Spending slowdown unlikely to squelch IT vendor plans

Analysts and users say they're optimistic that the major server vendors will stick to their product schedules this year, despite a predicted slowdown in corporate IT spending.

          Analysts and users say they’re optimistic that the major server vendors will stick to their product schedules this year, despite a predicted slowdown in corporate IT spending.

          Major enterprise hardware vendors such as Sun Microsystems, Hewlett-Packard and IBM have either just started shipping or are slated to ship major upgrades to their technologies this year.

          Though some of these vendors have warned of weak demand in the coming months, so far none has announced any plans to slow or defer its product rollouts as a result.

          "I am not concerned at all [about vendors delaying products this year]," says Dan Kaberon, a parallel sysplex manager at Hewitt Associates a Lincolnshire, Illinois-based human resources outsourcer.

          Hewitt has just placed orders for six of IBM’s new 64-bit mainframes, which started to ship late last month. Kaberon says Hewitt plans to upgrade as needed through the year.

          "In fact, it’s when things slow down that vendors push much harder to show something that has the longer fin and the brighter chrome," Kaberon says.

          Such sentiments come at a time when corporate users are getting ready for some major product migrations. All of the server vendors have recently announced significant refreshes to their technology and are expected to ramp up to full production this year.

          "These are all infrastructure products that are budgeted for," says Joyce Becknell, an analyst at Boston-based Aberdeen Group. "I can’t imagine a vendor saying they are going to delay rolling them out."

          Other products expected in 2001 are new servers based on Intel’s upcoming Itanium chip — the first of its new IA-64 family — from all major vendors of Intel hardware.

          "I don’t see vendors holding back anything," says Bob Sutherland, an analyst at Technology Business Research in Hampton, New Hampshire.

          That’s because doing so will only concede the market advantage to other vendors in an already tight situation, according to analysts.

          Spending slowdowns are part of the challenge of being a global IT vendor, says Mark Hudson, a global marketing director at HP. In that sense, the current US slowdown isn’t very different from the Asian slowdown that HP faced some time ago, Hudson adds.

          "Anytime there is a slowdown, you need to step back and look at the basics and make sure you understand what customers really want," he says. "But there will be no change in HP’s product plans as a result."

          "Nothing has changed," agrees Lynn Thorsen-Jensen, a director of strategic marketing for Compaq Computer’s high-end server business. The market slowdown may lead to a re-evaluation of demand-creation and awareness-generating campaigns, but it won’t result in any product delays or changes, Thorsen-Jensen says. "The [high-end] markets we are focused on are moving forward strongly," she says.

          "If anything, vendors are only likely to roll them out faster" to gain any advantage they can in a depressed spending environment, she says.

          Any cost-cutting measures by vendors are likely to affect marketing and sales efforts instead of product and support, Becknell says.

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