Hair Raising Recovery
On Friday I blogged about AVIcode CEO Mike Curreri's intriguing management stunt, in which he promised to shave his head if the company made its Q3 financial targets. The really important news for AVIcode employees, though, was that Curreri vowed to pay back income lost in an across-the-board 15 percent salary cut the company had implemented earlier, by providing a quarterly bonus to affected employees. While the headshaving bit is amusing, the real news here is that AVIcode was able to turn its fortunes so decisively last quarter.
As Curreri tells it, things are picking up in the IT space, as cash-strapped shops are finally releasing budgets that he says "have been held for quarters." While the spending is being done very carefully, Curreri says AVIcode has benefitted from IT shops targeting application performance and health as a criticial business issue. He cites activity in AVIcode's end-user monitoring, SharePoint monitoring and System Center Operations Manager integration products for the success, though the company's stand-alone app performance monitoring products have done well also, he says.
So what really drove the successful Q3 turnaround? A recent Forrester Research report found that the IT market bottomed out in the first two quarters of 2009 and is now in the midst of a recovery. In 2010, the report says, IT consulting services are expected to increase by 11.7 percent. Curreri says that AVIcode got a jump on things thanks to an increased focus by IT shops to actively manage deployed applications.
"There were actually several factors that have been converging for several months. Most importantly, I believe, is the growing realization that application performance can and must be monitored and managed across the entire lifecycle of the application. It is no longer acceptable to throw the application over the fence to ops and hope for the best," Curreri says.
While Curreri expects the current recovery to be, and I quote, "slow and painful," he's optimistic about AVIcode's chances, due in large part to shifting priorities among IT customers.
"Good management of IT will be critcal to success in this environment; and application performance management solutions are now a requirement. Modern apps need modern management."
Are you seeing signs of IT spending loosening up, particularly in the area of application development? Email me at mdesmond@1105media.com.
Posted by Michael Desmond on 10/19/2009