Most economists say that the recession has bottomed out, but there is no agreement on when the recovery will take place. In a recent survey of CIOs conducted by Gartner, 32 percent expected a recovery by March 2010, 38 percent by September 2010, and 24 percent beyond September 2010. The rest did not seem to be sure.
From the designer perspective, the survey shows that after the recession IT companies will work hard to drive the types of innovations that will keep customers interested in new things. But to make money in this environment, the challenge will be to drastically cut down costs. With virtualization emerging as the latest cost saving technique, designs of virtualization projects are expected to pick up. Data center consolidation is another area that CIOs believe will help them reduce operation cost on a per-transaction basis. The average cost of a transaction has been falling, but the volume of transactions has been growing at 10-to-15 percent per year. The unit storage cost has continued to fall, but the spending on storage has steadily risen because of large storage required. CIOs will not like to spend any more than before on data-center consolidation. This means data-center consolidation offers another challenging area to designers after recession.
Cloud emergesCloud computing is yet another important enabler of cost cutting. CIOs look upon cloud more as a sourcing option than as a technology. Instead of incurring huge fixed expenditures by sourcing from the likes of IBM and Microsoft, companies will prefer spending less on variable expenditure by sourcing from a cloud. Security problems still remain, but economic considerations are weighing more over security ones, and cloud will be an important element in post-recession designs. Designs related to security aspect of cloud will be a hot subject too.
Multicore is another area that will see extensive design activities. Multicore fits in well with the theme of doing more with less and getting to market faster. Multicore enables operations in parallel, enabling more performance through the working in parallel of two, four, six, or more engines. However, one stumbling block is to get performance at lower power. Power has been an intriguing design issue as designs moved deeper and deeper into nanometrics, and multicore has added to the complexities, and to design challenges.
Scaling will be seen in a new perspective. Designers are always going to scale down. But probably they will be more cost conscious than before, and will find sense in scaling only if the extremely high scaling costs can be amortized by high volume. There are a lot of opportunities at higher geometries. For instance, in automotive, the primary technology node is 90nm; in industrial, 130nm; and in analog, yet higher. With reasonable business opportunities available at higher nodes, designs in these segments should be more at these nodes than lower ones.
DifferencesThere are differences in the way CIOs are facing the current recession as compared to the earlier one in 2002, when companies put projects on hold and drastically cut down staff. In the current one, though both these measures are being pursued, Gartner survey says there has been a greater emphasis on cutting back on consultants, software and hardware purchases, and renegotiating vendor contracts. In 2002 outsourcing was looked upon as the best bet to cut down costs. Besides manufacturing and services, more design activities were outsourced, especially to India. However, now CIOs are more focused on shared services and recentralizing IT, while creating scale and drive efficiency. While it is true that some companies are questioning the wisdom of outsourcing in view of quality problems, I believe that outsourcing has still a lot of steam left in it with costs in India and China far lower than those in the U.S. and Europe. Notwithstanding the differences in the two recessions and the new focus of CIOs, more designs will come to Asia after the recession.
