Experts on What Comes Next

By Chris Preimesberger  |  Posted 2008-10-29 Print this article Print

Deloitte: Use this 'down' time wisely
Nonetheless, there are some industry watchers who don't mind going on the record about such an uncertain topic

"I don't know if anybody really knows how long this might take or how bad it might be," Deloitte IT analyst Mark Jensen, head of the firm's VC services group, told eWEEK. "First of all, we need to get the credit markets going again. It's going to take a while to get the confidence back.

"Every client and situation is unique, but overall, we haven't seen [IT] companies with ongoing projects just pull the plug because the economy's in a downturn," Jensen said. "So long-term IT projects are still ongoing.

"In terms of new projects, clients are very interested in the ROI [return on investment]. They want to see the cost benefit; they want the business case built. They're going to be a little more cautious about things that need to be done right now."

If the economic slowdown becomes protracted, and business gets abnormally slow, this could be a good time for companies to do maintenance on systems that, in a normal busy time, they normally wouldn't have time to do, Jensen said.

"It could be a good time to redirect resources to things they know need to be fixed and may have been living with, just because they had other things for people to do," Jensen said.

Forrester sees deep and long recession

In a report issued two weeks ago, Forrester Research outlined to its technology vendor clients an IT spending scenario for a long and deep recession.

A prolonged recession would mean "several quarters of declines in [IT] purchases, not just two or three quarters, with little or no growth in late 2008 and first half 2009," wrote Forrester analyst Andrew Bartels.

Forrester said that this is the first time it has outlined the possibility that the economic crisis could spark a short-term contraction in IT spending, as opposed to a slowdown in growth. On a full-year [2009] basis, a sustained recession could lead to annual U.S. IT spending growth of only 2 percent to 3 percent and global IT spending growth of 3 percent to 4 percent.

Last month, Forrester revised its U.S. IT spending forecast to 5.4 percent growth in full-year 2008 and 6.1 percent in full year 2009, and global IT spending growth in 2009 of 7 to 8 percent.

"We are still sticking to our forecast of a sharp downturn in growth for U.S. tech purchases with no downturn," Bartels wrote. "Why? Our tech market forecast already presumes the recession that is actually happening. Still, with the financial crisis now spreading around the world, risks have grown that the U.S. and other major countries will experience a longer and deeper recession that we had expected."

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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