Making Money on Technology in a Recession

Everywhere you turn these days, some research organization
or another is cutting its spending forecast for 2009.

The latest case in point is IDC, which
is cutting
its forecast for IT spending growth in 2009
from 5.9 percent growth to
2.6 percent growth. Similarly, the folks at Computer Economics, a research
company based in Irvine, Calif.,
recently released the details
of a study
of 159 North American IT organizations that found that while
aggressive cost-cutting measures are already under way, overall spending will
be flat as some organizations look to reduce spending by as much as 3 percent
while others still anticipate a 5 percent increase.

More optimistically, CompTIA recently released a study
of 772 small to medium -size businesses
that found that 51 percent said they expect
to increase IT spending while 49 percent said they plan to decrease IT
spending.

The
long and the short of this is that nobody knows for sure what exactly
is going on with IT budgets in 2009, other than some companies are
trying to cut back some spending across the board, while others are
trying to cut back IT spending in some areas so they can spend more
money in other areas.

Unfortunately, that kind of keen understanding of the market
makes it a little difficult for solution providers and their customers to plan
for the coming year. So maybe what we should do is take a step back and look at
what technologies are strategic in 2009 and which types of technologies tend to
gain momentum in a recessionary climate.

With that goal in mind, we offer the following technologies
for your recessionary consideration:

  • Open-Source Software – It’s true that over a three- to five-year return on investment window, proprietary software can be viewed as
    being less expensive, but with a price of acquisition near zero, open source is
    hard to ignore.
  • Virtualization Software – The basic concept of
    virtualization is to increase the utilization rate of existing hardware assets.
    That’s music to the ears of customers under extreme budget pressure.
  • Managed Services – Labor is still the biggest expense when
    it comes to IT. Reducing the cost of labor around IT is at the top of the CFO’s
    agenda.
  • Cloud Computing – Perhaps this is little more than hosted
    services by another name. But when everybody is using the same set of
    buzzwords, it’s best to pay close attention.
  • Software as a Service – Whether it’s delivered by a major
    vendor or a local solution provider, SAAS is a solution to be considered for customers short on capital expense
    budgets required to build on-premises applications.
  • Security – How security is achieved may be going through a
    major transformation, but the need for it has never been more acute.
  • Governance – Along with risk management and compliance, the
    whole downturn in the economy has empowered government officials to introduce
    even more regulations.
  • Business Intelligence – The downturn in the economy has
    people all over the business community looking for more insight.
  • Systems Management – Reducing the number of people required
    to manage IT systems is going to resonate with customers as they struggle
    through the downturn.
  • Storage Management – Regardless of the state of the economy,
    the amount of data that needs to be managed continues to grow
    exponentially.
  • Video Conferencing – All the talk is about unified
    communications, but when you get right down to it, customers are trying to
    reduce travel costs.
  • Green IT – This is going to be a whole lot less about
    saving carbons and a whole lot more on reducing energy costs.

All in all, there are at least 12 recession-resistant
technology categories that solution providers can make a lot of money on during
a downturn. The key issue is whether solution providers have there practices
aligned to take advantage of some of the inherent opportunities in an economic
recession. No doubt, times are tough, but that doesn’t mean they have to be
tough all over.

 

Michael Vizard
Michael Vizard is a seasoned IT journalist, with nearly 30 years of experience writing and editing about enterprise IT issues. He is a contributor to publications including Programmableweb, IT Business Edge, CIOinsight, Channel Insider and UBM Tech. He formerly was editorial director for Ziff-Davis Enterprise, where he launched the company’s custom content division, and has also served as editor in chief for CRN and InfoWorld. He also has held editorial positions at PC Week, Computerworld and Digital Review.

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