Financial meltdown impacts channel order books

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Financial meltdown impacts channel order books

Microscope contributor

The meltdown in the global financial market has created a tidal wave of uncertainty among IT buyers that were already twitchy about ripples in the global economy, dramatically altering resellers’ and integrators prospect lists.

The collapse of Lehman Brothers and the troubles at Merrill Lynch, HBOS and insurance firm AIG have sent the global stock markets went into a tail spin, taking a toll on IT budgets, according to a host of industry stalwarts.

Customers are getting increasingly nervous said Mike Norris, chief executive at Computacenter, “the whole world is treading with extreme caution”.

“Clearly the credit crunch will be with us for a while yet but how long will this extreme caution last? That is the 64 million dollar question nobody knows the answer to,” he stated.

The credit crunch that culminated in the recent woes across the banking sectors has spread fear and doubt throughout the entire economy and was impacting project sign offs, said Tom Kelly, UK managing director at Logicalis.

“There is a lack of visibility out there in terms of whether deals will go ahead or not, many have been postponed or cancelled,” he told Microscope,

The pipeline was less certain agreed 2e2 CEO Terry Burt,even integrators that focused on cost saving technologies, have strong client relationships and a good level of annuity-based revenues are not immune to the downturn, he said.

“Anyone that has strong growth forecasts for next year are either very well placed or are deluding themselves…it is difficult to call what will happen next,” he said.

Stuart Fenton, EMEA president at Insight Enterprises echoed the comments of others, “large scale enterprise projects of any substance are being postponed and that is particularly evident on the hardware side.”

The Government sector may be relatively insulated from the current problems said Tara Brady, CEO at Calyx but he disagreed with analyst reports that IT remained a key priority in firms to increase productivity and improve efficiency.

“IT is a back office function and that is always the first thing that companies looks reduce when times get tougher,” he said.

Russell Bolan, European CEO at Dimension Data agreed 2009 would be a tough year for all in the channel, “it will be extremely competitive and there will be an impact on margins but what is new.”

But sounding a more sanguine note he said customers will increasingly look to outsource non-critical IT solutions and “there will be opportunities”.


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