• IT Job Market, IT Jobs and Job Trends

    What is the Zander Report? At Project One we’re all about IT jobs, IT careers and IT consulting opportunities. Every day we read business and industry sources to keep the pulse of the IT job market, as well as the general management, marketing and technology trends that affect hiring.

  • Follow Us: LinkedIn  Twitter  Facebook  search-for-jobs-out

Wednesday, December 19th, 2018

From 2/11/09 InfoWorld...
A series of announcements suggest 35,000 or more tech-vendor workers lost their jobs this winter;  the real figures are far, far less.

From the constant drip of tech industry layoff announcements, you'd think huge numbers of IT workers would be out on the street. And certainly Cisco, Dell, Hewlett-Packard, IBM, Intel, Oracle, SAP, Sun, and others have announced thousands of layoffs. But the numbers they report don't reflect actual people losing their jobs, so the real tally of tech workers who have found themselves jobless is significantly smaller than you'd think.

"I honestly do not think the tech sector is in as bad a shape as it might appear," says Frank Scavo, managing partner at Strativa, a technology management consulting firm. "IT executives have been quite conservative in their IT spending growth over the past several years. And when the economy took a downturn last year, they were pretty quick to make cuts."

[ Good IT news amid the gloom: Two firms project that 2009 will bring salary increases, InfoWorld reported last week that tech is still a safe career choice today, and despite the economy, certain IT skills remain in demand. ]

The grim initial picture
To be clear: The economy is bleak, and tech vendors are taking necessary action. "IT vendors are protecting themselves against what most now assume will be a weak market throughout much of 2009, with IT spending cutbacks spreading to other sectors like software applications and network infrastructure," explains IDC analyst Stephen Minton.

Indeed, last month saw a raft of layoff plans like no other in the portion of the tech industry that supplies business IT. Microsoft said it will reduce its workforce by 5,000, Intel will cut 6,000, Sun said an ongoing worker reduction could stretch toward 6,000, SAP revealed intentions to ratchet down its total headcount by 3,000, Oracle axed 500, and even IBM, which reported positive earnings, confirmed layoffs. Although Big Blue did not provide an exact number, a union Web site for IBM employees put that at about 4,200 and reported rumors that it could soar as high as 16,000. What's more, Dell warned in December that it would cut as many as 8,900 employees worldwide.

Late last week, Cisco Systems CEO John Chambers said the networking giant may eliminate 1,500 to 2,000 jobs, a move that Chambers said he hopes would enable Cisco to avoid larger layoffs like other tech stalwarts were forced to put into practice.

So from these announcements from just the major tech vendors, that's as many as 35,600 jobs lost, not counting the remainder of the 16,000 rumored layoffs at IBM or the 24,600 people Hewlett-Packard said last year that it would let go as part of its EDS acquisition.

Estimates elsewhere range from 125,000 to 200,000, but they include HP's layoffs from last year plus consumer-oriented tech vendors and telcos, such as AT&T, Sprint-Nextel, and Yahoo.

The real layoff numbers revealed
But InfoWorld's count of actual layoffs -- people who have lost real jobs -- from these business IT tech vendors is nowhere near 35,000. Instead, it's about 9,600. That's not good news for those who've lost their jobs, but it's not the kind of number that should cause a panic.

Why the disconnect? Because announced layoffs aren't actual layoffs. "It's smoke and mirrors," says Natalie Petouhoff, a senior analyst at Forrester Research, "to tell shareholders they're doing what they need to do." The announced numbers include vacant positions and planned positions, so eliminating them doesn't actually result in anyone fired. And the announced numbers include layoffs that may occur later on.

For example, in Microsoft's case, on the day it announced layoffs, Microsoft actually shed about 1,400 employees. The rest of the 5,000, it said, would come during the next 18 months. "Microsoft might be able to reduce headcount by that number in the next year and a half simply by not hiring in certain divisions," says Neil MacDonald, an analyst with Gartner.

Sun followed a similar tack when it said last November that it was reducing jobs. Then, in January the company started that process by cutting 1,300 people -- a far cry from the 6,000 job losses the company offered originally. 

