The meltdown in the global financial market has created atidal wave of uncertainty among IT buyers that were already twitchy aboutripples in the global economy, dramatically altering resellers’ and integratorsprospect lists.
The collapse of Lehman Brothers and the troubles at MerrillLynch, HBOS and insurance firm AIG have sent the global stock markets went intoa tail spin, taking a toll on IT budgets, according to a host of industrystalwarts.
Customers are getting increasingly nervous said Mike Norris,chief executive at Computacenter, “the whole world is treading with extremecaution”.
“Clearly the credit crunch will be with us for a while yetbut how long will this extreme caution last? That is the 64 million dollarquestion nobody knows the answer to,” he stated.
The credit crunch that culminated in the recent woes acrossthe banking sectors has spread fear and doubt throughout the entire economy andwas impacting project sign offs, said Tom Kelly, UK managing director atLogicalis.
“There is a lack of visibility out there in terms of whetherdeals will go ahead or not, many have been postponed or cancelled,” he toldMicroscope,
The pipeline was less certain agreed 2e2 CEO Terry Burt,even integrators that focused on cost saving technologies, have strong clientrelationships and a good level of annuity-based revenues are not immune to thedownturn, he said.
“Anyone that has strong growth forecasts for next year areeither very well placed or are deluding themselves…it is difficult to call whatwill happen next,” he said.
Stuart Fenton, EMEA president at Insight Enterprises echoedthe comments of others, “large scale enterprise projects of any substance arebeing postponed and that is particularly evident on the hardware side.”
The Government sector may be relatively insulated from thecurrent problems said Tara Brady, CEO at Calyx but he disagreed with analystreports that IT remained a key priority in firms to increase productivity andimprove efficiency.
“IT is a back office function and that is always the firstthing that companies looks reduce when times get tougher,” he said.
Russell Bolan, European CEO at Dimension Data agreed 2009would be a tough year for all in the channel, “it will be extremely competitiveand there will be an impact on margins but what is new.”
But sounding a more sanguine note he said customers willincreasingly look to outsource non-critical IT solutions and “there will beopportunities”.