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Greg Neilson
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The Good Ole Days |
| In the late '90s, IT professionals enjoyed high demand and even higher salaries. For those of you longing for a return to this golden age, Greg Neilson predicts severe disappointment. |
| by Greg Neilson |
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4/30/2002 -- The late '90s were heady times in IT. I lived in the San Francisco Bay Area from 1997 until early 2000, so I was lucky enough to be near the epicenter. Not only was there all of the considerable dotcom activity, but at the same time most other companies were making extensive investments in upgrading their IT infrastructure in preparation for Y2K.
Since the dotcom crash in April 2000, many of us in IT have been wondering when the downturn will end and the "good ole days" will be back again. It's becoming more and more obvious to me that this won't happen -- sure, things will get better than they are today, but we won't ever get back to that unsustainable level of activity we had then.
I'm not trying to pretend that I'm the first to say this – I recall seeing some industry analysts make this point in the middle of last year. However, the recent wave of profit warnings issued by many of the major IT players underlines this premise. I certainly think we'll see some improvement from our current position, but as the IT industry matures we will probably move to a sustainable level of IT activity, a new kind of what we might think of as "normal."This will be the case for investment in IT (hardware, software and professional services), but more to the point for you, our readers, in the employment of IT professionals.
Even though I think things will get better on the IT job scene, the reduced demand for staff relative to the pre-April 2000 levels means that salaries and conditions will continue to be generally less than we had become used to. This isn't to say we'll end up being paid minimum wage, but the drop in demand means that those looking to change jobs may have to accept less than they currently receive now. This also means that those who don't move will find that their current salary may not rise significantly until inflation increases the market pay rates above their current salary level. Given that inflation is relatively low in most major economies nowadays, this could take some time. Either way, this means that real salaries in IT will fall from the previous levels.
Following the same logic through, I also believe that this reduced demand will mean that some of those who were working in IT before may need to give serious consideration about whether they should start to look at other career options outside of IT. Generally speaking, these will have been the poorer performers who only had jobs because their employer had little other choice -- use these people or go without (or pay more to get the people who really could do the job). Now that the employment demand has dropped, these poor performers are being passed over for those who have a demonstrated history of achievement and have a compelling career story to tell. Also, those who haven't kept their skills current will probably also find things very difficult.
I'm not trying to tell everyone that the sky is falling. In the long term, IT will continue to be a good career option, but things probably won't again be as great as they were in the late '90s. We will still be paid well compared to other professions, but not to the levels we have been accustomed. This means we are going to need to adjust our thinking as to what we can reasonable expect in salary and conditions from employers in the future. Perhaps some of us will have some great stories to tell our grandkids – "Sure, those were crazy times in the late 90s, and I was there in the middle of it. Did I ever tell you about . . .?".
What's your view of the road ahead in IT? Please let me know by posting your comments below. 
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Greg Neilson, MCSE+Internet, MCNE, PCLP, is a Contributing Editor for Microsoft Certified Professional Magazine and a manager at a large IT services firm in Australia. He's the author of Lotus Domino Administration in a Nutshell (O'Reilly and Associates, ISBN 1-56592-717-6). You can reach him at Attn: Greg.
