Peter Sondergaard, head of European Research at Garter, said that 2003 is the last year users would be in a position to squeeze the supplier. “The smart user should look to create flexible contracts and licensing,” he told the Gartner Symposium in Florence.
Sondergaard advised users to start a dialogue with their suppliers now. While users are able to command the best deal from suppliers today, Sondergaard predicted that consolidation in the IT industry caused by the economic downturn will weaken users' bargaining position in 2004.
“Be prepared for a price increase or a forced upgrade,” Sondergaard warned users. He pointed to consolidation in the data centre market as one area that could have an impact on users.
Further hardware consolidation among suppliers, in areas such as PC manufacturing, network equipment and storage could also affect users.
He predicted further acquisitions in IT services, as the industry assesses the impact of the IBM/PwC merger. But the biggest exposure users faced, he warned, was in software. “We will see many large-scale acquisitions in the software market.”
Sondergaard highlighted sectors such as with mainframes, where there is no real competitor to IBM. Users faced real problems negotiating a contract with a supplier, when no competitor existed, he said.
One area where Sondergaard saw real opportunities for was in planning their PC renewal cycle.
PC technology is poised to improve dramatically in the next 18 months, with innovations in management tools and wireless capability, said Sondergaard. This means users would be better off waiting to upgrade.
“The next wave of PC is so much better that the average installed base,” Sondergaard added.