State of the Austin Software Industry A-SPIN Jan 11, 2007

The VP Source A consulting and recruiting firm Over 20 years experience in the IT industry Backgrounds in strategic planning, merger and acquisitions, and hiring for IT Provide consulting and recruiting services for IT and IT related roles Maurie James mjames@thevpsource.com www.thevpsource.com

Agenda Growth Factors Forecast for IT Spend in 2007 Job Market

Growth Factors Signs of Growth Austin office market is experiencing the highest occupancy and rental rates since 2002 38% of companies surveyed in Austin plan to add workers in 2007 Q1 compared to 21% in 2006 Q4 (Nationwide the average was 23 %) Central Texas Reported positive job growth for nearly 3 years straight and 2007 calls for a repeat Austin is seeing 2.8% annual increase in net new jobs. For 2007, A&M University Economists predict 2.9%. 16% of companies plan to add IT staff in Q1 and 2% anticipate cutbacks. The net 14% hiring increase is the highest since 2001 Q4. Recent Technology IPOs projecting better 2007. Austin has not had a tech offering since July 2004 when Freescale went public 1 – Austin Business Journal 2 – Manpower survey – down from 47% a year ago Q1 3 – ABJ 4 – Austin American Statesmen 5- Survey conducted by Robert Half The job market in Silicon Valley for accounting professionals with experience filing documents with the Securities and Exchange Commission has gone gangbusters. investment bankers are hustling to win IPO business

IT Spend Based on CIO’s Surveyed 2006 38% Consolidate servers and adopt virtualization techniques To improve distribution of server tasks The transition of multiple smaller data centers into fewer larger ones 38% Plan to buy Software As a Service Such as Salesforce.com CIO Spending in 2006, McKinsey Quarterly February 2006

IT Spend Based on CIO’s Surveyed 2007 Flexible Architectures (64%) Service Oriented Architecture (SOA) Shifting to Global Standards 48% for the purpose of integration with external trading partners More Efficient Data Centers (28%) Desire to implement lean manufacturing principles Early adopters have been successful which encourages more to follow Smaller data centers have been consolidated into fewer, larger and hosted solutions What’s on CIO Agendas in 2007: A McKinsey Survey, Mckinsey Quarterly January 2007

Job Market Trends Increase in workforce mobility Company loyalty has declined Changing jobs for short term and superficial reasons is on the rise Turnover is on the increase Accepting counteroffers is now acceptable and expected Market needs will increase and resource pool will decrease as baby boomers start retiring en masse Decrease in students enrolling in IT programs

In Demand Windows Administration (77% CIOs) Network Administration (71% CIOs) DBAs Manufacturing sector sited with 19% planned increase in hiring Robert Half Survey of 1400 companies of 100 employees or more

Projected Hot Jobs Enterprise Software Architects with SOA experience SOA Quality and testing solutions Project Managers QA and Technical Leads with outsourcing oversight experience Traveling consultants Security related roles Customer support roles (help desk, client success) Now that companies are through with their proof-of-concept and play phases of Web Services-centric adoption (less SOA and more ABOS), they have to grapple with the real issues of evolving SOA: change and version management, testing in a production environment (runtime testing), quality assurance of all SOA artifacts including contracts, policies, schema, models, declarative composition and process metadata, and other forms of metadata, as well as deal with change-time and run-time governance that demands more than simply testing the code that exposes a Web Services interface.

Conclusion Projected growth and managing that growth will continue to lead to the hiring of key leadership roles The firms that can identify, attract, and retain the talent will be able to fuel growth You must be able to sell the “vision” of your company and gain buy-in from candidates that you have a plan and a great work environment You will see creative approaches to getting the attention of the top performers There won’t be enough talent to meet the demand so companies should form a strategy today to secure tomorrow’s talent The industry is slowly changing from hiring boards and contingency searches to more pro-active process driven planning We won’t return to the days of the internet boom where bonuses, recreational areas, and outlandish pitches like a new BMW for each employee (this happened in Atlanta) but you will see more creative approaches to getting the attention of the top performers.