As if the economy isn’t tough enough on MSPs and other service providers, now U.S. government gridlock is further threatening IT spending, or so finds CompTIA, an organization that represents channel partners of all shapes and sizes.
CompTIA sees demand for IT services as flat in the fourth quarter, but adds that its partners are now more fearful of the impact gridlock may have to make things worse.
Still, the gridlock is an unknown issue, and the non-profit sees growth, albeit a paltry 2 percent over the next two quarters.
“Up until this point, IT industry executives viewed the economy as progressing steadily towards stability and modest growth,” said Elizabeth Hyman, vice president, public advocacy, CompTIA. “A portion of the concern can certainly be attributed to the impasse in Washington and the shutdown of the federal government.”
CompTIA isn’t alone in its fears. In an investor meeting today, Wal-Mart CEO Mike Duke called the global economy “tough” and “unpredictable’, adding that Wal-Mart customers are fearful of the impact of the current U.S. government shutdown.
For IT firms, government gridlock hits close to home as the federal government is a huge consumer of IT services.
“One in four IT companies does regular business with some branch of government,” said Hyman. “The federal government alone purchases more than $80 billion in technology each year, so the effect of a shutdown directly impacts the bottom line of these companies.”
Today’s shutdown and possible debt ceiling debacle is a symptom of intense partisanship, partisanship that could impact the workings of the U.S. government for years to come.
And this makes planning difficult, if not impossible.
“There’s also the potential for a longer-term impact if federal departments and agencies are unable to plan for and allocate current and future IT resources,” she added. “The technology companies and workers they’re doing business with will be in limbo, too. There will be hesitancy to hire people.”
The economy remains another concern as it has failed to pick up real steam, and consumer and business confidence is stalled. In fact almost half of the IT execs CompTIA talked to are worried that customers are reluctant to spend on IT and increasingly price sensitive.
“Realistically, after a prolonged period of economic sluggishness, it will take a period of sustained economic strength for customers to fully regain their confidence in longer-term capital or operational investments,” said Tim Herbert, vice president of research and market intelligence at CompTIA.
Edited by
Alisen Downey
