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To B2B or Not To B2B - and Other Questions, by Bill Baloglu & Billy Palmieri

Dot-coms are crashing and burning all around us. Yesterday's "hot" companies are seeing their stock values plummet, triggering massive layoffs. Even "sure bet" companies seem to be going out of business everywhere you look.

This dramatically changing, high-tech landscape is causing fear and confusion in Java engineers. What sensible, intelligent person wouldn't be shaken by the current state of affairs in the dot-com world?

As a Java engineer, what are your options? What does it all mean? And what should your next step be?

For example, on the consulting front over the past few years, many skilled engineers took a cut in their usual contracting pay to join a dot-com in exchange for huge stock options. They took the risk in exchange for a shot at huge rewards - and the chance to be in on the ground floor of the next eBay.

Now many of those start-ups have crashed and burned, leaving engineers with thousands of worthless stock options - or no job at all. From their perspective, they were taken for a ride.

What's the solution now? Some engineers who were burned in the dot-com crash feel it would be best to join a huge corporation, such as Sun, HP, or Cisco, for the sense of security working for a large company can provide.

Maybe I won't make as much money as I did contracting or get as many stock options as I did at that dot-com; at least I'll have an inner feeling of security knowing the company won't go belly-up at a moment's notice.

But ultimately no position in high tech is totally secure. The days of getting a job at General Motors and knowing that you'd work there for 30 years are long gone.

Even at large companies major projects get scrapped, groups get reorganized or eliminated, and the door to job security keeps revolving.

Those familiar with the Web generation of technology know that technology changes every 18 months, ways of doing business change, and your skill sets can quickly become obsolete.

Before totally discounting opportunities at smaller, entrepreneurial companies, look closer at what can be learned from the current dot-com meltdown:

  • The internet isn't going away.
  • Companies that support and do business on the Internet are here to stay.
  • B2Bs and infrastructure companies are faring better than B2C companies, which became overvalued based on market share versus potential for real revenue.
  • Venture capitalists that once invested like mad in brand-new start-ups are now focusing on third rounds of funding in companies that are more secure deals.
  • Venture capital funds are at their highest levels, and VCs still have plenty of money to invest. However, we're starting to see larger amounts of VC investments going into a smaller number of more select companies.
  • Pre-IPOs in their post-second round of funding with solid business models and management teams are still a good bet.
The illusion that every high-tech company is failing is just that: an illusion. The percentage of new companies that have failed is the same as it is in any given year. The difference is in the huge amount of new companies that went into business, which resulted in a higher amount of total companies that failed.

But what's the bottom-line result of all this for Java engineers? Rates and salaries are likely to go down from where they were in the crazy dot-com "boom days," but should stabilize as the market gets healthier.

  • Senior engineers will always be in demand and aren't likely to see significant changes.
  • Intermediate engineers may see some changes in their rates, and it may take about two weeks for them to find a job (as opposed to five days).
  • Junior engineers are most likely to be laid off first and may see pay rates go down (after all, there are a lot more junior engineers). This is an ideal time to enhance your skill sets with recent technologies that will increase your marketability.
Across the board, sensible Java engineers will consider being flexible about their current rates or salaries in exchange for long-term opportunities in a market that's headed for increasing stability.

Author Bios
Bill Baloglu is a principal at Object Focus (www.ObjectFocus.com), a Java staffing firm in Silicon Valley. Prior to ObjectFocus, Bill Baloglu was a software engineer for 16 years. He has extensive OO experience and has held software development and senior technical management positions at several Silicon Valley firms. [email protected]

Billy Palmieri is a seasoned staffing industry executive and a principal of ObjectFocus. Prior to ObjectFocus, he was at Renaissance Worldwide, a multimillion dollar, global IT consulting firm, where he held several senior management positions in the firm's Silicon Valley operations. [email protected]


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