IBM, for its part, was stingy with headcount details, but the union site http://www.computerworld.com/action/article.do?command=viewArticleBasic&taxonomyName=careers&articleId=9126878&taxonomyId=10&intsrc=kc_top. Intel said it would lay off employees as it closes four plants around the globe and said that some of the 6,000 people will be offered new jobs in other facilities rather than cut loose entirely. Thus far, Intel has not publicly revealed how many jobs have been eliminated; instead it said the cuts will come throughout the rest of this year.

Dell, meanwhile, advanced its restructuring in early January by saying it would move some manufacturing out of Limerick, Ireland, and lay off 1,900 workers there beginning this month.

Rumors have been swirling that Oracle will slash up to 8,000 people, though the Wall Street Journal reported that the apps vendor has cut 500 in North America thus far (Oracle has yet to disclose any specific numbers). And reports indicate that SAP has let go 300 to date.

All of these actual layoffs adds up to about 9,600.

Future remains murky, but hopeful
Of course, the current 9,600 statistic is sure to rise. But the reality is still far better than the 35,000 or more figures that the series of layoff announcements would indicate.

And no doubt, everyone hopes that the actual cuts now, coupled with a hoped-for turnaround in the economy later this year, will mean those potential future cost won't be needed, or at least not to the same degree. "Nobody is happy to be making these cuts in IT. The hope is that current layoffs and spending reductions will enable organizations to ride out 2009," says IDC's Minton. "Those tech providers that have costs under control now should be in good shape to profit from the recovery next year," agrees Strativa's Scavo.

From 10/23/08 NY Times...
Rising workloads and curtailed budgets related to the economic downturn are emerging as a major source of workplace stress that is affecting productivity. Gary   Could economy cause IT pros to crack? By Denise Dubie   IT professionals taking on more work in light of the current economic climate identified rising workloads as the greatest source of workplace stress, according to research from Robert Half Technology.

The IT staffing and consulting firm has released results of a poll of 1,400 CIOs that asked what stresses IT professionals most. More than one-third (36%) reported increasing workloads as the primary source of workplace worry. The pace of new technology followed, with 22%, and office politics taxed some 18% of respondents. The survey revealed that other stressors for IT professionals include work/life balance issues (11%) and commuting (7%).

"Too much work may sound like a relatively good problem to have in today's uncertain economic climate," says Katherine Spencer Lee, executive director of Robert Half Technology. "But overstressed IT workers are unlikely to perform their best. The pressure of mounting workloads, combined with ever-evolving technologies and office politics, can quickly erode morale and adversely affect productivity."

The survey results should not be shocking, considering the pace at which IT budgets are being cut and hiring plans frozen in response to recent economic turmoil.

In June, for instance, the Society for Information Management polled more than 300 IT executives about their plans for IT spending in 2009, and in early October released results that showed 44% planned for bigger budgets and 43% intended to increase staffing. Three-quarters of those polled also expected to see IT staff salaries increase in 2009.

Yet a more recent tally from the CIO Executive Board revealed strikingly different spending plans. The late September survey of some 50 CIOs by the association for IT executives showed that more than half of those polled have put nonessential projects on hold and about one-fourth have decided to freeze IT hiring. And 61% of those surveyed admitted they were re-evaluating their 2009 budgets.

John Turner, director of network and systems at Brandeis University in Waltham, Mass., said during an interview earlier this month that his IT budget has been directly impacted by the current economic crisis. "Our operating expenditure budgets have been frozen and cut, and we currently have a hiring freeze in effect," he reported. "There is an obvious direct financial impact to our institution when there is this amount of uncertainty in the market."

Janco Associates in September declared that financial firms' woes, would "glut the IT job market." According to Janco's estimates, more than 230 IT professionals at Lehman Brothers who make US$250,000 or more a year will be out of a job by year-end. At Merrill Lynch, more than 180 IT professionals making more than $250,000 a year will be without work as well, Janco says.

IT professionals say they have seen workloads increase and job performance suffer. A recent discussion in Network World's online community showed that taking on more work could prove beneficial to some IT professionals, but others argue it could cause premature burnout.

