Andy on Enterprise Software

Recession?

November 19, 2008

Usually when economic times are tough then there are a series of things that the bean counters do to rein in costs. First they ban business travel except for customer facing situations, followed by freezing training budgets and recruitment, before sharpening their knives more seriously. The first two of these mean that conferences are usually at the sharp end of corporate spending cuts. I have just returned from speaking at a BI/MDM conference in Amsterdam, and was pleasantly surprised to see a healthy attendance of paying customers, a large number of which appeared in the last few days. This must have been a considerable relief to the conference organisers, and it was certainly nice to be speaking a packed room rather than one with rows of empty seats.

It is certainly hard to be sure just how deep recession is likely to be, with seemingly contradictory data all around. A scary figure is the cost of shipping (the Baltic Dry Index) which is a reasonable predictor of the flow of trade. This has dropped a little matter of 95% since the peak in June, with shipping companies cancelling orders and talking of mothballing ships. This kind of broader economic data would seem to suggest a fairly sharp recession is on the cards, and this must feed through into lower IT expenditure eventually, just as night follows day. Of course some areas will be hit harder than others, but I am always suspicious of claims that a certain area is “strategic” and so will be unaffected. Usually this is whistling in the dark by vendors. We shall see.