IT's slump, the StarOffice challenge and owning the technology vision.

The view taken by a few Euro-analysts was that confidence in the IT sector has been low and that this was being reflected in slightly longer sales cycles but that the sales were being made - eventually.

Now, there is real evidence that the European market is slowing down too and companies are struggling. The first benchmark that was used to identify a slowdown in the US market was sales of PC systems. A recent statement by Gartner has indicated that European PC sales are now falling for the first time ever with Germany and Britain showing the largest falls.

At the same time, there is an increasing number of failing businesses in the IT sector. Simply talking to sales teams, contacts that were apparently thriving a few weeks ago are falling by the wayside at the rate of more than one a day. They are simply running out of funds.

However, the point that we should still be questioning is why other industries are not being affected in the same way. Just looking at the UK, unemployment is still falling and most industries, whilst not experiencing the kind of growth they would like, are keeping their heads above water. The IT experience is something of a localised decline.

Traditionally, when recession has loomed, IT has done quite well as businesses look to replace expensive and demanding people with automated and efficient systems. This is not happening now - perhaps there is nothing left to automate or maybe businesses are afraid to spend on IT in case there really is a recession just around the corner.

What is more likely is that the types of solution that are being pushed forward by the marketing and technology gurus is too far in advance of the business's ability to comprehend and see commercial value.

But if the IT industry is allowed to stagnate for too long there will only be a few winners - the big solutions vendors who will survive at the expense of smaller, more innovative players.

The dot-com crisis is over now and it was not ever caused by the technology. It was a failure of business planning. It is time for IT Directors to get off the fence and start spending money on ecommerce solutions. The business benefits are there to be gained if the solution is planned as part of an overall strategy.

The office star

In late June this year, the US Defense Information Systems Agency (DISA) chose to implement 25,000 units of Sun's StarOffice software. The cost to DISA was - nothing.

StarOffice is a set of office applications that includes word processing, spreadsheets, presentations, and database applications and, it runs on Solaris, Windows and Linux. This sounds like a significant gain until you discover that StarOffice was replacing Applix on Unix workstations as well as Windows based software. DISA's requirement was for "an open office productivity suite to work on multiple platforms, including Linux, Solaris and Windows".

Nevertheless, StarOffice is making an impact. By May 2001 Sun was reporting that five million copies had been downloaded and that more than 20 million copies of the software were distributed worldwide. According to Sun the major users are the education community, government, Linux users and small-to-medium-sized businesses. Later this year Sun will be releasing version 6, which includes XML file formats.

Currently, StarOffice uses its own binary format, but will also read Microsoft Office formats. This is no trivial attempt by Sun to make an open source impact on the office applications market, but the question is does it have any chance of denting Microsoft's grip on the market?

The answer is, at best, "maybe". It is difficult to estimate market share for open source products. Five million downloads does not prove any specific number of users. It might lead to a million or it might lead to 50 million. The only way of guessing is to estimate it from the change in revenues from the rest of the market - but this is a very rough guide.

The thing that makes StarOffice interesting is that the license will allow others to build software around it. Linux and Apache are not individual applications with personal benefits, but StarOffice is. It is therefore somewhat of a flagship for the open source movement. Our guess is that it will see extensive usage in the lesser-developed economies and from there it may build the momentum to penetrate the bigger markets. Right now though, it is too early to say.

Who's got the next big vision?

Companies that wish to exploit technology are often forced to make "strategic" choices between adopting one technology or another. Historically this situation has put one or another company in a dominant position in the industry, giving it an advantage over others in its ability to dominate the game and make profits accordingly. First it was IBM and then it was Microsoft.

Unfortunately this view is a little simplistic. It fails to take account of "the vision thing". Every now and then a new IT vision is introduced into the world, which favours a particular vendor. Consider the impact of minicomputers as "departmental" computers and its champion Digital. Unix offered a similar vision, which was the province of many vendors, but Sun Microsystems prospered most from this. Oracle with its portability and relational database message also captured a good number of hearts and minds.

The latest vision is "open source" and no specific vendor owns it. Aside from the various Linux distributors, the one that can lay greatest claim to it is IBM, who has invested heavily in it.

The current expectation is that the next major vision will be about "applications" that work together. We already have the technical backdrop to this with SOAP and XML.

We also have IBM and Microsoft adopting SOAP and XML in anger, IBM through its SOAP for Java SDK and Microsoft within its .Net initiative. Sun Microsystems is also active in this area, but so far we are a long way from the vision which could be described as "easily deployable software running anywhere and linking to anything".

Right now, quite a few vendors would like to nail their logo to seamless communication if they could. However, the IT industry likes new champions and it is entirely possible that one could emerge from "left field" - which is exactly where Linux came from.