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2003 Tech spending flatter than flat pancake

More consolidation - Gartner

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Tech budgets through 2003 will not grow as many predict, falling instead by 0.03%, finds a new tech spending confidence study from Gartner.

It might not sound like much but it shows the tech blues will continue for at least another year. Tech spending in 2003 will be flat, the same as in 2002. One can assume that the IT departments know what they are doing ( Really? -ed) so it's doubtful that they will be sorely affected by the lack of readily available funds. But the vendors will be hammered.

Gartner believes this lack of funds is creating what a "demand gap", between demand for technology and technology budgets. It doesn't sound entirely accurate to us. Rather, organisations are at last realising that they have spent far too much on technology; and the business people, as opposed to the techies, are now taking charge and demanding real value be squeezed out of these elaborate, and frankly shoddy, systems. This is a good thing.

Still, it will hurt the vendors. The hype is gone, interest is diminishing and now they have to find new ways to survive. Another Gartner study reckons that the vendors will do this by continuing the onslaught of consolidation - that is the only way they are likely to get money flowing around the industry.

The problem, as Gartner rightly notes, is that there are simply too many IT vendors out there. The big solution vendors are increasingly leading the way and winning the contracts, while the smaller, specialist point product vendors are losing business and failing to compete effectively.

That means there are some prime opportunities for acquisitions. Indeed, the past year has seen this trend reach unprecedented heights with HP's acquisition of Compaq and IBM's acquisition of PWC Consulting. And there's more to come.

One of the markets currently primed for consolidation, according to Gartner, is telecommunications which, as demonstrated by KPNQwest, is now in a rather startling state of flux. There are no predictions about who, when or where the acquisitions are likely to take place but no doubt Europe will be at the centre of developments leading, as it does, the majority of telco developments.

© IT-Analysis.com

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