelled IPOs were objects of corporate lust.

Strangely enough, now the IT industry - and vendors in particular - are more concerned about how they can help customers reduce costs. And at the same time we've become more concerned about what those end-user customers are doing to solve broader concerns such as the environment.

Of course, this new philosophy is still just as good for business. I'm sure proud headlines announcing the success of "new" business process re-engineering strategies are just around the corner. IT consultants, the world is looking for new leaders.


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