Wall Street Journal: “Corporate spending on computers, software, storage and communications gear fell 8.4% last year, the first annual decline since 1958, according to government statistics.” Yowza!! After death, taxes and Moore’s Law, few things have been more certain than increasing corporate IT spending. This statistic confirms we’re experiencing more than just a hangover after the Internet boom.
The article goes on to say that things look only marginally better this year, with many enterprises cutting IT budgets even further than in 2001. That tracks with what I’ve been hearing from startup enterprise software companies. Solutions that have a clear, quick return-on-investment, and that address a tactical pain point for customers, can still be sold effectively. No one wants to hear the big vision story — that can wait.
Large enterpise application and networking vendors may actually be worse off than the startups in this climate. When you’re small, two or three deals this year will keep you on track. But if you’re Siebel or SAP, you’re effectively a proxy for the market.