Are There Recession-Proof IT Products?

October 23rd, 2008 by Julia Lim

You have to live under a rock not to know that the financial crisis is having (and will continue to have for some time yet) a major impact on buying decisions, both corporate and personal. Gartner cut its 2009 IT spending growth forecast to 2.3%, less than half of the 5.8% it originally predicted just in August. And in North America, even more drastic cuts – growth will be only 0.5%, way down from the original 5.3% predicted.

“Developed economics, especially in the United States and Western Europe, will be the worst affected, but emerging regions will not be immune,” said Peter Sondergaard, the global head of research at Gartner. “Europe will experience negative growth in 2009, the United States and Japan will be flat.”

Forrester is more optimistic (so far). Back in September, the analyst firm revised their prediction downward to an increase of 6.1% instead of the original 9.4%.

But both firms agree that the first IT purchases to feel the cut are in hardware – PCs, servers, storage devices, communications equipment, etc. Next up, software purchases and IT servers.

So are MSPs immune to the economic slow down? With expected layoffs and certainly hiring freezes across the board, turning to MSPs to pick up part of the load is starting to look better and better. At the recent MSP Alliance conference in Chicago, attending MSPs had a rosy view about growth in their industry, with sales cycles actually shortening from 6-12 months down to 2-6 months and 25% of them actually increasing prices in the past six months. It’s a good time to be a MSP.

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