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There are 113  user Comments for “The Good Ole Days”
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Page 1 of 12
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| 5/1/02: Anonymous says: |
The situation in late 1998 and 1999 was that the demand for certified workers was out of touch with reality. First, the Year 2000 issue forced many companies to change desktop hardware which otherwise would still be in service today. Many shops decided that, while they were at it, to make other upgrades at the same time. So the LAN support workload was artificially high, probably double the normal amount. At the same time, every company and organization was discovering the internet, and decided that they had better get on that real fast. This led to a parallel demand for web developers and webmasters, which was also higher than the long-term need. Of course, I don't need to mention the large number of Internet startups, and the additional demand that they brought to the market. The Y2K issue also affected other markets. COBOL programmers were treated to a pleasantly high level of employer demand. And demand for SAP and other ERP package consultants was similarly robust. The problem is that supply rises to meet demand. The only thing keeping anyone from MCSE (or almost any other certification) is a little study and a series of exams. So, at the same time that demand dropped in 2000, the supply of MCSEs and other certificate holders has risen. This means falling prices in Economics 101. The rise of outsourcing companies for things like help desks has also reduced the number of entry-level jobs in some areas, by reducing the total number, and in some cases by moving them out of the US. So...what's normal? I've asked myself this question over the last two years. I think there are two responses here. First, the last "normal" year was 1998. Even that was warped by the prevalence of Y2K projects starting up in the fourth quarter. So, if you evaluate demand against 1998, we're slightly below that. Or maybe just seeing the perception of increased supply by employers. Second, though, is the capital expenditure cycle. IT spending had its turn as the priority for capital projects in 1999-2000. It takes two or three years for all the other demands which were suppressed in favor of IT spending to be met. So perhaps we will see a return to a more favorable environment in 2003 or 2004. But the problem of increased supply must also be resolved. Many H-1B visa holders have become available, and many more are waiting for a chance to re-enter the U.S. Until there's a reduction or expiration of the increased H-1B cap, that's going to drive down salaries. But, as the article points out, some people will have to leave this business. This is unfortunate for their personal circumstances, but economics is not forgiving when it comes to supply and demand. |
| 5/1/02: robert britton says: |
Things are in a downturn, yes. The dotcom bubble burst (yes). Will things be tight for a bit more. Undoubtedly. But there will be a resurgence of IT. It's inevitable. This is a technological world we live in. While most dot coms (dot.bombs) got weeded out, those that survive are setting new standards in terms of utilizing both traditional and internet technologies in business. The dotcom bubble burst because the companies based their businesses on 'elite' web technologies that the kmarts and walmarts and barnes & nobles didn't have. What the dot.coms didn't have was business savy, experience, and plain ole business smarts. In every aspect, technology and innovation of all kinds will drive this economy. IT is such a requisite for any business now, it's just a matter of time before things pick back up. Investors are much more cautious these days. But they will be back. They will invest into genome reseach (heavy dependence on computers), pharmeceuticals (heavy dependence on comptuers), fuel efficient cars (heavy dependence on technology). Geez...even look at some of the newer walmarts: You can check yourself out now by scanning your own goods and using your charge cards to check out. can you say 't e c h n o l o g y' ;-) The guys who's only skill used to be hand writing HTML can be replaced with secretaries using frontpage or dreamweaver. (Hey...here's a clue...HTML is not PROGRAMMING!) For a while, people were getting the easy buck in IT (If you can spell 'internet' we'll start you at $80K). Those with meaningful IT skills in networking, development, erp, mrp, scm, crm....it may be tight now...but the economy will come back...profits will come back. When they do...companies will unleash their budgets and invest in to new initiatives. It's inevitable: IT will be back. |
| 5/1/02: Max says: |
IT Field sucks...I'm a current graduate from a tech school w/ my MCSE and A+ Certs. I went to school for this bec I thought I would get a good paying job to realize that's not the case. I got tech support job but doesn't pay that 55,000 with an MCSE cert. These certs don't mean much no more =(. |
| 5/2/02: Stu says: |
I agree with robert britton above. The IT field is tight right now, but the people here with real world skills and experience will stick around while the people who go on bootcamps with no experience will leave the industry when they realise that they cant actually get the job the training cntres told them they would. People with no experience and just certs will be hard pressed to find jobs in the next few years, and as supply and demand levels out we will see fewer, better IT people. It's cruel to those like Max (above) but at the moment noone will employ if you arent one of the top candidates. |
| 5/2/02: Steve Olson says: |
The IT world is now getting a dose of reality. Max, sorry, but a guy fresh out of a tech school with A+ and MCSE isn't worth $55,000/year. The constant commercials saying "Did you know that the average salary of an MCSE (and I've noticed they're throwning in CCNA) is $75,000?". Ignore the commercials, they are wrong. People getting four year college degrees aren't getting that either. No one is, it's unrealistic. You're only worth about 25-30 K *at best*. The market is flooded with certified individuals who have no experience, and are passing up jobs because they're not paying 50K+. 15 years ago, I sold computers for awhile, then took a lower-paying job to get the experience. I took another job dealing with routers and stayed on for two years. I just recently took another job as a network manager which paid even more. I now have an A+, Network+, MCP+I, MCSE and CCNA and make 50K. I'm currently working on Server+, Inet+ and CCNP. Will I get more money? Probably not, because I don't want to relocate. I'm doing it so if things go sour, I'll be in a good position to get another job. Don't turn your nose down at 25-30K jobs. Take one for a year or two, get some experience, and maybe you'll move up or get a better job somewhere else. |