"While I commend all those IT people putting in the extra effort, they need to understand that they are downgrading their worth. If you're a salaried employee, you are paid based on 40-hour weeks. All this added responsibility (skills) usually translates into 60-hour weeks or more, with no increase in pay," one comment reads. "I have seen a lot of people burn themselves out, become experienced in everything and good at nothing."

From 12/1/08 WSJ...
The credit crisis and slowing economy are creating new pressures for CFO's, spurring turnover and increasing demand for experienced finance professionals.  WSJ - 12/1/08

Corporate Finance Chiefs Face New Pressures... Turnover of CFOs at Major Companies Rises Sharply and Outpaces CEO Departures Amid Credit Crisis and Slowing Economy

The credit crisis and slowing economy are creating new pressures for chief financial officers, spurring turnover and increasing demand for experienced finance professionals.

CFO turnover hit a 13-year high in 2007, and accelerated earlier this year. Executive-search firm Crist Kolder Associates says 19.5% of finance chiefs at Fortune 500 and S&P 500 companies left their posts last year, up from 14.1% a year earlier. By comparison, 13.2% of those companies changed chief executive officers last year.

In the first seven months of 2008, 70 CFOs departed these 659 companies, compared with 49 over the same period last year. The average CFO's tenure is 4.8 years, down from 5.5 years a year ago. The average CEO stays in office for 6.2 years.

Chief financial officer is "the least secure job in corporate America," says Gordon Grand, head of CFO recruiting at search firm Russell Reynolds Associates.
Alcatel-Lucent SA last week said Hubert de Pesquidoux will leave the telecommunications-equipment maker after 13 months as CFO. In October, Ford Motor Co. finance chief Don Leclair announced plans to retire. Procter & Gamble Co. will replace longtime CFO Clayton Daley on Jan. 1, and by year's end Sears Holdings Corp. will bid farewell to its third CFO since March 2005.

Other blue-chip companies that changed their CFOs in 2008 include Oracle Corp., Google Inc., Walgreen Co., UAL Corp. and Allstate Corp. CFOs at some financial-services firms left or were ousted amid meltdowns, bailouts and takeovers.

Recruiters and finance chiefs say CFOs are quitting or being ousted because the demands of the job are growing. CFOs were handed new responsibilities in 2002 by the Sarbanes-Oxley corporate-reform law. This year, many had to scramble to keep their companies afloat when credit markets dried up.

CFOs also handle outreach to investors and serve as strategic advisers to CEOs, but close ties to a CEO can make finance chiefs vulnerable when the top job changes hands. Some companies are eliminating the role of chief operating officer and giving CFOs more operational responsibilities.
The CFO "gets asked all of the hard questions," Mr. Grand says. "When the numbers don't work, the accountability is enormous."

The surge in CFO turnover puts a premium on finance veterans. Dessa Bokides says she received about a call a week from recruiters since stepping down as CFO of Denver real-estate-investment trust ProLogis last year. She worked as chief operating officer for an educational start-up and recently was named global treasurer of GMAC Financial Services.

"For a long time, there was a real accounting emphasis on CFOs," she says. "But CEOs have realized that they need a business partner who is forward-looking [and] who knows how to talk to the markets and set the financial strategy."

As demand for CFOs rises, so does pay. The median compensation for finance chiefs in the S&P 500 rose 5.2% to $2.9 million last year, including salary, bonuses, the value of equity grants and other compensation. The increase was bigger than the 1.3% jump in CEO compensation, according to data tracker Equilar Inc., of Redwood Shores, Calif.

Joseph Zubretsky joined Aetna Inc. last year as CFO at a salary of $700,000, 23% more than predecessor Alan Bennett was paid in 2006. Mr. Zubretsky also is eligible for a larger bonus than Mr. Bennett was, and received a $6.5 million equity grant as compensation for equity he left behind at his former employer, Unum Group. In a Securities and Exchange Commission filing, Aetna said it believed the package "was necessary to induce Mr. Zubretsky to leave" Unum and join Aetna.

Some companies, including eBay Inc. and Rohm & Haas Co., this year granted their CFOs special bonuses or equity awards valued at $1 million or more. "This is actually the biggest and best sign that CFOs are increasingly important and that companies are making an extra effort to retain top finance officers," says Equilar research manager Alexander Cwirko-Godycki.

