Slow adoption of new tech

Read time 2min 20sec

Cloud computing, green IT and the telecommunications sectors all stand to benefit from the global economic crisis, says a recent report by research firm IDC.

According to the report, the global recession will be a major factor behind every trend and development in the IT and telecommunications markets in 2009, and financial pressures felt by IT vendors and their customers will accelerate the transformation of the industry.

The report states these sectors will attract IT companies as they offer practical benefits.

“Cloud computing will accelerate as budget pressures drive users to the cloud's low costs; green IT will have a good year, benefiting from its ability to deliver near-term cost savings; the slowdown in spending will impact the telecommunications industry as well, cutting revenues in half, leading to global consolidation among the leading players, and sparking an aggressive expansion into cloud services.”

Clinton Jacobs, analyst at BMI-TechKnowlege, notes that, while these are not new technologies, they are key in 2009. “The global recession will affect the decision-making and adoption of these new trends in the short-term. But necessity is the mother of invention and the trends should reflect that in 2009.”

Jacobs notes companies will consider all their options in the face of the economic slowdown, saying: “Every means necessary should be evaluated to ensure survival in the current economic situation, including new technologies and business models. New technologies and business models that demonstrate short-term cost savings or increase revenues will stand out.”

Weather the storm

The various technology sectors should not have high expectations, says IDC analyst Richard Hurst, adding that companies should focus on how they will weather the impending storm, rather than whether 2009 will be a good year.

“The telecoms sector will weather the storm slightly better than other sectors, while the PC and server market will experience softer growth,” he says. “We will see a lot more mergers and acquisitions as companies band together.”

Both Hurst and Jacobs note that new technologies might not be a big feature in 2009. “New technologies and solutions often provide improved efficiencies, but the payback period will have to be short and the benefit significant,” explains Jacobs.

Hurst notes that companies will look to maximise their existing resources, rather than investing in new solutions. “We will see people doing more with what they have available. I also think that there will be a proportional rise in bandwidth demand as people start communicating remotely - such as video conferencing - and using the Internet more widely.”

Related stories:
Telecoms to survive economic downturn
SA to withstand global IT decline

See also