Channel Marker

Oct 31 2008   10:28AM GMT

Will the year end with a bang or a whimper?

Heather Clancy Heather Clancy Profile: Heather Clancy

The big whack that consumer confidence took over the last couple of months (as measured by the Conference Board) continues to be echoed in the IT buyer community, according to the latest stats from the ongoing, bimonthly CDW IT Monitor. Now, though, the anemia is spreading out of the commercial buying minds and into the government sector.

The monitor includes two components: The IT Value Monitor, which looks at the value that IT organizations place on technology, and the IT Growth Monitor, which measures future expectations for technology. In September, the overall readings for all three government areas (local, state and federal) slipped by four points to 70 (the lowest point since the CDW data collection started last year. The overall Monitor rating across all sectors declined by one point to stand at 72.

It shouldn’t surprise you to hear that more companies in the September survey said they expect their IT budgets to decrease: about 11 percent will make cuts, up from 8 percent. Although, honestly, the number of companies that think their IT budgets to grow is still way bigger than that and stands at 51 percent, up one point from the previously.

Back in August, when prepping for a panel about the economic climate, I asked a number of smaller VARs about their sales situations. Pretty much all of them were positive about their growth for the year. Even as recently as two weeks ago, when I was reporting a story for about cloud computing, the resellers that I spoke with were still on a roll, at least through the month of September.

It’s hard to stay positive when your retirement fund is worth two-thirds of what it used to be, but I actually feel pretty good about the role of the channel in the recession we’re feeling. I can say with authority that all the high-tech vendors you’re dealing with are hacking away at their budgets, but that means they’re going to be more accommodating than usual when it comes to supporting your sales demand-generation activities. You’ve just got to demonstrate the return on investment more explicitly.

The good news is that if you have a strong value proposition that demonstrates your technology solution’s ability to improve corporate efficiency or to invigorate some sales-generating process, you’re going to get the attention not just of your customer prospects but of your vendor partners. If you’re looking for short-term ways to juice up your year-end, I encourage you to pitch the accelerated capital equipment or write-off benefits that were written into the 2008 Economic Stimulus Act as a way of closing technology sales before the end of this year. You can explore the details at this link, but the bottom line is that your customers can save a little money by investing in technology and getting it into service in the next two months.

The one thing I worry about a bit is the high-tech industry’s cyclical history of big fourth quarters. (I’m talking calendar.) With all the business budget-cutting going on across the United States, I doubt we’re going to see the flood of last-minute P.O.’s many of you have come to expect. Then again, many of you have built managed services plans and recurring revenue expectations into your business models, so you may already know what to expect and can plan now for the first quarter of 2009.

In either way, I’m curious as to whether you think the year will end with a bang or a whimper? You can comment on this story for the community or e-mail me privately at hclancy@swotmg.com to start a dialogue.

Heather Clancy is a business journalist and strategic communications consultant with SWOT Management Group. She can be reached at hclancy@swotmg.com.

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