Since the start of the year, it's been reassuring to see many storage suppliers continue to do well despite macroeconomic factors signaling recession elsewhere. You could almost say that from the IT perspective, it's been easy to deny there's any downturn at all -- at least when it comes to the big picture.
But the wolf may be knocking on the door of the storage segment.
"We continue to assume year-over-year deceleration in U.S. IT spending in 2008 given the state of multiple economic indicators," writes Tom Curlin of RBC in a note today. "As we have stated previously, the degree of deceleration will be a function of the direction and timing of Federal Reserve policy. Unfortunately, the Feds recent maneuvers appear to be too late to prevent a recession."
Curlin sees many signs of imminent recession, in spite of stable spending in IT. Continuing drops in consumer spending, the credit crunch, and creeping profit reductions in U.S. businesses are signals that IT firms enjoying stability now will likely be affected as well. Forebodingly, Curlin notes that semiconductor bookings and billings, usually a gauge of ongoing product development, "continue to decelerate."
Companies will no doubt have plenty of strategies for addressing the imminent crunch. VMware's announcement of a $100 million investment in India, for instance, could signal one way firms will approach the downturn.