recession

Goldman Sachs: IT spending slips, virtualization rises

Goldman Sachs has bad news for most of the IT economy: IT spending will slip from 7 percent growth to 5 percent growth in 2008. While not yet recessionary, the outlook is dipping dangerously close to that, as its indexes in its latest IT spending report show:

Expectations of budget growth remain down significantly on a year-over-year basis, with many CIOs limiting their purchases to projects with a high and fast ROI. We continue to believe that 2008 IT spending will decelerate to 5 percent from 7 percent in 2007....Demand for discretionary IT projects dropped to its lowest point in the history of our survey, with caution beginning to spread to the offshore providers.

CIOs have emphasized to us that they are buying on a need versus want basis, are often downsizing deals to fit with current budget constraints.... In fact, contrary to general tightening in spending, purchases with an especially compelling ROI are being accelerated in the current environment.

The sky isn't falling, but it's going to scrape a few vendors' heads in a worsening IT economy. No wonder venture capitalists are bemoaning their exit options and returns.

But not everyone is going to get pummeled. In terms of spending priorities for 2008-09, server virtualization and server consolidation were ranked No. 1 and No. 2, respectively, with cost cutting hitting No. 3 and grid computing and on-demand computing rounding out the very bottom of the list. (In addition to open-source software, which is not surprising because people shouldn't necessarily be proactively "buying open source" so much as buying open-source virtualization, applications, etc.)

In short, no one is clamoring to spend money on buzzwords.… Read more

Oracle is up, but is the technology economy down?

Oracle knocked another quarter out of the park, with fourth-quarter profit up 27 percent and revenue climbing 24 percent to $7.2 billion. Life is good, yes?

Well, maybe. Oracle President and CFO Safra Catz indicated that she is expecting a tough summer quarter, with tightened technology spending on the horizon. This, coupled with RIM's quarter, which was strong but below analyst expectations, suggests that we may be in for a long, hot summer.

Yes, open-source companies and software should fare well in a down economy as buyers search for bargains. But in such an economy, buyers are also … Read more

Where butterface had the No. 1 movie at the box office

Steve Guttenberg joins us on the show today where we talk about Google Android, Sex and the City's box office performance (Jeff won that bet), and how less people are having babies. Plus we'll talk about the rise in online talent agencies and a helicopter's run in with a never-before-seen jungle tribe. Good times! EPISODE 111 Download today's podcast

Where you don't mess with the Yu-Tang Clan

YU-TANG CLAN AIN'T NOTHING TO BUCK WITH! Founding members the Yza, Method Man, and Ghostface Killah (aka Tony Starks) keep it cutty and explore tech's first format war; skyrocketing Wii Fit prices; losing water on film; and our culture's lousy obsession with movie remakes. McLovin and Sr. Sean Connery also stop in to discuss Mr. BAKalar's questionable fashion choices. EPISODE 104 Download today's podcast

Will online ads come out ahead after recession?

SAN FRANCISCO--Online advertising may or may not be a recession-proof business, but some believe it at least will fare better than other ad channels during hard economic times.

"In times of recession, marketers move dollars from more traditional media outlets like TV onto Web advertising, where to some extent the CPMs (the cost per 1,000 ad impressions delivered) are lower, and the ability to measure ROI (return on investment) is much higher," said Jennifer Moyer, chief operating officer of Washingtonpost.Newsweek Interactive, speaking during a panel discussion at the Ad:Tech conference here.

Jeremy Wright, global director … Read more

The recession comes to Silicon Valley

It was just a matter of time. Silicon Valley, which has remained largely impervious to the increasingly global economic downturn, is starting to feel the strain, according to The New York Times. It's not that housing prices are in freefall (they're not) or that people are being laid off en masse (they're not), but rather that the exit opportunities have largely dried up. According to the Times:

During the first three months of the year, only five companies backed by venture capital investors went public on Wall Street...That is down from 31 in the fourth quarter of last year, and is roughly the same level as at the nadir of the dot-com bust.

There was also a sharp falloff in the acquisition of start-up companies by bigger corporations...There were only 56 acquisitions in the first three months of the year, down from 83 in the fourth quarter.… Read more

Use SEO to optimize your recession

Earlier this week I talked about how a recession may be the best thing for SEO. Let's revisit that bold statement and also how to make the most out of a downturn in the economy using SEO.

There will be firms and people within the industry that will feel the same pains of a recession that everyone else will. I'm certainly not claiming that you can sit back and coast in to success. In fact, the statement is less about SEO firms and practitioners, and more about SEO as a tool.

If you are in-house and have been struggling to get the resources or attention you need to make SEO a priority, then this may help to increase the urgency of SEO. Or if your firm provides SEO services, then you may be able to use the concerns and challenges that will come with a recession to get the attention of the decision makers to illustrate how SEO may be a more cost-effective solution.

A recession or economic downturn will lead consumers and businesses to reduce their spending as their confidence in the economy, their business, jobs, investments and/or retirement weakens. While there may be a subset of the market that "quits buying," what we are really talking about is a reduction in spending. There will still be necessities and essentials that must be purchased. Beyond that, we may expect to see purchase adjustments or a scaling back.

For instance:… Read more

Recession: The best thing for SEO

So here we are, one quarter down and recession to go. Recession has become an unfortunate but popular topic in 2008. Some people follow strict definitions of what qualifies technically as a recession while others speak purely from opinion--or maybe they are speaking from the pinch they are feeling in their wallets. For most, they could care less what you call it; labels don't make the impact they are feeling any better or any less painful.

In most industries, when things slow, something has to go. Will that be cutting back on seemingly frivolous expenses, going to fewer industry shows, reducing ad spending, or worse, cutting jobs? Like many industries, search marketing firms are considering these choices as well, and rather hoping that this slowing, downturn, recession, or whatever you want to call it, actually presents more opportunities than hard choices.

Only time will tell, but I like to think the feeling that search marketing firms may be able to find opportunities during these trying economic times are spot on. But don't think this will just be a slam dunk--every opportunity also presents challenges.… Read more

Is Red Hat weathering the downturn better than Oracle?

Both Red Hat and Oracle had excellent quarters, but Oracle's was apparently not "excellent" enough for Wall Street's tastes. Its shares and the market went south this week on fears that technology spending is in decline.

In addition, Wall Street apparently didn't notice that Red Hat actually raised its fiscal year 2009 guidance this week.

Consolidation is one way to improve earnings in a down market, but open source may well be a better way as The New York Times opined.

Oracle's total software revenue was up 21 percent, to $4.2 billion. Pretty … Read more