IT economy goes further off the rails
It was a grim week: Intel cut its sales forecast, Sun announced big layoffs, and IDC lowered its IT spending projections for next year.
Computerworld - The drumbeat of economic bad news grew louder in the IT industry last week, as Intel Corp. reduced its fourth-quarter revenue forecast by as much as 20% and Sun Microsystems Inc. announced plans to lay off up to 18% of its workforce.
Even India is feeling the economic wallop: The country's largest technology trade group sharply cut its IT services hiring projections.
Meanwhile, market research firm IDC lowered its IT spending forecast for 2009, saying it now expects worldwide spending to grow by just 2.6% over this year's level — less than half its earlier 5.9% prediction. IDC now expects IT spending in the U.S. to grow a minuscule 0.9% next year.
The more pessimistic forecasts were reinforced by survey results released last week by technology reseller CDW Corp. CDW, which commissions a bimonthly survey of IT decision-makers by an outside polling firm, said that in the latest survey, managing operational costs was the most-cited priority for next year.
Forty-one percent of the 1,058 respondents included cost management among their priorities. In comparison, 35% cited increasing their companies' market share and improving customer satisfaction, while 33% said that making technology improvements was a priority. The survey was conducted from Sept. 15 to 22, a time when the economic situation was just starting to go from bad to worse.
Prior to the Society for Information Management's annual member conference last week, Jerry Luftman, a professor at Stevens Institute of Technology and vice president of academic affairs at SIM, said that IT executives have been more proactive about reining in spending than they were during the dot-com bust and post-9/11 downturn.
That's reflected in the results of an online survey SIM conducted in June that had more than 300 respondents from 231 organizations. Among the findings: Respondents said they expected the average percentage of their IT budgets devoted to offshore work to increase from 3.3% this year to 5.6% in 2009.
However, only 15% of the respondents said they expected to reduce their IT head counts next year. Although the survey was conducted before the downturn accelerated, Luftman said he doesn't anticipate a big increase in the number of job cuts.
On the other hand, adding workers may not be in the cards either. For example, The Dannon Co. is looking to "retool" some IT staffers with new skills in areas such as sales or research and development in order to avoid head count increases, CIO E. Jeffrey Hutchinson said.
"What we need are not the technical skills — I can outsource those to other countries around the world," Hutchinson said. "We need the individual who has the breadth and depth of expertise [and] can be perceived by the functional or process areas as a value-add."
- Silicon Valley's 19 Coolest Places to Work
- Is Windows 8 Development Worth the Trouble?
- 8 Books Every IT Leader Should Read This Year
- 10 Hot Hadoop Startups to Watch
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- CIOs Deliver Productivity Breakthroughs with Intelligent Digital Signage Retailers have long recognized the influence that digital signage provides over a shopper's point-of-purchase decision making process.
- ERP in the Cloud and the Modern Business View IDC's White Paper, to review IDC CloudTrack Survey findings, gain expert insight into the challenges and opportunities the cloud presents, and determine...
- Oracle ERP Cloud Service - Back-Office Solutions that Keep You in Front Learn how you can harness the power of the cloud to run your business more effectively and lower upfront costs.
- Integration with Oracle Fusion Financials Cloud Service While moving your financial system to the cloud may seem straightforward, truly realizing the advantages of the cloud requires a complete understanding how...
- Top 4 Digital Signage Fails Join RMG Networks for a look at four of the most common reasons digital signage fails in corporate businesses. Learn about strategies to...
Transforming Finance, Procurement and Supply Chain Effectiveness with Cross-Functional Analytics
Date: May 6th, 2014
Time: 1 PM EDT
Attend this Webcast to find out how Oracle's packaged analytic applications enable line-of-business managers to examine all...
All Applications White Papers |