Sun Microsystems predicts limited slump

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Sun Microsystems predicts limited slump

Corporate IT spending in Europe is likely to take a downward turn over the coming months, according to Ed Zander, president and chief operating officer at Sun Microsystems.

However the fall will probably be less precipitous than that which hit the US in the early months of this year, Zander told Computer Weekly last week.

And bucking the current trend among suppliers of cutting IT staff Zander ruled out any redundancies at Sun in the short term.

With UK companies braced for an economic downturn Zander said that shrinking IT budgets would put a squeeze on the price of computer equipment. "As there are fewer deals, people will be competing more. But there is more to selling than just having the lowest price," he said.

Zander reflected the shock among senior managers in most of the world's big technology suppliers that the fall in IT spending had been so sudden and deep in the US.

"Chief technology officers just froze corporate spending because they felt an economic downturn coming," he explained.

That freeze has already led to tens of thousands of job cuts, some in the UK. But Zander said the company preferred to cut contractors and discretionary spending - "you'd be surprised what goes into postage," he said.

While Zander could put no time frame on when IT spending might resume the strong upward trend that has prevailed in recent years, he added that he was certain that it would pick up, as most companies could still realise benefits from technology in improved processes, and shorter product cycles and time to market.

Fiona Harvey

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