The prospects of a slow-down in IT spending is expected
to overshadow many of the attendees atCebit
2008next week.
The IT industry's largest annual exhibition will reflect
concerns over a global recession that could put pressure on
suppliers to offer better deals.
According to finance analyst firm CLSA, a steady growth in IT
spending experienced for four straight years will flatten out
during 2008.
Forrester Analyst Andrew Parker said that IT managers had
entered a period of greater economic uncertainty. "That suggests
that in the first half of the year, at least, that we will see some
slowing down of sales cycles in enterprise markets for hardware or
software and some delayed or deferred purchasing decisions."
"SMEs and mid market companies are telling us that they want to
buy equipment now but cannot always get the upfront investment
costs signed off no matter how good the return on investment
figures are that they present to the board," said Ross White,
director of marketing at networking firm Avaya.
IT directors will be forced to decide what IT projects are
essential and may chose to fund projects that offer only quick
payback periods of six month or less over projects that payback
more than a year, said Angel Dobardziev, an Ovum analyst.
This could mean that IT projects involved with increasing
datacentre capacity are more likely to get the go ahead.
"The majority of IT enterprise investment is in the datacentre
and regardless of the economic situation, companies that run out of
capacity will need to expand their datacentres in order to continue
their operations," said Wendy Mars, director of systems engineers,
Cisco UK
According to analyst firm Gartner, IT organisations should not
wait for an official declaration that a recession has begun before
undertaking IT cost-cutting efforts
Last October Gartner published research recommending that IT
managers should prepare two IT budgets for 2008, the first
reflecting guidance already provided by senior decision-makers and
a second "backup" budget assuming the need to cut costs in response
to the arrival of a business slowdown, said Ken McGee,
vice-president and Gartner Fellow.
"Since that time the factors we based the research on have
worsened to a degree that convinces us it is now time for clients
to prepare for cutting IT costs."