Gartner: The Sky Is Falling

John Paczkowski — Wed, 01 Apr 2009 07:00:46 +0000

Global information technology spending will fare worse in 2009 than it did during the dotcom bust of 2001. That’s the grim news from Gartner (IT), which Tuesday predicted that worldwide IT spending will slip to $3.2 trillion this year from $3.4 trillion in 2008. If that should happen, the drop will be the greatest decline in nearly a decade. “IT organizations worldwide are being asked to trim budgets, and consumers are cutting back on discretionary spending,” said analyst Richard Gordon. “The speed and severity of the response by businesses and consumers alike to these economic circumstances will result in an IT market slowdown in 2009 that will be worse than the 2.1% decline in IT spending in 2001, when the Internet bubble burst.”

No area of technology will be immune to the decline. Hardest hit: the computer hardware sector, which is expected to see spending fall 15 percent to $324.3 billion. Seems even the promise of government stimulus packages won’t be enough to offset this ugly near-term outlook. Said Gordon, “Economic conditions have continued to erode business confidence in all regions. There is a continued general sense of uncertainty in the market and a lack of clarity of actual amount of toxic debt out there. IT organizations will look for ways to shift spending from capital expenditures to operational efficiencies.”

Bernstein Downgrades Amazon, eBay on Macro Concerns

Eric Savitz — Fri, 19 Dec 2008 14:03:22 +0000

Bernstein Research analyst Jeffrey Lindsay this morning cut his ratings on both Amazon.com (AMZN) and eBay (EBAY) to Market Perform from Outperform, noting that the stocks have rallied off their November lows toward his target prices of $50 for Amazon and $16 for eBay. Given the current macro environment, he writes, there is little upside to current 2009 estimates, with increased risk of reduced guidance or under-performance.

For Amazon, he has three major concerns:

Reduced discretionary spending as unemployment and home foreclosures further erode U.S. consumer confidence. He notes that “the vast majority of goods sold by Amazon are discretionary purchases.” He says consumers have “pulled out all of the stops for the holiday season”–have they?–he expects “much more cautious and restrained spending as redundancies and home foreclosures continue as expected through 2009.”

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AllThingsD » discretionary spending

Gartner: The Sky Is Falling

Bernstein Downgrades Amazon, eBay on Macro Concerns