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Why are Tech Jobs Declining in a Recovery?

This question, posed and somewhat answered by Kevin Kelleher of GigaOm. In the article, Kevin suggests that with M&A (Mergers and Acquisition) activity up, among other things, some 17,000 jobs in the past month have been lost.

From an investment standpoint, founders and venture capitalists have good reasons to cash out now. Market caps of public tech giants are rising “” the Nasdaq gained 15 percent last quarter alone ““ and so are their cash stockpiles: Microsoft is sitting on $49 billion in cash; Google, $24 billion. The IPO market is coming back to life, but not enough to meet the pent-up demand. And high-profile deals like the ones we’ve seen recently have a way of spurring on other acquisitions.

The risk is that, just as the quality of IPOs tends to deteriorate the longer a market boom lasts, a wave of M&A deals will bring on marriages that make less and less sense.

Kevin would be correct. Major acquisitions have been announced in the past few months including Adobe’s purchase of Omniture at an estimated $1.8B valuation, eBay’s sale of Skype for $1.9B in cash as well as the mammoth acquisition of EDS by HP.

337/365: The Big Money

I think it’s more than M&A though. I don’t claim to be anything more than an armchair economist, but I think there’s some sense that this recession isn’t over yet, even if the key indicators (sans unemployment) are heading north. For one, I think there’s a sense that as long as key Fed interest rates are maintained at a 0% or near-0% level, companies can continue to cut staff and pocket more money. Less money going to interest means more revenue in a trickle-down sense. More revenue means more cash on hand. Slashing jobs provides cover for higher profits. Wall Street likes higher profits. Stock prices increase. Especially since Wall Street sees no end in sight for 0% lending rates.

Additionally, there continues to be a risk of a whiplash recession resulting from hyperinflation. With an influx of newly minted cash into the market thanks to bailouts and the Troubled Asset Relief Program (TARP) bill, the economy runs the risk of quickly reaching a point where over-inflation becomes a very real risk. In an over-inflated market, the cost of goods, services and products increases while the value of money inversely decreases creating a vicious cycle that feeds upon itself. A company with $10B in costs suddenly needs $15B or $20B for those same costs. Meanwhile, the value of a single dollar declines in a proportional way feeding the frenzy.

In my non-expert opinion, the companies laying more people off are both reading the writing as well as feeding the lion.

These companies see the potential danger ahead and as any good, economically conservative, risk-averse company is, they are choosing to mitigate their risks in a completely legitimate and sensical way – cut costs via layoffs and other cost saving measures.

The danger this approach takes is that by doing so, they are feeding the Wall Street monster that looks for the increasing profit margins with little end to 0% rates. These investors buy the stocks, increasing the net worth of the company while simultaneously encouraging a pattern of layoffs and non-hiring.

Though companies will need to hire again (because you can’t just take artificial profits forever), there is little incentive to do so now, especially with the risk of a whiplash recession.

It’s a difficult-to-end cycle.

Photo taken by David Muir

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The Gov 2.0 Camp LA Drama: Lessons for Community

Community events have become very common these days. Ever since the days of the first BarCamp – an unconference event that caters mainly to developers and techheads and is organized around attendees picking time slots to speak in on the day of the event – and transitioning to other similar style events,  like PodCamp, WordCamp, and now Gov 2.0 Camp, these events have become a catalyst for grassroots movement in the areas they focus in.

As a WordPress guy, my roots are with the WordCamp events that are held around the country. I just got back from WordCamp NYC 2 and we’ll be announcing details on WordCamp Mid-Atlantic 2010 around the new year. I’ve been to a ton of these kinds of events. I flew to Boston for PodCamp Boston 2, attended the inaugural PodCamp Philly a few years ago (still the best of its kind, in my opinion) and been involved with a variety of other events like it.

One thing I can say is that through a variety of events, in a variety of communities, with a variety of organizers… the same consistent lessons about community always shine through. If you have a motivated community that is supported by each other and encouraging each other to champion on and grow; if there is a sense of collaboration and alliance; then and only then, the greater community of artists, developers, innovators, business owners, entrepreneurs and enthusiasts can thrive.

