The IT industry is on the rebound according to C/D/H, a 20-year-old technology consulting company. And the rebound began at the beginning of this year.
“Somebody, on January 4th, the first day back to work, went over and flipped the light switch on. We suffered through ’09 like everybody else, and I fought like heck to not cut back on my staff — and I didn’t. I’m awfully glad I didn’t because everyone is busy,” said one of C/D/H’s founders, Paul Hillman.
“We had a record first quarter … and it doesn’t look like there’s any slowdown in sight.”
Hillman believes part of the reason for the sudden upswing was due to companies finally feeling like they could breathe again, having survived the economic meltdown.
“I think a lot of people really tightened their belts in ’08. I don’t think you could have squeezed blood out of a turnip last year,” he said. “In ’09, nobody was spending anything on technology and now, as the market is starting to light up, they’re realizing, ‘If I spend money on technology, maybe I won’t have to hire as many people.’”
C/D/H is based in Grand Rapids but also serves clients in the Detroit area. Hillman has seen both regions start to pick up, but Grand Rapids is doing so at a faster pace.
“Grand Rapids is rebounding much faster,” he said. “Detroit is going to be a long, slow road with the auto industry … but even in Detroit, it’s picking up.”
Of the many industries with which C/D/H works, Hillman said health care has seen the most growth.
“It even carried through the ’09 downturn. Historically, health care has been really underserved by IT — a very paper-based industry. It’s been reluctant to automate,” he said.
“All of the major hospitals, all of the major care providers have upgraded recently or are in the process of upgrading.”
The push for electronic medical record systems and heavier Health Insurance Portability and Accountability Act penalties for violations have contributed to the health care IT boom.
“(There is) a program by the government to help with physician order entry, and in order to do that, you have to have an EMR (system). The government has put money behind that for each doctor. If you’ve got a hospital with 400 or 500 doctors affiliated with it … that’s a good chunk of change,” he said.
“Plus, HIPAA got some new teeth this year: Now they’ve got some serious penalties for violations. Before, it was a slap on the wrist with a wet noodle. If you lose a whole file of people’s health information, it could be a couple hundred thousand, a couple million bucks if you’re not careful.
“There’s been a lot more concern about computer security associated with the hospitals lately.”
Besides health care, Hillman sees two areas of technology on the rise: unified communication and “cloud computing.”
Hillman gave an example of unified communication: “Back in ’98, (Rockford Public Schools) did a converged network, taking data, voice and video and putting it all on one wire. The advantage of doing that was significant cost savings. You didn’t have to have three separate systems driving data, voice and video.
“Here we are 12 years later and we call it something different: unified communications. In a simplistic way, it’s as if everybody’s telephone system had a big Ethernet port on it and you pulled a wire, plugged it into your phone system, then walked over to your computer and plugged it into your network. Then, suddenly, you can call from your computer; people who call in can call your computer. If you’re on a phone call, you can switch to a video call — it’s really exciting stuff.”
Cloud computing is based on storing information and running programs and more off the Internet as opposed to using a local server. For a long time, cloud computing was criticized for creating issues with security. But as the technology has improved, security has tightened.
Hillman compares the switch to cloud computing to the move toward power plants.
“Companies used to build their own power plants … so they could generate their own power. Move yourself up a hundred years and now we are going, ‘Why do I run my own e-mail system?’ Well, because before we couldn’t trust anyone to give us e-mail the same way we can plug into the wall and get power,” he said.
“We’re on the cusp of a millennial change where (people will ask), ‘Why do I have to run all these computers myself? Why don’t I just plug it into the Internet?’
“There are a lot of advantages to companies saying, ‘For things like e-mail, IM, telephone service and other stuff, I’m not going to have it on my site anymore. I’m not going to have a computer room where I have to worry about keeping it cool and then I’ve got to hire this guy to babysit it, and I have to back it up every day. … Why don’t I just plug into the Internet like I plug into the power grid? I’ll get my electricity from Consumers Energy and I’ll get my e-mail from Microsoft on the cloud.’”