You don't need to be an avid follower of technology news to know that one of the most troubled sectors in the industry is the Web design companies.
These are the firms, large and small, that do everything from basic website design to bolting on high-end features such as databases, search engines, transaction software, programs that let customers talk to service representatives, bring together internal workgroups to collaborate on projects or monitor systems within a company.
A year ago, even less, Web design companies were the sexiest edge of the Net frontier, the show business end of tech. The old era consultancies such as Deloitte & Touche, PriceWaterhouseCoopers and Andersen/Accenture were so square, all pocket-protectors and ties next to new media's clubbing wear, company-wide Quake sessions and bodypiercings.
Web companies were the cool acquisitions for more staid Irish companies, such as Horizon and Eircom. Some flashy mergers were announced.
Now, the sector is the front line in a backlash against tech, particularly after the high-profile fall of Ebeon. Every company in the sector has felt the reverberations. Potential clients are fearful of this sudden instability and are holding back on projects, not least because they worry whether their developers of choice will be the next to go, leaving their project in mid-air.
Potential clients that have felt pressure to upsize on the Web - from Web-embracing dot.coms to bricks-and-mortar companies - have a new-found reticence to spend when the economic forecast is so unclear. The massive amounts of venture capital that were poured into Internet-based companies, the mainstay of the Web design industry, has suddenly dried up as bottom lines became more important than lines of flashy code.
And many companies simply, and suddenly, don't trust the Web. Everyone's saying it's all gone wrong, so who wants to be the dumb bunny company that actually goes out and spends on Web projects? In other words, everyone seems to be waiting to see what happens next, just as many companies waited ages to make their first moves onto the Web. Many Web design companies went from a slow and steady build-up of clients, projects and staff in the mid-to-late 1990s to a sudden, manic explosion of work. In the space of two or three years, many of the Republic's Web companies grew tenfold or more. Some of the pioneering companies in this area are now very large, boasting employee rosters of 50 to 100 people. But ask any of them and they'll tell you the work is drying up at a frightening rate.
I think two observations are important here: first, the Web folks are, in part, suffering from some long-brewing and entirely justified resentment by confused companies that were pushed to make large investments in sites with "features" they didn't need. Too many Web companies have been set up, run and staffed by people with poor business sense, no ability to understand clients and what they need from a website, and no ability to talk them through a project. The February 13 issue of Red Herring magazine has a hair-raising article about just how bad such companies can be, headlined The Consultancy Fiasco: Fools and Their Money. That about says it all: clients don't know what to look for and most don't find the Web company with the maturity and skill to tell them.
On the other hand, companies are foolish to sit back and delay Web projects, especially with companies they know and trust, which have done good work for them in the past. Why? Because the Web is going to remain a central medium for business, whatever happens in the current, overdue shakeout. Sit on your projects and you delay your company momentum.
More worryingly, the result of the Ebeon collapse here may pull down many good Web design firms. A year from now, the Irish corporate world may have to choose between small, inexperienced companies with no business acumen, and the huge, expensive old-style consultancies. That vital, creative middle realm of indigenous firms may not survive the current, shortsighted pinch. That means businesses will pay later for their reluctance today.
klillington@irish-times.ie
