GM's Death Would Hurt The IT Industry - InformationWeek

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Commentary
11/21/2008
02:09 PM
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GM's Death Would Hurt The IT Industry

The mob is waving its torches and shouting, "Let them die! Let those fat-cat, private-jet flying dinosaurs collapse in a heap of rust dust!" Based on what I've read on some social networking sites, some of the most opinionated on this topic reside in Silicon Valley. Yeah, OK, let GM or another U.S. automaker go under...and then watch how that impacts the industry you work in.

The mob is waving its torches and shouting, "Let them die! Let those fat-cat, private-jet flying dinosaurs collapse in a heap of rust dust!" Based on what I've read on some social networking sites, some of the most opinionated on this topic reside in Silicon Valley. Yeah, OK, let GM or another U.S. automaker go under...and then watch how that impacts the industry you work in.It sure is nauseating to watch automaker CEOs fly into Washington on private jets only to grovel for money. And yes, I know, the tech industry is so cool and so hip and so NOW, while the manufacturers that helped make this country are so...yesterday.

But the breezy, who-gives-a-frick attitude about the U.S. auto industry supposedly on the edge of collapse? Wow. That's just plain foolish.

It's hard to get automaker CIOs to reveal specific IT budget numbers, but for those readers that make their paychecks as a result of the IT industry, I'd like to share with you some things I've learned.

Companies such as IBM, Hewlett-Packard, and EDS currently benefit from sizable chunks of $15 billion in IT services contracts GM doled out a few years ago -- and that's just for the services. Software companies big and small are part of the GM ecosystem. GM spends millions, if not billions, on Oracle software licenses every year. iRise, a California-based maker of visualization software, has GM as a marquee customer. And JDA Software now has GM as a customer through its acquisition of i2 Technologies.

GM's OnStar accident-response system, which handles 70,000 calls a day in the United States from GM drivers in need of help, is powered by databases, servers, and other technologies from Oracle, Oracle's BEA Systems, Sun Microsystems, and HP.

While Ford says it's not in as bad a shape as GM, Microsoft and Ford have a cool, positive thing going with their Sync partnership.

These are just little tidbits gleaned from my own reporting. The big picture is that the auto industry spends billions and billions and billions of dollars each year on IT. And it has thousands of suppliers that spend billions and billions on IT, too.

Heck, I personally don't know that taxpayers should bail out the automakers, not having had the hours to study their claims. But those Washington politicos who are responsible for listening and studying the situation should put disgust, emotion, and partisan politics aside, and use their noggins to answer these questions: 1) What is the actual likelihood that GM and/or Chrysler will "fail" without aid, and what would this "failure" look like; 2) Is pointing them toward bankruptcy protection a reasonable alternative, and 3) If Congress awards aid, what sort of conditions could they attach to it so that any other in-trouble industry would view a similar aid request as a highly unpalatable, last-resort choice?

If GM or any other automaker really is on death's door, it's nothing to smirk or roll your eyes over, particularly if you work in the IT industry. You may be about to lose a highly lucrative customer or a potential new customer, whether that's GM or many of the suppliers that feed off of it.

(P.S. My judgment of whether it's right or wrong aside, big-company CEOs commonly use private planes. Steve Jobs reportedly expenses hundreds of thousands of dollars every quarter from operating his $43 million Turbo jet.)

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