The mayhem in the financial services sector over last week is hard to fathom. Approximately over four trillion dollars has been lost between Oct’9, 2007 and Sept’12, 2008. George Colony from Forrester presents an interesting statistics of contributions from the financial services sector towards the overall US IT spending market and fears a slowdown in the tech market from a collateral US recession, rather than the collapse of the Wall Street.
Under the current circumstances Java/JEE market will be the most impacted because of its strong presence in the financial services industry. While there might be some scope for integration projects consolidating various environments resulting from the mergers and acquisitions. However, staffing for such integration projects may not start until Q1 or Q2 of 2009 because the executives would wait till the dust settles down.
The slowdown would make the executives to look for cost saving options in application development, infrastructure management and project management areas, which impact the following service areas:
1. Remote Infrastructure Management (RIM): RIM would be considered as one of the avenues for reducing costs around operations. Additionally virtualization, cloud computing would lend support to this trend. The perception in the Indian market seems to be that Wipro may benefit from this area of outsourcing with the caveat that multinational organizations may outsource to their off shore offices instead.
2. Outsourcing of Software Development: Outsourcing to off shore centers for software development would also be looked as one of cost reducing options. However it should be noted that not all projects can be successful with off shore development model or remote management.
3. Project Management: Regardless of where the project is executed (in house or off shore), you need someone to coordinate various tasks with people distributed around the globe. Thus there might be a mild increase for staffing Project Managers.
4. IT Innovation: IT Innovation from these sectors would take a back seat because of the focus of many organizations would be on cost savings.
5. Java Pre Sales Consulting: The US domestic market for Java pre sales consulting will be adversely affected because of limited budgets and rescheduling of new projects. Outsourcing would be another factor affecting this market segment negatively.
While there might be decline in the Java job market. However from the chart below (trends plotted since January 2007 – Courtesy: SimplyHired.com), there seems to be some promise in PHP and Ruby based application development.