| 5/2/02: Nyert says: |
Like I used to say to my students, you'd better love this field because it is very fickle. Network people are going through the same things that engineers have been facing since the '80s. Companies want technology, and they expect you to provide instant answers to all situations, but they don't appreciate the effort behind it. Just like engineers, IT people are now commodities. You won't get rich quick. You will have to work your butt off to keep justifying your corporate existance. You'll be a key player and still get laid-off sometimes. But, eventually another company will want your expertise. So, even while you have a "stable" job, start thinking and acting like an independent contractor. Assume that you'll soon need to re-market yourself, and keep studying at night to keep up with the technology. Don't forget to learn enough business skills that you can relate to business managers -- it is up to you to educate them about why they should hire you and pay what you want. Assume that most companies see you as an expense, not a profit center, so you will be high on the to-go list when their cash doesn't flow. Structure your personal budget so the inevitable income flats and dips don't put you in jeopardy. The only thing you can count on is your professionalism. Once you get past the paper stage and become truly competent, you may still have to job hop but new opportunities will reappear. |
| 5/2/02: Greg says: |
I agree that we are going thru a shakeout in the IT field, and that rightly so people with lesser skills are being weeded out. I entered the field full time in the early 90s working with Apple computers and learned how to ADMINISTER a network. Backup strategies, e-mail management,vendor relationships, Internet connectivity, trouble shooting techniques, desktop support, and staff management. It is these skills that have kept me at the top of my game not what I learned while taking classes towards MCSE certification. I enrolled in "MCSE school" at a major university and my classmates were copier repairmen, forklift drivers, x-ray techs, secretaries and out of work architects and engineers. Out of twenty people in the class maybe four were working in the IT field at the time. The others had just read/heard that NT was hot and the sky was the limit on salary. I started the class in the late 90s after leaving my full time job as network administrator for Macs and very quickly got a position working in NT network administration, not because I read books on Networking Essentials and NT Workstation, but because I had solid verifiable work experience in IT. At the end of my certification classes I was the only person to be working full time in network administration. Even the help desk and hardware support people hadn't been able to leverage the MCSE card in order to advance in their current jobs. I can truthfully say the entire MCSE experience was a joke. The only worthwhile component was TCP/IP, the rest of what I needed to know to transition from Macintosh to Windows management could have been picked up in a NT Server for Dummies book. In order to be successful in IT entry level workers need to gain actual work experience. Forget getting every silly cert that comes out, everyone has them and most of them don't know the first thing about actually working with technology and people. My advice is to get experience anyway you can. If that means volunteering or taking a job sweeping the floor at CompUSA and working up to sales, repair and beyond, then that is what it takes and has always taken to be truly successful in any career. Don't worry about the money, it will come in time as you become more valuable to an employer. Once you are working THEN get certified if you must, but certification without experience is putting the cart before the horse. The jobs are there for people with the skills to fill them, you must be realistic about salary levels and willing to relocate if necessary. |
| 5/2/02: Paolo says: |
Your statement that people that are out of work now are the "poor performing ones" is ridiculous and shows how shortsighted you are. Since most layoffs are done on a "we'll keep our friends" basis more than on pure merit a better definition of those people would be "the ones who did not kiss butt". When entire departments are laid off do you really think that the people inside are all bad or not performing? Think again and please spare us with all those titles that don't mean squat. |
| 5/2/02: Greg Neilson says: |
Paolo, I wasn't branding everyone laid off as being poor performers, although I can see how you might have interpreted me as saying that. What I was attempting to say was that poorer performers once laid off will find it very tough to get another IT role. |
| 5/2/02: Jeff Headley says: |
Every few years I experience a shift in what skills I need to keep up with the next wave in IT. Many companies delay upgrades and major changes as long as they can, and then suddenly look for "Superman" with all the skills they want to be able to catch up again. I think we're headed into one of those rounds. Many companies haven't even upgraded from NT4 to Windows 2000, while Microsoft and Sun are sinking huge amounts into Web Services, calling them .NET or .ONE. Someone's likely to come up with some new "must have" technology about the time that these companies discover they have to replace aging hardware and software. Who will they hire at this point? The few people who've managed to keep up with the changes. So I'm putting in a lot of study time and picking up certifications as a form of job security: when the next wave comes I want to still have a decent job. I did this early 90s when Desktop trainig was still making good money, by pushing myself into networks and databases. I can see now that XML and .NET programming will divide programmers who know it from those who don't. To use sailing terms, this lull is the time I'm repairing my sails so that when the wind blows a new direction I can pick up and go. |
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