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Credit crunch effects to hit IT sector in 2009

Discussion in 'News' started by wagnerk, Aug 13, 2008.

  1. wagnerk
    Highly Decorated Member Award

    wagnerk aka kitkatninja Moderator


    Credit crunch effects to hit IT sector in 2009

    Technology companies face being hit by the "credit crunch" and a downturn in business in 2009, according to a prediction by leading analyst Richard Holway.

    The technology industry analyst, a former director of Ovum, the IT research analysis and consulting company, forecast that the sector's resilience so far to the effects of the global squeeze on finance will not last.

    In an interview with Computer Weekly, he predicted that revenue across the IT sector will decline in 2009, a recession for the industry of up to 2%.

    Technology companies dependent on discretionary spending, especially on consumers buying new products, will be "badly hit", he said. "Their outlook is looking much less healthy than they were a year ago, even six months ago."

    Read the whole story here from ComputerWeekly

    But to be honest, how is this different from any other sector? Plus remember this is only a prediction from leading analyst Richard Holway.

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    1. neutralhills
      If you've been following Calculated Risk you'll see that the credit crunch is already here.
    2. BosonMichael
      Sure, technology companies dependent on discretionary spending will be hit... but IT encompasses far, far more than just technology companies with product to sell. Every business uses techs to some degree: either they're employed by the company, or they're contracted in on an as-needed basis. Either way, techs are still going to be required to do business.

      In my opinion, a 2% recession in the IT industry might not be such a horrible thing. I dare say that everyone here who knows 100 techs can certainly think of 2 who really ought not be in IT.

      Just be sure you're in the other 98%. 8)
    3. wagnerk
      lol, I'll make sure I'm in the other 98% :biggrin

    4. sunn
      First off I'm thinking 2% recession is too low - I suspect a bit worse. :(
      I agree IT encompasses far more than just tech companies; but enterprises have already started the belt tightening. So the adage "if it ain't broken don't fix it" (especially if we're making a profit) will start to take hold. It cannot apply to everything, but it can to many upgrade scenarios.

      As for not being in the 2% pool ... :ohmy
    5. BosonMichael
      Those companies who let go of IT staff indiscriminately because "things aren't broke" will quickly figure out the hard way what happens when you don't support your IT infrastructure.
    6. dales
      agree they might find out they actually had a good team which were herocially holding their infrastructure together with sellotape and chewing gum because everyone was ignoring IT's request for a decent budget!:rolleyes:
    7. sunn
      This is true, however...
      In some cases (depending on executive make-up) the easiest group to cut resources to is the one that nobody really understands the importance of and/or feels like a financial burden.

      To make IT more involved in the business decisions at an exec level, there needs to be an IT exec voice (CIO; CTO; etc...).
      Bit off topic here...
    8. issfred
      That's why it is important to be certified,it validates your skills. When it comes to lay offs and you are certified and your associate isn't......
    9. BosonMichael
      Yep... and then have to hire someone on short notice who might cost more and might not be the best fit for the team/company... or worse, pay a IT consulting company by the hour for additional techs (which is often what happens).
    10. BosonMichael
      It'll LOOK easy to cut resources there... but what I'm saying is... just because they don't understand it or just because things don't look broken doesn't mean everything will continue to work when you let go of IT staff. Thus... they'll learn the hard way.

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