André Gold, former head of IT security at financial services firm ING, explains that "the startup market has changed over the last five years, so it's not as sexy or profitable as it once was for new companies to come to market, IPO, and make wealthy or wealthier the VCs and entrepreneurs who seeded and founded the company."
That said, though, Gold contends that the model is not broken and remains valuable to IT shops. "I have gone to small-cap companies and startups for superior [intellectual property] at a reduced rate," Gold explains. "If the company has good [intellectual property], I have no shame in putting my checkbook behind that because they're likely to be acquired, and by a vendor I already have a relationship with."
Just don't expect IT budgets to spring back quickly. Gartner's Raskino expects this turbulence to continue through next year. "There's no chance that it will all be sorted out by Christmas and all will be well on January 1," he says.
Tabb Group's Iati looks out even further: "We're in for a period where it will probably take five years to reach the tech spend we had in 2007."