Tech Spending Appears Mired in Malaise

Ann All

When we interviewed Paul Carton of ChangeWave Research back in September, he said it was too early to tell whether tech spending slowdowns in 2006's fourth quarter would be "indicative of the soft landing the Street has been looking for, or a harbinger of tougher days to come."


It's beginning to look as if tough times are ahead.


Most of the tech execs responding to a late 2006 CIO Magazine poll closed out the year by lowering their spending projections.


And tech vendors and analysts at a recent Reuters summit sounded pretty guarded when discussing their growth expectations for 2007.


Both Gartner and Goldman Sachs gave lukewarm forecasts, noting that U.S. companies remain spooked by a slowing economy, rising energy costs and a slump in the real estate market.


An EMC executive says his company expects spending from SMBs and non-U.S. markets should help it weather dismal, "single-digit growth" in the U.S. A Cisco executive noted the "cyclical" nature of U.S. tech spending, saying he doesn't spend a lot of time worrying about "short-term swings" in capital IT expenditures.


Some observers wonder just how "short-term" the latest drop in spending will be, however. Noting that companies like HP and Citigroup expect to trim billions (with a "b") of dollars from their budgets with "IT rationalization" programs, Nick Carr says that such programs mark a clear and continued downward trajectory for IT spending.

Add Comment      Leave a comment on this blog post
Jun 4, 2007 11:50 AM Bob Bob  says:
Where companies are missing the mark in tech hiring is that many restrict their hiring practice to "locals" only. Some tech workers are willing to pay their own relocation expense for a great right fit opportunity to leverage their already proven skills. Reply

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