A Light At The End Of A Long Dark IT Tunnel?
The sky is falling. At least that’s what the talking heads all seem to be saying.
No doubt, times are tough, and the channel is suffering as credit markets tighten and IT spending for consumers, SMBs and enterprises tighten. Companies are cutting back on capital expenditures and hiring, which means shrinking budgets for hardware and software alike.
As Al Senia from IT Channel Planet writes,
“IT companies are no longer able to compensate for the weakness in the U.S. market by seeking refuge overseas. National economies in the UK, Ireland, Germany and Spain are tanking. In Asia, slowdowns in growth are occurring in South Korea, China and Japan and stock markets have been decimated. The channel simply is not going to get any more “bounce” by playing the overseas card.
So overseas isn’t the answer, even for global IT firms. Maybe the answer’s here at home…
Things aren’t a whole lot better in this country, where consumers and businesses are watching credit evaporate. Without sufficient credit, there’s no capital investment, business expansion or hiring. “It’s a bleak picture,” Andy Golub, says ChangeWave Research. “There doesn’t seem to be any immediate catalyst on the near horizon that will lift spending.”
Ok, maybe not. Well, hardware and software sales can’t look that bleak…
In its August survey, ChangeWave reported 30 percent of enterprises cut their IT spending in the third quarter and 29 percent say they will cut it or stop it in the fourth quarter. Only about 12 percent say they will spend more than expected in those quarters. Couple these statistics with the credit crunch impacting small and medium businesses, and you can project just how bleak things suddenly appear.
Well IT Channel Planet is just full of sunshine, aren’t they?
The good news – and there is some – is that if channel partners can hold on through the current turbulence, there are likely to be smoother skies ahead. The financial sector is in an economic nosedive, but as thousands of IT (and other) workers get laid off, there’s going to be a skills shortage that the channel is going to have to fill. You can bet IT outsourcing will be on the rise.
Ah, there’s the rub. You have to survive the bad times to thrive in the good times. Wondering if your firm will weather the storm? Trying to figure out how to actually gain marketshare in a shrinking economy? Here’s a quick litmus test to identify who will win and who will lose:
* Those firms who contain costs, while keeping their promises to clients…
* Those firms who reduce fixed costs, while maximizing flexibility…
* Those firms who find ways to win new projects and fulfill them profitably…
* Those firms who take advantage of their competitors’ fumbles to win new clients…
These are the firms that will survive these tumultuous times and come out the other side of this dark tunnel. We’re seeing VARs, solution providers and IT firms of all shapes and sizes who are living this every day. They’re embracing a contract labor force to fulfill their IT services without spending on travel or the hiring and training of W2 technicians.
As you’re brainstorming about how to lean up your operations and fatten up your financials, I invite you to use OnForce the next time you need to find a contract service pro. We’re so confident you’ll have an exceptional experience that we’ll even pay for your 1st work order.
