Report claims IT Capital Spending Will Slow In 2007
Despite recent improvements in the economy, the outlook for IT spending in 2007 calls for slower growth, particularly as it relates to investments in hardware. What's a hardware rep to do?
Forrester Research reports that overall tech spending will grow only 2 percent next year, compared with an estimated 6 percent this year and 7 percent in 2005. Capital spending, which Forrester is forecasting to be up 3 percent totaling $354 billion this year, will decline by 1 percent in 2007.
If you work in the hardware space, a new strategy might be in order, or a tweaking of your value statement to reflect your customers refocused IT vision.
If you are in the services arena, that is the area they peg for growth in the coming year. Solution Providors and integrators are looking at a 25 percent growth.
The reasons for the decline in hardware spending has more to do with lower costs for commodities and the current volatile energy costs.
Forrester predicts a slowing US economy that also transfers to the cutbacks slowing down spending.
Software sales are expected to continue to grow but computing hardware sales will essentially be flat. This forecast is the opposite to what market leader Cisco Systems is telling Wall Street: that it expects growth for the 2007 fiscal year, which began Oct. 1, to be in the range of 15 to 20 percent.
While there are always reports of declines and increases in sales, overall what I have seen over the past 10 years is that it can be regionally based as well as limited to certain vertical markets. Five years ago, I had some manufacturing firms that were frozen in their IT spending, while some services organizations were on a spending spree. Know thy territory and you can adopt your sales strategy to accomodate any bump in the road.
Hope Blaythorne
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