Avoid the 300 Billion Dollar Loss

November 14, 2008 — Leave a comment

First, don’t forget to tune into today’s podcast on building your profit program for 2009 – an essential step in making this coming year a year for growth.  Find out more at http://dstelzl.podbean.com/

There is good news.  IDC expects IT spending to continue growing in 2009; however, spending projections are down from nearly 5% to 1%.  That means a 300 Billion Dollar loss over the next four years, with a recovery expected by 2012!  Who will take that loss?  I expect resellers, with heavy competition and little notible differentiation, to be impacted the hardest.  Larger companies have significantly cut spending, according to recent conversations with sales people and business owners.  Expect 2009 budget increases to be minimal with large IT initiatives put on hold.  If you’re an account manager working in large named accounts you’ll likely have some level of run rate business.  If you’re a “hunter”, you may find yourself working overtime to find qualified buyers. 

Smaller markets are being hit hard too; however those who have successfully built recurring revenue models seem to be holding steady.  New client acquisition on the other hand is slow.  These resellers may be OK as long as they control operational costs; however, without a strong value proposition, sales people dependent on monthly commission checks are going to find it hard to land new contracts.  One bright spot in all of this.  Those who have created offerings in the security space, with a consultative and assessment focus, seem to be busy.  Esculation in cybercrime (which I’ve included in recent posts) seems to be offsetting financial concerns as companies work to preserve their data.

As you start thinking about 2009, keep these things in mind.  Focus on value you bring to your clients, work on messaging appropriate for decision makers, and build solutions that offer cost advantages, risk protection and that lead to recurring revenue.  Consider using assessments to drive new business and focus your marketing efforts on risk and business transformation activites.

You can learn more about what IDC is saying at  http://www.usatoday.com/tech/news/2008-11-12-tech-spending_N.htm

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