Moore's Law, which predicts that the processing power of computer chips doubles every 12-18 months, has inexorably worked its magic. Today, a commodity home PC has far more processing power than the mainframes of the time-sharing heyday. And almost every organization, no matter how small, can manage to support a Windows-based file server and a small network. Similarly, the cost of storage, once calculated in dollars per megabyte, has fallen to pennies per megabyte. Today the limiting factor is not hardware or even software but people.
Companies find themselves hard-pressed to fill IT positions.
Stamford, Conn.-based Meta Group Inc. reports that the demand for IT professionals in 1999 exceeded supply by 400,000 jobs and projects that continued demand will result in 1.2 million unfilled IT jobs by 2005. The number of IT graduates, estimated at about 30,000 per year, can scarcely make a dent in the expected demand. The difficulty in hiring and retaining skilled people certainly played a key role in driving Clarent Corp., in Redwood City, Calif., to Corio when it made the transition to PeopleSoft from Intuit Corp.'s QuickBooks Pro. In addition, the entire task of setting up an internal data center capable of supporting a rapidly growing organization running a mission-critical application was too daunting to attempt. The Internet also makes a big difference between the time-sharing of the past and the ASP offerings today.