Will the crunch crush the IT sector?

08-10-2008

by Ralph Averbuch

It’s probably a sure bet that the recent tumult in the global financial markets is going to do nothing to help IT sales. Large businesses typically upgrade hardware and software on a rolling schedule. However, with severe doubts about future economic returns in a depressed marketplace, the pressure is going to fall on IT directors to deliver cost cuts. Inevitably that’s going to result in delayed upgrades and replacements as IT departments seek to keep operating costs down in increasingly uncertain times. That’s likely to mean that PC sales, which already operate on very narrow profits per unit sold, will be further depressed. This will be cold comfort to Microsoft, struggling to convince an already reluctant business sector to ditch Windows XP for Vista. The reality is that we are on the cusp of what could become a massive downturn in economic activity and that will affect businesses, large and small, across the ICT sector, at least as much as any other business area.