CEO turnover contributes to CFO churn, particularly as finance chiefs increasingly act as partners and advisers. Over the past five years, one-third of companies with a new CEO changed CFOs within 12 months, Crist|Kolder says.

Andrew Bonfield resigned as CFO of Bristol-Myers Squibb Co. this year, shortly after James Cornelius was named permanent CEO. Mr. Bonfield had served as Bristol's CFO for more than five years and says it was "time to do something different." Mr. Cornelius "needed somebody who was going to be committed to working with him for the long term," he says.

Mr. Bonfield says recruiters have approached him with more than 50 job opportunities since he announced plans to leave in February. "There is plenty of opportunity out there," he says. "It's finding the right one that suits you as an individual."

Some experts expect the high turnover to continue amid the slowing economy and depressed stock market. CFOs "will absolutely bear the brunt and, in some cases, take the fall," says George Herrmann of Right Management, a unit of Manpower Inc. "All of that stuff has really made the job, in a nutshell, less fun than it used to be."

From 10/13/08 ComputerWorld...
Telecommuting has been steadily gaining in popularity.  If your company is considering telecommuting options, this article from ComputerWorld raises important questions & issues.  For example,
.  Should full-time telecommuting be an option?
.  How will you define and measure performance?
.  Will creativity suffer?
.  How will telework affect collaboration?
.  What about employees "left behind" in the office?
.  Do you have an exit strategy?

Also, learn why Intel pulled the plug on telecommuting. 

Telecommuting is back on workers' radars in a big way these days, thanks to gas prices that were a whopping 30% higher this summer than last.

Telecommuter wannabes are lining up outside their bosses' offices with work-from-home plans in hand, and many of them could get their wish this time around: According to WorldatWork, an association of human resource professionals, 40% more employers are offering telework programs this year than last year. Should your IT employees be part of that burgeoning crowd?

It's certainly tempting to say yes. Increasing fuel costs and heightened corporate environmental consciousness are magnifying many of the benefits of telework, including conserving fuel (and money), reducing traffic congestion (and CO2 emissions), and reducing space and energy use at the employer's facility. Employers also often find that they're better able to attract and retain talented workers with the flexibility and increased job satisfaction that telework programs offer.

All of that is driving a huge number of inquiries from organizations looking to deploy more systematic, companywide telework programs, says Josh Holbrook, an analyst at Yankee Group Research Inc.

That said, IT and telework don't have an unblemished record of success. In 2006, Hewlett-Packard Co. ended teleworking arrangements for hundreds of its IT workers. And early this year, Intel Corp. began requiring more than half the teleworkers in its IT group to report to the office at least four days a week. In both instances, the companies indicated that teleworking had had a negative impact on IT employee productivity and collaboration.

Although a few reversals of telework policy do not constitute a trend, those cases should caution technology managers who might otherwise be inclined to say OK to telecommuting.  "These instances get attention because they cut against the grain," Holbrook says. "The trend is overwhelmingly in the other direction."

Nevertheless, in some instances, managers or even whole business units have "gone rogue," he says, allowing employees to work from home without the right technology, policies and procedures in place. "It's very possible for a well-meaning manager to shove the employee out of the corporate jet without a parachute," Holbrook warns.

Some telework decisions are fairly obvious. Most managers wouldn't let a new, inexperienced employee telework until he had proved himself, for example. But there are other, more subtle aspects of a person's character and work style and a company's culture that can make or break a telework arrangement.

Computerworld talked with telework experts and IT managers to discover some of these nuances. Before you approve telework, make sure you've asked yourself and your employees these tough questions.

1. Should full-time telecommuting be an option?

Some IT jobs will never be candidates for telework. Either the employee is physically required on-site -- to repair client hardware, for example -- or the job requires a lot of communication, interaction and collaboration with others, such as managing relationships between IT and business units.
Other times, the situation is less clear. The work can be performed remotely, but should it be?

Telework is best for those with task-oriented jobs and for people who need little face-to-face communication, says Scott Morrison, an analyst at Gartner Inc. "Can they get through a day's work without leaving their desk?" he asks. "Then they can do their job remotely."

