Look around and you’d think it was Armageddon: Google wants to take up to 10,000 contractors off its books, Sun is laying off 6,000 and HP is losing over 24,000 – enough on its own to sell out your team’s football stadium (unless your team is really quite big).
Is this proof positive of a technology spending recession? Maybe, but a decent chunk of it is a tom-tom signal to investors that these firms value stockholders. The truth is that Google is still hiring the brightest and the best, as is Sun and HP, even with the EDS diet to go through. But in a down market someone has to be thrown to the lions – at least until the next up in the market.
As long as technology has value, R&D departments will keep on speculating in the hope of building a better mousetrap – it’s in their DNA. Also, it’s a myth that IT spending is falling off a cliff. The ghost of Lehman Brothers might not be investing but most firms will need to keep on spending to stay competitive and sort out governance. IDC still expects a near three per cent uptick in IT spending globally next year; most of us see a flat outlook with bright spots in growing economies. A lot of sectors, such as pharmaceuticals and healthcare, are unaffected, and there is even residual venture funding for startup companies that got in before the end of the boom times.
The Christmas parties might be getting cancelled, but the IT lights are not going out for a little while yet. And as Mike Norris of Computacenter once said, there are only three certainties in life: death, taxes and IT spending.