Oct 6, 2008

Q4: 2008 IT Spending Outlook (ISRAEL)

STKI's 2008-Q3 Israel IT spending survey found the following:

1. Spending during the first half of 2008 held up against original budgets (total growth of 2% to 3%). Product IT vendors (hardware and software), which are usually sold in foreign currencies, report an increase of 10% to 20% in dollar value over same time last year. But given the low dollar-sheqel exchange rate, vendors actually sold the same or up to 5% less. Services IT vendors reported growth in revenues of about 2% to 5% .

2. Q3 IT spending was much lower than expected and Q4 looks the same.

3. Forecasts for Q4 2008 and H12009 look pessimistic. Total IT spending will be reduced by about 10%.

4. The "light" in the other side of the tunnel?

projects in government, utilities, defence and regulation for financial services

5. What do I recommend to IT vendors?

* products/services that will help your clients save money
* structure deals to help cash flow for your clients
* sharpen value proposition to short term ROIs
* expect sales cycles to lenghten

picture by Marc Phares/Epic Studios

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