Gartner: a downturn is a perfect time to prioritise

The announcement was made by Gartner CEO Gene Hall, and its head of research Peter Sondergaard at the analyst’s Symposium/ITxpo 2008 in Sydney on Tuesday.

“A downturn is a perfect time to prioritise. We have been through difficult times before. We are confident we will come through these changing times successfully. IT is essential to our customers,” said Hall.

However, Hall does believe that organisations in some industries, such as financial services, government and retail will reduce its spending in 2009.

“IT firms will be ok if they plan ahead,” he added.

According to Sondergaard the worst case scenario is that IT budgets drop by 2.5 percent.

He believes hardware will be the most affected sectors and key areas to focus on are cost optimisation, virtualisation, IT modernisation, Green IT and workforce management.

“We have been here before in the 2001 recession and the 1997 Asian financial crisis,” he said.

“We learnt that during tumultuous times, executives and managers need to be advisors and consultants. We have expected unprecedented change over the last 12 months and this is not going to change."

Sondergaard said the IT industry has to do three things to plan ahead, assume the growth in IT budgets will be between 0 and 2.3 percent, start cost optomising, and think like a CEO.

“IT is now embedded inside running the business. On a global basis, IT spending generally lags the economy by at least two quarters. Unlike the dot com boom organisations now view IT as a way to transform their business,” said Sondergaard.

“Hardware will be the most affected sectors. North America and Western Europe will be the worst affected but APAC will not be immune.

“It means evaluating vendors and markets you buy from and vendors that have a global presence. Vendors need to find a balance between a product and service portfolio. Technical innovation and business growth are all created in negative economic situations,” he added.

Gartner claims the channel should use the current downturn to modernise for growth.

It made suggestions such as replacing old servers or risk higher power consumption, change the infrastructure, software needs to be virtualised so they can be used as ‘portable bubbles’.

Question everything you do and be frugal, reassure the people who are most important to you, plan for the future, prepare for dismal IT spending, reconsider budgets, conserve your budget and don’t decide where to cut, but where to spend.

The Gartner Symposium/ITxpo 2008 runs from Tuesday 11th November until Friday 14th November at the Sydney Convention and Exhibition Centre in Darling Harbour.

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