Europe Lags behind US in Tech Spending

The rate of recovery in tech spending in the US is going to be twice the rate of Western and Central Europe next year as America steps out of recession quicker.

Europe has been experiencing a deep recession and with the problems originating in the US those factors have pointed to the recovery starting on the other side of the Atlantic first before spreading to the UK and the rest of Europe.

According to Forrester research the US will see a 8% increase in technology purchases next year compared to 4% in Western and Central Europe with €297bn being spent this year in Europe with the major countries all seeing drops ranging for IT goods and services from 12% here in Britain to 3% in France and Germany in 2009.

In the Forrester report, European IT market outlook 2009 to 2010, the analyst Andrew Barels, said that the market for IT goods and services would decline in Europe by 6.3% this year and would be slow to recover: "In both regards it will lag behind the US tech market, which will have a smaller drop in 2009 and stronger growth in 2010."

"The main reason? The European economic recession has turned ouyt to be deeper than the US recession, with Europe's downturn starting later and probably lasting into 2010 . All categories of IT purchases will be down, with computer equipment and communications equipment being especially weak," he stated in the report.

There have already been sings that the US economy has stablised with plenty of CEOs and financial officers making that call in statements accompanying recent financial results. But in Europe only Germany and France have officially recently come out of recession with the UK still lagging behind.

1,80,000 IT Employees may lose jobs

Washington: As many as 180,000 employees in IT and related areas will become jobless this year if the layoff announcements by companies are to maintain the current pace."At the current pace, the year-end total could reach 180,000, which would be the largest annual total since 2003, when technology firms announced 228,325 job cuts," says a report by Challenger, Gray & Christmas, a Chicago-based global consulting firm which tracks job-cut announcements.

Telecommunications, electronics and computer industry companies had cut 140,422 jobs through October 31 this year, says the report, adding that 69,654 tech-sector jobs had been cut in the third quarter of the year alone. The report did not include major layoffs announced since October 31 such as the 5,000 to 6,000 job cuts at Sun Microsystems."

The tech sector is simply the latest victim in this downturn that began last year with the collapse of the housing market, and quickly spread to the financial markets," chief executive John Challenger said in a statement. "Businesses and consumers have slashed their spending and no industry is immune," he added.

The 180,000 job cuts in the tech sector would be the most since 2003 but would still be far fewer than the 695,581 jobs lost in 2001, with the bursting of the dot-com bubble. In 2007, a total of 107,295 tech-sector jobs were cut.

Techies take to Restructuring Infrastructure in Downturn

Bangalore: The recession gaining ground, majority of technology executives in Asia Pacific (APAC) expect to exit the economic downturn by restructuring the infrastructures to make it cost-effective, optimized and efficient. As per a study, many of them are also speculating to move away from mainframes due to the high cost associated with mainframe maintenance and licensing.

Executives from across the APAC region indicate that they are either planning or considering the projects like server and storage consolidation, with 62 percent of techies opting for it. The other projects include virtualization, automation and application modernization.

The study conducted by software giant Hewlett Packard finds that 48 percent of APAC respondents view the current economic climate as an opportunity to streamline their technology environments.Organizations indicate they plan to pay for these projects using a combination of strategies, primarily cash on hand (62 percent) followed by financing (23 percent).

Apart from restructuring the infrastructure, 52 percent of techies are also speculating on outsourcing as an attractive solution. The decision to outsource is influenced by how cost-effective it will be, the quality of service and solutions, the increased flexibility and the manageability and efficiency it offers. The survey was conducted by PSB Research which was commissioned by HP. The survey was included 490 business and technology executives like CEOs, Chairmen, Presidents or Chief Financial Officers, and Vice Presidents and Directors of Finance.