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Recession lessons...will IT come out stronger?

Recession lessons...will IT come out stronger?

IT spending has taken a big hit from the economic downturn, but analyst firm IDC tips a global comeback from 2012.

The interim years present a long, hard slog for local tech firms already feeling the pinch. What IT decision makers do in such times of crisis can have far-reaching consequences.

Most firms have had no choice to pare back their operations, at least to some extent. This downsizing, and more broadly the recession, has the potential for both positive and negative spinoffs.

On the plus side, tech companies have had to refocus according to core strengths, form strategic partnerships, find new and creative ways of promoting themselves and plan for the long term.

There are also those who’ve found the current climate an opportune time to launch into the market in the absence of greater competitor numbers, and to identify and place greater value on their best customers.

This is also a market in which start-ups, and their more established counterparts, can access a bigger pool of skilled staff in many areas. It’s a marked contrast to the shortages experienced in recent years.

The downturn has also forced the industry to examine the true value it offers customers. There has been a slew of recent announcements positioning products and services in terms of their cost and resource saving benefits, rather than their bells and whistles. There’s also a greater recognition of IT as part of business strategy, rather than an add-on that only cash-rich companies can fully utilise.

This has been particularly evident in the enterprise, where organisations are using technologies that may typically have been the preserve of small and medium businesses.

Would issues such as managed services and cloud computing, flexible licensing and financing have secured such prominence, in a climate where reducing hardware costs and increasing the predictability of your IT bill weren’t in high demand? Would the netbook category, as an affordable PC option for mobile workforces, have grown to the extent that it has?

Vendors have been telling me of late that increased market competition, while it puts pressure on their own firms, is beneficial for them, customers and partners alike.

Customers who have grown comfortable with a long-standing vendor or partner relationship are said to be more open to new offers, as they seek value for money.

Vendors and distributors are also increasingly amenable to working together, providing different pieces of a collaborative offering that may have cost more, or presented less value, as parts of an entire solution.

It’s not all silver lining and no cloud, though.

The recession has already put a few firms out of business, while others have downsized. Some have been swallowed by bigger players.

The loss of what in some cases are key staff and resources, will make it all the more difficult to rebuild when times improve.

When the recovery does begin, there will have been a sustained period of reduced investment and innovation. Coupled with the fact international trends reach New Zealand later, meaning our upswing could be behind that of other nations, we may walk out of the dark tunnel further behind the rest of the world’s tech industries.

Although the next 12 months, at least, won’t be easy, local IT firms should take what lessons they can out of tough times, and remember the strategies that got them through.

Be nimble, don’t be all things to all people and work together.


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