Gartner chairman and CEO Michael Fleisher makes no bones about it -- the IT industry is struggling. "Fifty per cent of all tech brands will disappear over the next two years," he told delegates at Gartner's annual Symposium conference in Sydney yesterday.
It's a startling figure, but Fleisher believes the IT industry needs to face up to reality. "From my point of view, the return of the good economy is one of the silliest stories around," he said, adding that the idea of a jobless recovery was simply "insane".
"We may never return to the growth rates we experienced in the 90s," he said. "The IT industry must begin to accept 10 per cent growth as the industry norm, rather than the traditional 25 per cent or more that the market has experienced over the last decade."
Fleisher did admit that Australia and some other regional economies are enjoying growth, but he pointed out that pressures such as the drought would created ongoing problems for all business sectors.
He advised delegates to use the downturn as an opportunity to realign business strategies. "Don't wait for the US economy to recover as a cure. Focus on your highest-value customers, on cutting costs, and find the means to make small investments for future growth."
The current downturn has created a "buyers market" for IT, and Gartner is advising end users to take advantage of that. Over-capacity is giving organisations the opportunity to lock in new terms, but this situation would definitely disappear in the next 12 to 24 months, he said.
"Don't be hesitant to lock in long-term deals because of some impending innovation. In an industry that is consolidating, with over-capacity and in a buyers market, you sit in the power seat," he told delegates.
The next 12 month will remain tumultuous for IT vendors, he said.
"No killer app is going to appear in 2003 to stimulate demand. There is no prospect for a broad-based recovery in the tech sector as a whole in 2003."