Financial Crisis Is Delaying, More Than Cancelling, Client Computing Projects

Financial Crisis Is Delaying, More Than Cancelling, Client Computing Projects
by: Jerry Liao

The economic slowdown has changed a lot of things in the corporate world. Job cuts are everywhere, and this is brought about by low revenue. Most companies are resorting to quick fixes, to lower down their operating expense, and relieving their intellectual assets is the fastest way to achieve this. A wrong solution if you ask me.

The question now is why are clients not buying? Is it because they don’t have the money? Don’t they have a requirement? Or are they just holding back? For us to arrive to a right solution, we need to have the right understanding of the question and/or situation.

A recent survey by Gartner Inc. indicated that PC projects are postponed or scaled back this 2009 rather than cancelled outright because of tighter IT budgets. Only 12 percent of those surveyed indicated they have outright cancelled a planned project since October 2008.

The survey was conducted from late February through early March of 2009. Respondents included 475 IT decision makers in enterprises with 1,000 or more employees (except in Australia, where companies with as few as 500 workers were contacted). Respondents were from nine countries, including Australia, Brazil, China, France, Germany, India, Russia, the United Kingdom and the United States.

Gartner forecasts overall IT spending to decline 3.7 percent in 2009. Spending on IT hardware, including client computing (PCs), servers, storage and printing systems will bear the brunt of budget cuts with spending expected to decline 14.9 percent. Gartner forecasts overall IT spending to rebound with 2.4 percent growth in 2010, although IT hardware spending will continue to lag next year, growing just 0.8 percent.

The survey pinpointed some important differences in how companies in different countries are maintaining, delaying, reducing or canceling many ongoing client computing projects. Although 48 percent of all respondents indicated some of their PC projects would be deployed as planned in 2009, respondents in China (85 percent) and India (64 percent) were more optimistic and expected most of their projects to be deployed as planned. In contrast, only 29 percent of U.S. and 18 percent of French companies planned to continue their client computing projects as originally planned.

Significant vertical market variations were also revealed by the survey which found that the industries most on track with their client computing plans were insurance, media and consumer business services. Companies involved with telecommunications, wholesale, and agriculture, mining and construction are most likely to be planning to reduce spending. Postponements are more likely in retail, utilities and wholesale companies, and project cancellations were above average in discrete manufacturing. Only one out of 45 respondents in the financial services industry indicated PC purchase plans were cancelled, and in this sector, reduced, postponed, and as-planned responses came in near the averages.

The challenge for companies now is to stay afloat and stay competitive. Because once these clients started to buy again, these clients will look for providers who can work with them during the best and worst time of the economy. Confidence is key.

God Bless us all!

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