UK corporate PC spending depressed

Computacenter, Europe's biggest computer dealer, yesterday issued a trading update: second half is better than the first, and it's meeting expectations.

However, Mike Norris, chief executive, notes: "IT spending in our markets has remained depressed and conditions in certain sectors, most notably investment banking, have deteriorated since the second
half of last year."

Computacenter is talking up a good performance in managed services. But the engine of the company's turnover and the peg upon which it flogs higher margin services is computer hardware.

At one point, Computacenter accounted for 20 per cent of all PC sales in the UK - maybe it still does. This makes it a bellwether for corporate PC orders.

And it's clear that the hoped for uptick in demand, forecast by many analysts, is not happening yet. Rule of thumb is that corporates upgrade their PCs every three years. In 1999 there was a huge sales boom, with companies buying like Billy-o to fend off Y2K meltdown.

They're not opening their wallets yet.

On the micro-level, Computacenter can shave a few more points from costs, win a point or two in market share, build service revenues, but it is by sheer size, unable to buck the market. Profits growth is contingent upon market growth, the company says. ®