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Is the end-of-year rush confined to history?

Is the end-of-year rush confined to history?

Strong sales in December and a maturing approach to IT spending has some in the local integration market suggesting the days of lumpy spending could be over. While the end of a quarter or financial year has traditionally led to spending frenzy, The Missing Link's Jason Arnold-Auland said orders had been 'out of control' during the usually slow months of December and January. He was backed up by Technical Architecture Solutions director, Tony Wilkinson, who said the virtualization services provider did two of its biggest ever sales over the Christmas period - one on Christmas Eve.

"I had to go and buy a Telstra 3G card to approve the order because Vodafone didn't have coverage where I was staying. It's the first year we could have had the entire company working through [the Christmas holiday] without any break," he said.

Leading Solutions national sales manager, Roy Pater, has also noticed a shift away from last-minute IT spending towards more even distribution of IT projects. He suggested the changes to buying cycles reflected a maturing industry.

"I've done a three-year analysis and the traditional peaks and troughs were pretty fl at in the last year," he said. "Nobody runs out and spends their IT budget in the first two months or gets to the end of the financial year and spends like mad. Compliance has taken care of that, the market is good and the vendors have woken up to themselves." Southern Cross Computer Systems managing director, Mark Kalmus, agreed corporate spending over the last 2-3 years had become more evenly spread over the course of a year.

"In the old days, banks would request 1000 PCs and take delivery of 20-50 each month. Now they're only buying what they need to," he said. "Governance and policy around projects is taking care of that and it means they spend when they're ready. So we're not seeing the same end-of-year push."

Data#3 managing director, John Grant, argued its customers still skewed towards more spending in the second half of the financial year. He claimed the trend was not driven by customers, but by vendors being aggressive to meet their own financial objectives.

Most integrators agreed that corporates are getting savvier about how they spend their dollars. They're also more aware of the impact and benefits of IT.

"Sales cycles are shorter and we're not seeing such big, lumpy projects," UXC Business Solutions CEO, Cris Nicolli, said. "One of our business units added 50 clients in the November/December period, which I think shows this trend. There's also more staggered purchasing." Touchbase Australian leader, Andrew Fisher, said a big customer driver in the contact centre space was reducing operational expenditure.

"There's much more focus on this than a year or two ago," he said. The increasingly complicated nature of IT delivery was also impacting how people considered investments, SCCSs' Kalmus said.

"There's so many other things customers have to consider - people, software applications, how you implement the infrastructure - and they have to get those things lined up," he said. "A lot of project management work also means that the bigger the organisation, the more they have to get ticks in the boxes when they're about to do things because it effects other parts of the business."

For Express Data managing director, Ross Cochrane, the robust Australian environment and recognition of technology as an important business driver had opened up great opportunities.

"I'd ask people to qualify the spending patterns though - I think what many integrators are experiencing is a market share shift," he said. He pointed to Commander's exit from the hardware reseller business as a case in point. But while things are looking up now, integrators admitted unsettled global economic conditions could impact business down the line. Data#3's Grant suggested pressure on IT budgets had been coming for some time, both in the government and commercial sectors.

"I think the fundamentals in the corporate market are still strong and I don't think it will ultimately affect IT investment," SCCSs' Kalmus said. "But if this uncertainty goes on much longer it will impact retail and consumer spending."


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