To this end, I’m disappointed by the negative turn that has been aroused around the Gov 2.0 Camp LA.

Picture A Day September 13, 2009 - Heaven Community Rules

Mark Drapeau, referred to commonly as @cheeky_geeky, has been the target of many blog posts around the ether including on this blog. He comes out swinging hard at Gov 2.0 Camp LA for no apparent reason that is suitable or conducive to growing community:

My opinion can be briefly summarized as the following: I think it’s thrown together. I think it’s careless. I think it’s Mickey Mouse. I cannot figure out what the objective is beyond getting a bunch of hyped up people together in one place to drink kool-aid, despite seeming to promise the opposite. I see blanket statements and marketing slogans, but very little original thought. I see remarkably little tie-in with the mainstream conversation about what Government 2.0 means philosophically, experimentally, and practically. I don’t believe the word “policy” is even mentioned in the blog post above that describes the event – how can you describe a Gov 2.0 event and not mention policy? When what the conference stands for is dissected, it is difficult to determine how anything will be advanced by it, or how it will truly differ from numerous other mundane events sprouting up around this hot topic.

I understand Mark is passionate about Government 2.0. He wears that mantle very publicly and seems to, after a regression into a fairly normal existence in the greater community, rear his head again to slap down a localized community event suited for the LA government community, not DC.

A major problem here is that community is not built through attack. Through this entire article, he seems to be on the defensive in what can only be described as a territorial fear for the loss of stature. Or perhaps, it’s his affiliation with the O’Reilly Media folks who put on a competing event. Either way, Mark’s position in the Government 2.0 community is perceived to be threatened here. There can be no other explanation for the vitriol that goes into the intentional effort to relegate another Gov 2.0 community event into a vilified event. Is there a blacklist that future events can sign onto in advance?

Instead of attacking, which is apparently the modus operandi in this particular fight, let me offer some constructive criticism from my experience as a community event organizer. Mark, since this will undoubtedly appear in front of your face, let me go on record and say that you have publicly asked for people to respond to your comments and not ad hominem. I cannot do that because I can’t speak with any authority on your comments. I can speak with authority on community and community events, though, and that is what I will do.

  • Local events are local events. Unless there is a foundation or organization of some sort, as is the case with Social Media Club, that dictates formats and expectation, leave the local event to the local organizer.
  • The local organizers know their communities better than you ever will.
  • Local events are meant to be local. Not national. Not international. If you want national or international, throw a full conference, not an unconference.
  • Lead by example. If you want your event to be the model for other events, then make sure the public face on the event is approachable and well-liked. It’s not a popularity contest, but people shy away from polarizing people. Like me, trust me.
  • Yield the floor to any competing views or events. What’s good for the Gov 2 community somewhere is probably good elsewhere. It may not be what we need in DC, but maybe it’s exactly what is needed in LA.
  • Support other organizers. Don’t shoot allies. You may need them at some point.
  • The coworking communities of Independents Hall in Philly, New Work City in NY, Citizen Space in San Francisco and the Beehive in Baltimore all thrive because, as communities, they all recognize that they feed each other and are built in that way. What one person lacks, someone else brings to the table. Innovation and collaboration birthed out of working together.

Now that I have criticized (hopefully constructively) Mark’s reaction, it is only fair that I make some (hopefully constructive) observations about the Gov 2.0 Camp LA effort. First, they do seem to take the approach that G2CLA is the same event as G2CDC and that it is just “going on the road”. This is not the case. They are two different events. Fix this and remove any question. The LA event is the LA event. The DC event is the DC event.

Secondly, stop posturing against G2CDC. As mentioned above, the two events are connected in that they are both catering to government professionals and contractors as well as vendors and others looking to revolutionize the government interaction with citizens. This should not be toned in an us and them (LA vs DC) framework. LA should take what makes sense from DC and put their own spin on it. Leave what doesn’t make sense.

