Vendors need to prove immediate return: IDC
- 08 December, 2008 22:00
In a market tipped to become rife with uncertainty and prone to delayed or cancelled IT expenditure , vendors will have to show their offerings provide return on investment nearly straight away, a new IDC report says. The study, titled Economic Crisis Response: The Impact on the New Zealand ICT Market, gives a perspective of the early impact of the current downturn in the local market, which comes after a period of extensive growth, IDC says. "Activity will slow down across most sectors of the New Zealand economy,” says country manager Amit Gupta. “Investment and expenditure of all kinds will be more heavily scrutinised and possibly delayed, scaled back, or even cancelled. Vendors will need to prove almost immediate ROI for their offerings." Australia/New Zealand software programme manager Ullrich Loeffler says technologies which reduce energy, travel and human resources costs will be in heavy demand. These include video conferencing instead of travel, managed services rather than infrastructure investment and software to improve efficiency.
"Products and services that require little upfront investment will become more attractive as access to financing dries up,” he says. “Predictable cost structures, such as all-you-can-eat services, will appeal in these uncertain times. Services delivered via a cloud model may finally gain a foothold as a result of these two factors.” IDC says hardware and software will be hardest hit by the downturn, with services and telco more resilient but not immune to negative impacts. Consumers and organisations will extend upgrade cycles and make do with what they have, the analysts say. However, it doesn’t expect ICT projects in progress to be abandoned. Rather, it predicts vendors will have difficulty closing pipeline business for which approval is needed in the next six to 12 months.