But just because they can doesn't mean they necessarily should. The most successful telework arrangements are those that still bring the worker into the office at least some of the time.

Why Intel pulled the plug.

When Hewlett-Packard CIO Randall Mott pulled IT teleworkers back into the office in 2006, he said he was trying to foster better teamwork internally. HP was in the midst of a major IT overhaul, consolidating more than 85 data centers into six facilities.

Low productivity on collaborative projects was also the reason for Intel's recent crackdown on IT teleworkers. The company's move was not a change in policy, but rather a decision to enforce the rules around its existing policy, says Intel CIO Diane Bryant.

As part of a corporatewide efficiency review, Bryant found that lax application of those rules had allowed many IT workers to telecommute who didn't closely meet the company's three criteria: that the job was appropriate for teleworking; that the employee was senior enough, mature enough and self-disciplined enough to work remotely; and that the remote employee would remain as productive in the telework arrangement as he was in the office.

That laxness had led to inefficiency. "There [was] a layer of inefficiency in fixing problems that would not [have been] there had the two people been sitting next to each together in the same building," Bryant says.

So Intel started requiring more than half of the 250 IT teleworkers -- 150 out of 250 -- to report to the office at least four days a week.

Although Bryant is frank in her assessment of the current state of remote work -- "Telecommuting inhibits collaboration," she says -- she has high hopes that collaborative technologies such as videoconferencing and online social networks will improve in performance and decline in cost enough to enable broader teleworking in the future.

Dennis Cromwell, associate vice president for enterprise infrastructure at Indiana University in Bloomington, lets 10 to 12 of his 75 employees telecommute -- but not every day. They are mostly systems and database administrators who work alone on the computer and communicate chiefly via phone and e-mail. The arrangement has worked well -- so well that Cromwell has cut the number of offices that one of his teams requires from six to two.
Still, because he wants to keep informal communication flowing, he won't allow anyone to telework 100% of the time, except in rare circumstances.

2. How will you define and measure performance?

Most experienced managers stress that you must establish well-defined performance measures for teleworkers and then judge performance accordingly.

On the face of it, that approach seems simple enough. For task-oriented jobs, it's easy to measure performance in terms of output. For an IT support person, for example, you might track how many cases he handled per day and whether problems were successfully resolved.

But such an approach implies that it doesn't matter how much time it takes to do the job. And that raises a sometimes thorny question: Are you paying employees for their output, their time or both? Some people work faster or more efficiently than others, especially when working from home. If an employee hits his output working only four hours a day, is that a win-win situation or poor use of that employee?

"People say they manage by results, but they also like to know whether the person is only active a few hours a day," says Eric Spiegel, CEO and co-founder of software start-up XTS Inc. In a previous job as an IT manager, Spiegel had bad experiences allowing staffers to telework. Members of his team were sometimes unavailable during work hours, and he had trouble scheduling meetings.

To avoid such problems, he says, you should decide upfront whether meeting deliverables is enough, or whether you will require employees to be at their phone and computer at certain times and for a certain number of hours.

3. Will creativity suffer?

Beyond the hours-vs.-output debate, there's a larger question that pertains particularly to jobs where deliverables can't be easily quantified: Are you getting the same level of intellectual investment from your remote employees as you would if they were in the office?

In software design, for example, creative ideas can be the most valuable output. Should you measure performance based on creativity? Will workers be more creative at home -- or less?

Maybe you should measure quality rather than quantity. If so, what constitutes high quality? The answer will depend on the person and the type of job. The important thing is to have a frank discussion of what's expected -- including intangibles like creativity -- before you allow an employee to telework, with the understanding that the arrangement could be changed if expectations aren't met.

Today, all seven of Spiegel's employees telework. The difference, he says, is that they are all senior-level people whom he personally hired. Thanks to stock options and equity interest, they are highly motivated.

As an added bonus, Spiegel doesn't need office space at this point in his young company's development.

Even so, he advises managers to proceed with caution. "If I had to go back and manage a support team at a Fortune 1,000 company, I'd take a different stance," Spiegel says. "I'd want more control over what teleworkers are doing."

