Every year since 1965, IDC has held its annual industry business briefing, 'Directions', with this year's event being held in Boston last week.
The following is a snapshot of some of the key messages that emerged from this conference:
* Worldwide IT spending is likely to drop to about 0.5% this year, although growth in many of the emerging markets remaining at a much higher level. South Africa was cited as one of these, with an expected growth of 5% to 6%. Thus, there was a warning given that vendors should not starve these territories of the resources necessary to close business, as these countries will become even more important in future years, as growth rates return to and exceed levels of the last few years, while the developed world growth rate will remain lower for much longer. SA was seen as one of the countries with a growth rate of 8% to9% by 20011.
Companies should start planning for the 'recovery' situation now and not when it starts to appear, as that will be too late to sustain their competitive advantage.
Paul Booth, MD, Global Research Partners
* Historically, worldwide IT spending has not been linked to GDP, and therefore, assumptions should not be based on these numbers this time around.
* Hardware will take the largest knock in the next few months, as PC, server and networking upgrades are delayed.
* Technology will be an agent for change during the economic crisis as organisations evaluate the newer technologies that could save costs both now and into the future, eg, virtualisation.
* From worldwide surveys recently undertaken, almost 50% of companies are concerned with the long-term viability of their vendors or possible future vendors.
* Companies should start planning for the 'recovery' situation now and not when it starts to appear, as that will be too late to sustain their competitive advantage. This is particularly true for marketing spend that should be 'upped' in these 'down' times, so visibility is maintained in the marketplace.
* Many innovations were conceived of historically in crisis times; examples include some of the capabilities from companies such as HP, IBM and Sun Microsystems.
* The IT industry is at a watershed. The bandwidth explosion is the key to turning the IT industry into a utility such as water, gas and electricity. With such a model, the potential cost savings are immense and could eliminate much of the current spend that goes into the maintenance of existing systems. New technologies such as cloud computing also play a heavy role in this new scenario. It's a great shame that we don't even have true broadband available in this country for the majority of companies and people to exploit (broadband is measured in the 100s of MB/sec and not the ADSL speeds with which we are familiar).
In addition, the ICT industry will see much consolidation take place during these recessionary times. The potential IBM/Sun Microsystems is one such deal, which will make the 'bigger boys' much stronger. In addition, there is still funding available for smaller acquisitions and for new initiatives and start-up companies, if the plans are created and presented correctly, although venture capital investments in larger deals will become less commonplace.
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