Channel Marker

Dec 26 2008   4:11PM GMT

Who, exactly, is feeling the IT spending slowdown?

Heather Clancy Heather Clancy Profile: Heather Clancy

Either every solution provider I know is brilliant or lying, or every IT decision maker is fudging their answers when they take IT spending polls. That’s because even though all the data suggests that companies aren’t buying tech or won’t buy tech or are too scared to buy tech, at least some of the solution providers I speak with anecdotally tell me they had a bang-up fourth quarter.

According to the latest CDW IT Monitor, confidence among IT decision makers dropped to its lowest level of the year in December. The overall IT monitor index score was 70, down two points, while confidence among large corporate and government accounts was off five points to 74.

On the very positive side, however, 84 percent of large and 77 percent of midsize businesses still expect to spend on new hardware sometime in the next six months and their buying intentions on the software side are even slightly higher. The challenge is that at least 20 percent of the CDW survey respondents, who are polled on a bimonthly basis, said they anticipate cuts to their budgets. So, it will be up to IT solution providers to create budgets by either saving money elsewhere or appealing outside the IT department for investments. Applications delivered as a service, for example, might be something that a business unit leader could sanction separately.

Another positive indicator, although I hate describing it as such because is means people are losing their jobs, is that businesses of all sizes intend to reduce their IT staffing levels. Approximately 16 percent of larger companies responding to the December poll said they will cut positions in the next six months; this compares with only 7 percent of companies that said the same thing in October. But it sure suggests that an IT services firm might have the opportunity to pick up the slack.

This jibes with the comments of several solution providers that I’ve spoken with over the past week, who hailed from Indiana, Florida and New Jersey. My contact in Florida said his team needs to fight for every bit of business right now, although it IS still coming in, while the solution providers from Indiana and New Jersey both are booked at least a quarter into the new year.
Who knows: maybe their customers were just spending the rest of their 2008 tech budgets before settling in for a long winter’s nap. One real danger I see is the credit environment, which could keep some VARs from transacting legitimate sales, but the creative will find ways to work around this. Anyway, I think that the spending paralysis that we keep hearing about may be a figment of at least some people’s imaginations. At least, here’s hoping.

Heather Clancy is a journalist and blogger about high-tech channel issues, as well as a strategic communications consultant for SWOT Management Group. Tell her your story or suggest blog topics by e-mailing hclancy@swotmg.com.

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