4. How will telework affect collaboration?

Think about the culture of your organization and how the employee fits into it. Some people are naturally creative, innovative and inspirational, notes Robert Keefe, president of the Society for Information Management and senior vice president and CIO at Mueller Water Products Inc. These people stimulate discussion and generate ideas, and others like to work with them.
"Some people are like the gel that holds the organization together," says Keefe. The organization would lose something if those people worked remotely 100% of the time. "That's a very soft intangible, but something that's often overlooked in team dynamics," says Keefe.

Communication is a related factor. Some companies are more reliant than others on informal communication, where an employee just walks down the hall to IT to solve a problem or hash out an idea, Holbrook notes. Moving a key IT employee out of that picture could upset that delicate balance.

For example, Intel relies on a high level of collaboration, according to Intel CIO Diane Bryant. The company found that projects were completed much more efficiently when all the IT workers were at one site rather than spread out over two or more sites -- or in remote locations.

5. What about employees 'left behind' in the office?

Timothy Golden, associate professor in the Lally School of Management & Technology at Rensselaer Polytechnic Institute, published a study earlier this year suggesting that allowing some employees to telecommute can decrease job satisfaction for co-workers who remain in the office and increase the chances that they will leave the company.

Golden studied a sample of 240 professional employees from a midsize company. The study found that the more people in the organization who teleworked, the less satisfied the officebound employees were.

There could be several reasons for this, according to Golden. First, there are fewer opportunities for workers to get to know one another, which could impede good working relationships. Second, the officebound workers may find themselves bending to accommodate the teleworkers -- for instance, they have to schedule meetings around when teleworkers are going to be in the office.

And third, office workers may be more likely to be tapped for certain tasks simply because they are handy, whereas the teleworker is left undisturbed. "The teleworker may very well be available," says Golden. "but they aren't perceptually there in the moment."

While telework has gone smoothly for the most part at Cox Enterprises Inc., that misperception of availability has been a problem, says John Bell, assistant vice president of information systems engineering at the broadband service provider.

"Someone will stop by an office, and the door is closed and the lights are out," he says. "People think he's not available or that they may be imposing if they call him at home."

To combat that perception, Cox has started requiring teleworkers to post their schedules on their doors so other staff members know when they are available.

Golden suggests other ways to ensure that in-office employees aren't inconvenienced by at-home colleagues, including requiring all employees to be in the office at certain times or on certain days; reshuffling responsibilities so officebound employees aren't dependent upon remote workers; and scheduling informal social times, separate from formal meetings, to reinforce trust and camaraderie among the entire workforce.

6. Do you have an exit strategy?

It may seem counterintuitive to be thinking about an exit strategy while you're trying to approve a telework arrangement, but experts like Keefe suggest that very thing.

Even as he's hammering out details on how often an employee will need to come into the office, Keefe puts a time limit on the teleworking arrangement. "You don't want to set a false expectation that this is the way it's always going to be," he says. "It's really highly dependent on the role they are in currently, and things change."

A new department manager may prefer to have workers in the office, for example. Or an IT consolidation project might require employees to come back to the office.

Particularly if the person is a high performer who might come up for a promotion, it's important to note that he might need to return to the office if his role changes.

Managers should also consider the possibility that telework can become too good of an offer for some workers. Strong performers might forgo advancement, or even leave the company, in order to continue teleworking. "It becomes a lifestyle," notes Keefe. "I've had a couple of key people leave the organization, so now I'm more cautious about that."

Ironically, the opposite situation can also occur: Employees who pushed for and received permission to telework may find it's not as wonderful as they expected. They may feel disconnected from the workplace and the office banter. Rather than admitting the mistake, they may look for work in another office.

In fact, there is a higher degree of churn among teleworkers today than in the past, according to Sean Ryan, an analyst at IDC. Statistics indicate that telework tends not to be a permanent arrangement, he says. "They telecommute for a while but then go back into the corporate world," Ryan says.

Indeed, research from 2005 published in the Journal of Management suggests that allowing insufficiently screened employees to work more than three days a week outside of the office results in long-term decreases in productivity and morale and increases in staff turnover. "They move on to jobs where they feel more included," says Gartner's Morrison.

The consensus among managers who have had it both ways is that telework should never be an all-or-nothing proposition. And whether you ultimately decide to allow an employee to work from home full time, part time or not at all, your decision should be the result of careful consideration of the needs of the worker, his colleagues and managers and -- most important -- your business.

