Channel Marker

Nov 25 2008   9:35PM GMT

Looking for a silver lining in IT spending predictions



Posted by: Heather Clancy
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Heather Clancy
Information technology services
IT buyer market research

Just wanted to officially add my name to the list of journalists and industry analysts seeking positive news, especially when it comes to economic growth. Tell me good things, I want to hear them! But I am obliged to update readers on two pieces of data that I came across in the past week that should be considered as you’re adjusting your plans for next year.

The first, from IDC, is an updated IT spending statistic. The market research firm has revised its worldwide IT spending forecast downward to about 2.9 percent from the original 5.9 forecast that it made before everything went totally whacky in September and October. The specific forecast for the U.S. market is 0.9 percent, off from the 4.2 percent rate that IDC anticipated as recently as August.

What good is to be found in these icky numbers?

Well, for one thing, they are STILL in the positive zone. I truly believe while it’s going to be hell-ish for EVERYONE next year that counts on hardware sales (even storage, apparently), the best opportunities will lie in software and services, which is where most of my friends from the high-tech channel have been SAYING they’re trying to shift their business anyway. So, maybe this will accelerate that shift? This industry always seems to respond best under pressure. I have confidence that the folks I know in from the channel community are way better equipped from a business management standpoint to weather this than they were just three years ago.

By 2012, growth should have recovered to about 6 percent annually, the research firm predicts.

The IDC report echoes a survey of high-tech vendor executives that was taken last week at the CDW partner summit. Approximately 60 percent of the roughly 275 IT industry leaders polled by CDW last week anticipate flat or moderate spending growth during the next 12 months.

There are certain areas that could lead the way to higher growth, according to the poll. The executives were most positive about several specific technology and solutions: virtualization, security, wireless, business continuity and unified communications. These executives were also still positive about the potential for storage, but the IDC economists weren’t so sure, as I already mentioned.

As far as verticals go, healthcare and energy industry IT projects could lead the way, according to the folks polled by CDW. Stay away from retail and financial services, they say.
What you need to watch out for as a VAR, though: Escalating raw materials costs, which will squeeze margins; and corporate reorganizations that could mess with the relationship you have with vendor field sales and channel account managers.

So, you’ve got roughly a month to make the most out of this year and batten down for 2009 and beyond. I don’t know about you, but I always feel like this sort of environment brings out the best of the best, and I’m eager to write about those scenarios.

I sincerely wish you and yours a very Happy Thanksgiving.

Heather Clancy is a business journalist and strategic communications advisor with high-tech channel consulting company, SWOT Management Group. If you want to join the good-news-seeking cause, e-mail me at hclancy@swotmg.com. I’ll be back next week ready to stare down 2009. You with me?

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