For IT, war used to be simple. Other industries had to worry about secondary and tertiary effects, about proximity and supply chains and elasticity. Forecasts were muddled, and responses were best guesses with some makeup slapped on.
The IT sector could just use a rule of thumb: half of revenues were safe, the other half would be eaten away in a roughly geometric progression determined by the size of the war, its duration, and the effect on the cost of capital.
There were differences between subsectors, of course, but over time those shrunk as SaaS changed the nature of software revenue and hardware replacement cycles became more predictable.
Pretty much every enterprise had half their IT spend in what Gartner calls the “run” bucket, the keep-the-lights-on stuff, and considered the other half (the “grow” and “transform” side in consultant speak) to be discretionary.
AI has changed IT a lot but Donald Trump has upended the entire world order.
When the bombs started to fall, enterprise cuts started with marketing and media, then travel and consultants, then discretionary IT.
But not this time. Maybe. It depends.
Ever since Israel and America attacked Iran, we've been asking industry analysts what the impact on the IT sector will be, only to find that every analyst has suddenly transformed into an economist. Every answer boils down to “it depends”.
Will enterprises cut their budgets in the usual way?
It depends. If they think competitors will utterly transform their industry with AI, or that AI offers massive productivity improvements, or if they can source cheap money because investors are keen on AI transformation, then they may stick with transformational projects for as long as possible. In which case it comes down to how long the war lasts.
Will hardware sales dry up?
It depends. With chip shortages definitely getting worse before they get better – with or without an ongoing war – there's a big incentive to grab whatever hardware you can. Maybe even if you end up hoarding it in a warehouse somewhere because you postpone implementation on a growth project.
How will the war affect the cloud and SaaS sectors?
It depends. For some enterprises, the imperative for resilience and tactical speed grows as things get more chaotic. But that could mean moving on-prem for some and going hybrid or full cloud for others. The same goes for SaaS versus the alternatives, not least of all in organisations that think they can vibe code their way out of SaaS expenses.
Is South Africa's IT sector shielded or exposed?
It depends, on a range of factors so vast and varied and intertwined that there's really nowhere to start.
In fairness to the sector analysts, it's not just them, and they're not the worst hedgers in this war. AI has changed IT a lot but Donald Trump has upended the entire world order. Geopolitical analysts and economists and diplomats too can offer only a range of possibilities rather than solid predictions, with way too many caveats.
Trump could wake up one morning and decide the war is done and then… it depends, but recursively.
If America stops the bombing, does the Strait of Hormuz and air freight reopen so Qatar can ship helium to fabs in Taiwan and the United Arab Emirates can get NVIDIA chips? That depends on whether Iran mines the Strait using anything that can float and instructs its proxies elsewhere in the region to cripple whatever infrastructure they can reach. Which depends on who is in charge in Iran. Which depends on when Israel stops assassinating Iranian leaders. Which depends on the interplay between domestic politics in Israel and evolving Saudi Arabian policy. And so on and so forth.
There is one way to cut through all the complexity.
If anyone asks, whether it be in a budget meeting or around the dinner table, resist at all costs the urge to start talking about the capricious forces that are Donald Trump and AI sentiment.
Just shrug, and say: “This is the Middle East. It's complicated.”
And if pressed, maybe throw in an “it depends”. That's as good as anyone is doing right now.
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