Butler believes that companies of all sizes are heading towards using external services rather than developing and implementing applications internally. They will pay for an application service to be delivered to them, rather than dealing with a myriad of internal costs, such as staff, buildings, training and software licenses.
Despite the gloomy forecast for the near future, he expects web services and grid technology-based services to have a combined worth of $140bn (around £90bn) by the end of the decade – fuelling a level of growth never seen before in the IT industry.
Butler said: “IBM and Microsoft will be the first to feel the benefits from web services and grid technology adoption, and their aggressive early positioning in these technologies will start to pay off in late 2003.”
Until then, he says, the IT industry will have to batten down the hatches and wait for sunnier times to arrive.