At a press conference in Hong Kong last week, Matt Boon, MVP and group team manager, global hardware markets, research firm Gartner, admitted that his own firm had to redo its 2009 prediction charts “in a hurry”.
The Gartner expert says that while developed markets like North America and Western Europe would be the “worst affected” due to economic gloom, “emerging regions will not be immune”.
According to Boon, “ongoing global economic problems in 2009 could reduce IT market growth from 5.8% to 2.3%” in 2009, although he admits this is a worst case scenario. He says that while discretionary IT spend (Boon specifically mentioned travel and events), including hardware replacement cycles would be cut or delayed, “essential IT spending will be preserved”.
“We see no cancellation in major infrastructures in the region yet,” says Boon. However, he notes that some Asia Pacific organisation are “taking their decision cycles up a notch”: from CIO-level to CFO- or CEO-level.
Boon says the second half of 2008 “has and will continue to see shifts in IT market perception, confidence, relevance and willingness to invest”. The bullishness which formerly characterised the market has firmly turned to caution amidst a re-focused effort around client retention and acquisition, he adds.
As far as strategy, Boon recommends a tactic firms are doubtless already implementing: “stop the bleeding first”. Companies should decide what needs to be spent (not what needs to be cut), modernise infrastructure with virtualisation and cloud computing concepts, and delete some applications.
Boon also suggests that firms question every project as if it was new, rank all projects that matter, and prepare a contingency budget with a 20% reduction.
The Gartner MVP says because of globalisation, vendors are better positioned now than they were six or seven years ago, as they’ve invested in emerging markets. He adds that while firms must be willing to change and change quickly, he ended on a positive note.
“This downturn will end, although we’ll see a slow bottom,” he says. “Keep a long-term strategic view, and remember: keep a level head.”