If I were the LA organizers, I’d keep the whole event tightly focused on state and local politics – specifically California and southern California. Additionally, with no offense intended toward whoever designed the official site, it needs work including schedule, sessions, etc. We will not go live with WordCamp Mid-Atlantic’s new site until we’re good and ready for it.

Community is only as good as the participants in it. Pissing on fire hydrants and shelling people based on personalities? Not so much.

Photo taken by Matt High

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WordPress and PHP 5: Be the Change You Want to See

The other day, I wrote the popular 10 Things You Need to Know About WordPress 2.9. As usual, most people are very excited about the new release which is now in beta and available for testing. In the article, I made a few fundamental errors which I have since corrected.

Notably, I mentioned that WordPress 3.0 would be going to PHP 5. This was based on conversations I had with a core developer which I now realized I misunderstood. Kinda. WordPress will probably not be dropping PHP 4 support in WordPress 3.0 but as core developer Mark Jaquith suggests:

Some things already require PHP 5, like time zone support or oEmbed. There are no plans that I know of to remove PHP 4 support in 3.0 “” last I checked we still had 12% of WP installs using PHP 4.

I see more of a natural and gradual deprecation of PHP 4. We’re very much open to making new features require PHP 5 if it would be a pain to make them PHP 4 compatible.

As a PHP developer, I am on board with calls for PHP 5 support. PHP 4 has been end of life (EOL) since August 8, 2008. That basically means that there will be no more releases, no more security patches, no more nothing. It’s done. Stick a fork in it. However, as Matt mentioned on stage at WordCamp NYC this weekend, there are still 12% of WordPress installations using PHP 4 hosting. He breaks that down as approximately 2M installs, the size of a major American city. More precisely, that’s approximately the size of Philadelphia.

This is not to defend WordPress development. I’d leave Philadelphia behind in a minute if I could get access to real object oriented PHP, reliable XML parsing, better HTTP transports and so much more. Yes, Philadelphia… I just threw you under the bus. That’s for signing Mike Vick. However, as Mark suggests, increasingly more features are being added to the core that require PHP 5.

oEmbed, which will ship in WordPress 2.9, requires XML or JSON parsing. XML parsing sucks in PHP 4. JSON ships by default in PHP 5.2. It is easier to backport JSON support to PHP 4 than try to engineer XML parsing for PHP 4. Some in the PHP community feel like backporting a PHP 5 feature to PHP 4 disincentivizes PHP 5 movement. It may, I’m not here to argue that.

Time Zone support is handled via the PHP class DateTimeZone, a PHP 5 class. Of course, on PHP 4 hosts, the user simply has to set the UTC offset (say, UTC-5 for Eastern Standard Time) manually. Graceful degradation.

I personally was one of the first people to write code for the SSH2 portion of the one click automatic upgrade feature. I, of course, did not go very far with it, but I was the one who first took a stab at creating that.

It is not worth it for PHP developers to throw mud at WordPress developers and the PHP 4 requirement if they are not willing to write code to make it better. Writing code does not, of course, mean that your feature will be incorporated. But this is an open source project. If you want to see new features, and the developers have indicated willingness through not only words, but also action, to include PHP 5 features, then you need to be the champion of those changes. In other words, you need to write the code, submit the ticket and state your case. Even if you can’t write the code, open a ticket and be a champion for the case.

Effective arguments, however, do not include holy wars over PHP 4 or PHP 5. Effective arguments do include security, usability, and feature requests that reflect “must have” features. Is it plugin territory or should it be a core feature? Why? State your case.

I will admit not being overly active in the ongoing development of WordPress. I have client work built around WordPress, so that takes up most of my time. Understanding that, I also have no room to throw mud unless I’m willing to step up and write code too. It’s sort of like voting. If I don’t bother to go vote, then I can’t complain about my elected officials.

If you want to see change in WordPress, be that change and put your words into action.