IT spending and technology

Any one else notice the decline in IBM and HP advertisements on national television?  This trend really did not come to mind till I realize the recent struggles by Network Appliance.  Network Appliance is an advanced data storage systems located in the heart of silicone valley.  They are usually a leading indicator of capital good spending.

Most the news clippings indicate that IT is struggling due to the European slowdown.  While this is a reasonable argument, there must be a few other factors in play.  In general, coporations and their employees are becoming more technologically savy.  While it was acceptable for executives to be inept with technology in the booming 90’s, this trend has reversed.  Executives need to be relatively savy simply to survive for security and communication purposes.

Consequently, executives now in the position to purchase IT products are better prepared to make purchasing decisions.  The direct and indirect implications are lower profit margins for outfits such as IBM, HP, Oracle, and SAS.  I assume European executives were simply a couples year behind Americans in the adoption of computer systems.

In all honestly, I am simply hoping that the slow down in IT sector is really a result of the maturation in the industry.  Otherwise, the IT spending drop may be a negative economic indicator that will be biting us in the near future.

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