Industry shows signs of constraint

Industry shows signs of constraint

Industry analysts are reporting global IT spending remains consistent despite the economic downturn in the US. However, several local channel figures have seen signs that customers are tightening their belts.

According to a new Gartner study released last week, IT spending remains largely unaffected by ongoing reports of economic weakness in the US and other major economies. On a global basis, the projected IT budget growth rate for 2008 is 3.3 per cent, unchanged from a previous Gartner survey.

While US budget growth has slowed, Europe and Asia-Pacific have remained steady, according to Gartner. The study was based on responses from more than 1000 CIOs in February and March. "We believe enterprises and CIOs are being cautious about IT spending, but not wholesale cutting," group vice-president and head of research for Gartner Executive Programs, Mark McDonald, said. "IT budgets have been modest for the past four or five years, and that modesty is paying off, because they're not as rich for targeting.

"The contingency analysis seems to indicate that while CIOs are prepared to weather tougher economic times, the majority don't think they'll have to."

Local integrators, however, are divided about whether economic conditions will impact customer spending intentions. One integrator, who asked not to be named, reported a significant slowdown in the last quarter. While this had been offset by its ability to pick up substantial Commander business, the integrator claimed anyone who hadn't been so lucky would be doing it tough.

Another HP business partner said the vendor had flagged in a briefing that its sales figures for March fell well short of forecasts. While HP staff attributed the slowdown to customer hesitation in transitioning from Commander to another reseller, the partner suggested this could also indicate market jitters. Anecdotal evidence from other major vendor sales reps suggests they are also struggling to account for the redistribution of Commander's hardware procurement business.

Managing director of Melbourne-based integrator Southern Cross Computer Systems (SCCS), Mark Kalmus, hadn't witnessed any significant slowdown in IT spending. However, he predicted it would hit in the next 3-6 months.

"There's some hesitation and nervousness but people in infrastructure, utilities, resources and even manufacturing aren't showing any signs of slowdown yet," he said. "This is also a strong time of year for government spending. I think those in the banking and financial services sectors will see it earlier than others.

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