Obama's New Tech Agenda

November 16, 2008

From 11/16/08 eWeek...
Here's what can be expected as part of President-elect Obama's technology agenda, as it pertains to:
. Network Neutrality
. H-1B Visas
. Patent Reform
. Broadband Rollout
. Spectrum
. Clean Energy
. Free Trade
. Health IT
. Open Source Government

President-elect Barack Obama brings a decidedly different technology agenda to the White House than President Bush did eight years ago. Widely considered the most tech-savvy president ever elected, Obama sees an activist government - tinkering here, readjusting there and spending here, here and here - as the path to innovation and the future.

Since technology is the key to virtually all of President-elect Barack Obama's plans for sweeping changes in the direction of the country and the way Washington does business with its citizens, it is not surprising Obama brings a decidedly different technology agenda to the White House than President Bush did eight years ago.

Bush praised technology as a key driver of the economy and worked to remove government barriers such as laws, rules and regulations to let the free market make its decisions on winners and losers. Obama, though, embraces technology as the path to innovation and the future and plans to invest heavily in technology as the key to reviving the economy.

Network Neutrality

Would innovation blossom if virtually any legal Internet service or software program could run on any broadband network? Obama thinks so. Broadband providers such as AT&T, Verizon and Comcast do not, conjuring up nightmare traffic management scenarios. One of Obama's earliest tech campaign promises was to throw his support behind network neutrality, which would prohibit discrimination in the delivery of broadband services by providers such as AT&T, Verizon and Comcast.

Absent network neutrality rules, Obama said, "you could get much better quality from the Fox News site and you'd be getting rotten service from some mom and pop site. And that, I think, destroys one of the best things about the Internet-which is that there is this incredible equality there."

Prime example? In August, the Federal Communications Commission ruled that Comcast violated the agency's Internet policy when it throttled peer-to-peer traffic by BitTorrent, a clear discrimination against the P2P provider. The agency ordered Comcast to stop the practice but did not fine the cable giant. Comcast has sued to overturn the decision, claiming the FCC does not have the legal authority to impose the decision.

Obama has already promised to put network neutrality proponents on the FCC, but if Comcast wins its case against the agency (and many think it will) Obama is likely to put his support behind federal legislation to mandate network neutrality. His first choice, though, is to leave the issue with the FCC. All this will take time to play out.

H1-B Visas

The technology sector has long fought for an increase in H1-B visas, a specialized-occupation (i.e., tech-related) temporary worker. While Obama has said he will support a temporary increase in the H1-B cap, his heart is not in it. The president-elect, along with a number of Midwest lawmakers, does not see it as a long-term solution to providing the high-tech community with skilled workers.

Comprehensive immigration reform with an emphasis on retraining workers who lose jobs to offshoring is a top priority for Obama. As with under Bush, though, as long as H1-Bs are tied to immigration reform and its more incendiary border security and amnesty issues, the visa issue is likely to go unresolved with, perhaps, only a small bump in the number of H1-B visas.

A more likely scenario is an overhaul reform of the H1-B system. A recent U.S. Bureau of Citizenship and Immigration Services report said as many as 20 percent of the applications may be fraudulent or technically flawed. Cleaning up the system would free more H1-B visas for tech companies.

Patent Reform

Along with network neutrality and H1-B visas, patent reform is a top priority for Washington technology policy shops that want to limit infringement damages and install a process to weed out weak patents. So far, that effort has failed in the face of fierce opposition from the pharmaceutical, biotech and manufacturing industries.

Tech scored a major victory last year when the U.S. House approved the first significant overhaul of patent law in a half century, narrowing the definition of willful infringement and limiting infringement damage awards to the actual value of the technology involved instead of the overall value of the completed product. The bill also created a "second window" to challenge patents issued by the Patent and Trademark Office. The legislation, though, died in the U.S. Senate, putting tech back at square one.

Obama, it appears, is on tech's side in the patent reform battle that will surely resurface in the next Congress. Obama supports reform producing "gold-plated patents" to "reduce the uncertainty and wasteful litigation that is currently a significant drag on innovation." He's backing opening up the patent process to citizen review and giving the Patent and Trademark Office the resources to improve patent quality.

