The dot-com bubble 10 years later: What it meant for enterprise IT

The dot-com bubble didn’t leave a lot of room for IT departments.

Many media organizations on Wednesday took a look back at that moment of heady excitement when Nasdaq hit its peak of 5,048.62 and everything seemed possible, at least online. The best of the dot-com bubble retrospectives, at least pictorially, is not surprisingly on Wired magazine’s site.

This was the dawning of the “e-business” age as we knew it. It was also the point where everyone was talking about the marriage of content and distribution as “convergence.” (It would be years before that marriage crumbled so badly many firms probably wish they’d signed a pre-nup). The dot-com bubble meant big things for investors, for entrepreneurs and even for print media, which saw fatter issues than they may ever see again. For IT managers, I suspect the impact was far more muted.

IT departments didn’t necessarily see major benefits from the dot-com boom. They probably saw a lot more marketing – I would argue the boom benefited marketers more than anyone – but the process of setting up those first brochureware sites didn’t yield the kind of long-term benefits that, say, the rare successful ERP rollout did. A few firms probably got the go-ahead for online payment processing, where appropriate, and perhaps were able to bring on development staff for some portal-related work, but that’s about it.

More than one IT manager I knew at the time left the back office entirely to go seek out startup nirvana. There was also a certain concern over IT skill sets and the so-called “brain drain,” but I think that was more a result of confusion than anything else. If there was such a thing as dot-com skills, they were not necessarily the same as those required to manage a fleet of PCs, a data centre or a pool of storage resources. If there was increased labour market demand for technology professionals, it may simply have been because there were more firms sprouting up that needed the fundamental IT infrastructure up and running as quickly as possible.

In some respects, the bursting of the dot-com bubble may have been a boon to IT departments. In very short order, vendor choice consolidated among players who were easily able to supply their needs. Knowing that not anyone would buy anything just because it was offered through a Web site probably also made it easier to reset management priorities around IT spending. Over time, the real value of the Internet as a connecting point and repository of information would become more clear, which is always useful to the people who end up running this stuff.

One area of the dot-com bubble that changed IT? Mainstream perceptions about technology. Although the desktop PC had already revolutionized workspaces, dot-coms made technology, and those who were proficient in technology, appear much more creative, inspiring and connected to everyday life (Web 2.0 hasn’t necessarily managed to perform the same trick, social networking did for a while). And despite all those business failures, most companies today rely on their dot-com presence to reach customers, and on many other portals who act as suppliers, content distributors and provide other useful services. Sure, the bubble eventually burst. That doesn’t mean it was completely empty.



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Jim Love, Chief Content Officer, IT World Canada
Shane Schick
Shane Schick
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