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Future of IT all doom and gloom – or not?


Reading the news from the US this week, one could be forgiven for feeling the future of IT is somewhat unstable. ‘I have never seen a slump so bad’ was the comment from the President of Sun Microsystems, Ed Zander, who said that he has never seen a technology capital-spending downturn as 'dramatic and sudden' as the current slump that has resulted in cutbacks at blue-chip technology companies.

The Americans invested heavily in businesses. UK investors displayed some trepidation in approaching these unknown waters; it would seem inevitable many businesses could not survive, resulting in a downturn in the US economy.

'The Shrinking IT Budget’ an article By Cheryl Rosen, at CMP’s Techweb reports that research carried out by Information Report in the United States Information Week shows that out of 300 businesses featured in the survey, over half say their budgets for IT are either flat, or declining. Given the recent slump in the American economy, this is hardly surprising. Upon closer inspection the survey results reflect a subtle rather than a downward decline, more a levelling out than a collapse.

Inevitably businesses have cut their budgets on IT. Over the last few years much of the expenditure was due to acquisition of new Technology and retraining of staff. Once these requirements have been accomplished the IT budget will become less demanding on their capital. Businesses will continue to invest money in Technology, but perhaps at a less demanding level than of recent years.

On a brighter note this week, a survey of 1,000 leading companies in the UK by the Confederation of British Industry (CBI), indicates that Internet business will see renewed growth over the next couple of years, bringing fresh optimism amid the ongoing dot-com fallout. Study promises Internet revival, but warns that government must speed up delivery of broadband Internet access.

Comments welcome please e-mail Kathleen M Hopper, IT Training Editor.


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