Flutterby™! : The New Economy 2001-02-14 18:31:57+00

The New Economy

2001-02-14 18:31:57+00 by Dan Lyke 4 comments

In line with those expectations of the future (ie: my previous entry), I'm hearing a lot about how "the new economy is over" recently. Hogwash. Think back 6 years. Life has changed a hell of a lot. What we've done is disheartened the leeches, the liberal arts majors who thought they could make productive-person wages and the like. Time to roll up our sleeves and get back to work.

After the Internet stock bubble burst, I felt as Cinderella might have felt had she arrived at the ball, dressed in her spanking new dress, only to be met by janitors picking up the beer bottles from the party the night before. I felt more optimistic after reading about the study IDC 2000 Web Spending Model: Forecast and Analysis by Vertical Industry. According to IDC, in 1999, U.S. companies spent a little more than 12% of their Information Technology budgets on Web projects. In 2003, U.S. companies are expected to spend $282 billion on the Web, or 27% of their IT budgets.

Another interesting projection: U.S. companies with fewer than 100 employees will devote more IT dollars to the Web than any other segment except the government. Small business web spending is expected to grow from $19.6 billion in 1999 to $95.5 billion by 2003. ("Small" being defined as having fewer than 100 employees). Much of that spending will focus less on an external web presence, and more on building better operational efficiency, and integrating with existing systems.

I think IDC's projections, like the Gartner Group or any of those other industry analysts, are completely colored by whatever client they happen to be pimping for at the moment.

We've been looking at various numbers from those sorts of groups at Coyote Grits

for some projects we're working on, and you can never get any two of them to agree, although all of them always predict the growth to be exponential.

And although there's money in it, I'm less interested in how businesses will use the web than in how people will use it. It's already changed our lives in ways that most of us couldn't have foreseen 7 or 8 years ago.

Ummm. I say this as a person who subscribes to their information feeds and has used them in business plans or to justify projects. They are totally pulling numbers out of their arses! Compare IDC with Jupiter, Yankee Group etc etc and none of them will agree. They may get the general trends right but the numbers never end up being even close. Buyer Beware

It's funny, I got an email on this topic attempting to refute me by bragging about their 45 million in funding and the trappings of flying to the Carribbean to meet with investors and such. And I thought back to that coffee shop conversation I recounted a while ago, where they talked for a long time about funding and lifestyle, and finally one guy asked the other "So what does the company do?"