Broadband Rollout

You've read the numbers over and over: The United States is falling behind other industrialized nations in overall broadband penetration, putting the United States at a distinct disadvantage in the global innovation race. Like Bush, Obama wants affordable, universal broadband for all Americans. Unlike Bush, Obama may actually do something about it.

Obama wants to expand the USF (Universal Service Fund), currently a tax on consumer telephone bills dedicated to extending phone service to rural and other high-cost areas, to also cover broadband connections. Obama aims to redirect USF funds in combination with promotion of next-generation broadband facilities and new tax and loan incentives to greatly expand the reach of U.S. high-speed Internet services.

USF reform is currently before the FCC, where commissioners are seemingly deadlocked over expanding the system to cover broadband connections. An Obama FCC is likely to change that.


Obama wants a "smarter, more efficient and more imaginative use" of the nation's spectrum as yet another way to bring broadband to Americans.

The FCC, under Republican Kevin Martin, is already moving in that direction with its decisions to mandate open access for portions of its recently concluded 700MHz auction, to open the interference buffer zones between television channels for the use of white space devices and a proposal for a spectrum auction in 2009 that would require the winning bidder to provide a free wireless broadband tier to 50 percent of the United States in four years and 95 percent of the country within 10 years.

Republicans in Congress have opposed all of those proposals. Obama's election not only puts a Democrat in the White House, but Democrats also strengthened their majorities in both houses. More spectrum clearly signals a new day for wireless innovation.

Clean Energy

A centerpiece of Obama's campaign, Obama is proposing that the government invest heavily ($150 billion over the next 10 years) in smart utilities, electrical grids and meters. The investment, Obama claims, will pay off with the generation of five million new jobs, almost of all of them in domestic tech firms that dominate the global smart technologies field.

A smart electrical grid, for instance, can send data to power companies every 6 seconds instead of every 30 days, allowing the utilities to constantly monitor energy usage and, in theory, make adjustments to conserve energy and, potentially, reduce the need for more power plants.

Obama believes green IT is not only financially viable but also deployable in the short term. He also promises to spend big on renewable energy sources such as wind and solar, another growing area of technology.

Free Trade

Tech is not so keen on Obama's stance that any future trade agreements include strong labor, environmental and safety standards. As a U.S. senator, Obama opposed trade deals with Panama, Colombia and South Korea. During his campaign, he called for renegotiating NAFTA. Globalization, he wrote in opposing CAFTA, is "not someone's political agenda."

That would be Silicon Valley moguls who have never met a trade deal they didn't like, even if the murder rate among our trading partners' labor leaders is criminal.

Health IT

Since a recent PriceWaterhouseCoopers study concluded that Obama's overhaul of the U.S. health care system would cost the federal government $75 billion the first year alone, reducing the cost of health care is essential, and Obama is again turning to technology.

Most medical records are still stored on paper with all the inherent drawbacks that involves: coordinating care, measuring quality and reducing medical errors. Processing paper claims also costs twice as much as processing electronic claims.

Obama promises to invest $50 billion over the next five years to move the U.S. health care system to broad adoption of standards-based electronic health information systems, including electronic health records.

Open-Source Government

Obama plans to bring the same tech-centric focus of his campaign to his new government. Obama spoke often on the campaign trail of using technology to make the government more open to citizens.

Among his proposals: making more government reports and data available online; Webcasts of all government meetings; and creating tech tools to allow users to track federal grants, contracts, lobbyist information and earmarks. He even proposes a five-day public comment period on any legislation pending before the White House.

Given Obama's bent to make the government more transparent to citizens, for the tech entrepreneurs who pioneered manipulating a flood of public information available during the campaign into actionable data, the future looks bright.

Page 50 of 50

Site Search

Project One, Inc

450 Seventh Avenue, Suite 2509
New York, NY 10123

7350 East Progress Place, Suite 100
Greenwood Village, CO 80111

Northeast (NY): 212-268-5800
Nationwide: 877-677-6566

LinkedIn  Twitter  Facebook

You are here: Home | About Us | The Zander Report