Time has come for IT to heal and prosper

The IT industry’s bruises from fighting the downturn in 2009 are still pretty raw, but as the year approaches its end many will be applying the ointment with a bit more of a smile.

The mood of cautious optimism among IT directors was confirmed by Accenture research showing UK and Ireland businesses as the most likely in Europe to increase spending next year.

Not only that, but two of the top three items on their wish list were e-business and CRM systems, both technologies focused on growth, rather than retrenchment and cost cutting, which have been the watchwords of late.

But not all those economic bruises will heal so quickly. There is still a significant split in buyer attitudes between capital expenditure (capex) and operational expenditure (opex) spending.

Opex – covering areas such as subscriptions, software-as-a-service or outsourcing – have been the least hard-hit by the recession.

Capex – servers, PCs, big up-front software licences – have really suffered. The server and business desktop markets slumped more than 20% year-on-year at one stage – that’s a decline of the scale that led the US government to spend billions of dollars bailing out the car industry.

Most capex items in IT are purchased through finance deals such as operating leases, turning them into opex for accounting purposes, but the technology leasing sector has been just as hard-hit, with access to funding severely restricted.

And with major cutbacks in the public sector looming after the general election next year, any suppliers relying on government IT will still be wary of a further beating.

All these factors combined start to create ideal conditions for IT managers. Your suppliers need you more than ever, but they know buyers will still be cautious. It is going to be a great time to negotiate a good deal – technology decision-makers should enjoy having the upper hand while it lasts.

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