Open source and cloud: Credit crunch busters

The economic downturn could be one of the biggest threats to face traditional tech vendors as businesses look to alternative technologies to help get them through the recession.

That's according to industry experts at The Intellect Annual Regent Conference 2009 in London, who said businesses will be looking at more innovative technologies to cut costs as well as prepare for the end of the recession.

Richard Holway, chairman of analyst house TechMarketView, said: "[In a recession] you actually get an acceleration in adoption of new technologies."

John Gantz, chief research officer and senior VP at analyst firm IDC, agreed. He said: "The economic crisis will force some companies to make technological changes they may not have made."

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Among these alternative technologies are software as a service, open source software and cloud computing - all of which go against the business models of the tech old guard.

Holway said some companies will find it increasingly difficult to remain relevant as businesses realise the benefits of this technology during and after the economic slump.

These emerging technologies will provide better value for money as businesses struggle with cashflow but could also prove to be better bets in the long term as well.

IDC's Gantz said: "Leading technology users will use the downturn to pull further ahead."

Holway added: "I think there are now bigger opportunities for change than in the [whole time] I've been in IT.

But he warned: "I believe the power of Microsoft over the next period will be severely weakened. The whole model that Microsoft has got is under severe threat."

Ian Smith, ex-regional senior VP for Oracle UK and now managing partner at AndersonBick Consultants, said: "SAP, Oracle - if they're not prepared to change, potentially, they are dinosaurs. If these companies aren't smart, they could become dinosaurs."

Kate Craig-Wood, managing director of hosting company Memset, said open source technology could also be a big winner as a result of the economic crisis.

She said: "I think the current period could be a catalyst for a large move to open source. Again, I think that's a big threat to Microsoft."