Who started the supplier slump?

In the week that Fujitsu announced an impending cull of 16,400 jobs worldwide, it may sound naive to herald the end of the...

In the week that Fujitsu announced an impending cull of 16,400 jobs worldwide, it may sound naive to herald the end of the depression that has settled on the IT and telecoms supply sector of late.

Announcements like Fujitsu's have been commonplace in recent months, as the global downturn in sales of chips and other electronic components has begun to bite. A picture has emerged of an industry in tailspin.

Yet the latest six-monthly Computer Weekly/Kew Associates IT Expenditure Survey puts the lie to the myth that IT spend will be substantially hit in the UK this year and next.

A review of five years' figures, published in July, revealed that IT spending tracks GDP movements.

The latest survey, which canvassed opinion from more than 60,000 IT budget-holders in the UK, sets the rate of growth for corporate user spend on IT this year at 8.2%, and forecasts a rise in growth to 8.6% next year.

Moreover, it indicates that we can expect to see expenditure returning to the heights of the late 1990s, within two years. Such buoyant figures would have any other industry sector cracking open the Veuve Clicquot.

Given the disproportionate outlay that the millennium bug threat demanded, an ensuing dip in the rollercoaster of IT expenditure was inevitable. But, just as every hurtling dive at the funfair is followed by a ratcheted climb to the next peak, so the supply side can rest assured that there is a rise in spend around the corner.

Clearly, if the IT and telecoms supply industry is suffering a slump, it is not because of any profound falling away of user spend, but because it has talked itself into one, through its vaunting expectations.

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