I predicted a while back that the current economic crisis would affect IT spending significantly. It appears that this is happening pretty quickly–ChangeWave Research recently published an interesting survey from vendors in the software industry. In an indicator of just how quickly the recession is hitting the software industry, take a look at this chart:
I also want to pick out one more bit of interesting data out of this post:
Finally, in another extremely bearish sign, only 10% say their
company’s capital budget is increasing for next quarter (2Q) and 26%
say its decreasing – a net 14-pts worse than three months ago.
This reinforces my gut feeling that Software as a Service companies may weather this recession much better than most, as the capital outlays to get them up and running are significantly lower than premise-based solutions. It’ll be interesting to see how companies like SalesForce.com (NYSE: CRM) respond to this.
If you work in the software industry and you DON’T want to lose your job, you should consider spending some time communicating to your elected officials that you want some order restored to the financial markets. Once your customers can get loans to run and expand their businesses again you’re much more likely to start getting more orders. The sooner we can get through to our elected officials to stop drinking Stupid and start regulating like they’re supposed to, the sooner normalcy and productivity can return, the sooner CapEx dollars will start flowing again. A good way to start would be to sign the petition to reverse the Bear Stearns "bailout" and impeach Bush for authorizing it.
