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Art Wittmann
Art Wittmann
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Strategy Session: Armchair Economics

Vendors are eyeing the state of the economy and the coming fiscal year with pessimism. So what's a well-intentioned IT planner to do?

My grandmother, a schoolteacher, used to say there were only two periods during the year when she got any "real" teaching done. One was between Labor Day and Thanksgiving, and the other was between New Year's and Easter. The rest of the school year was disrupted by holidays and the anticipation of summer. It seems that's true for enterprise IT too.

Many fiscal years start July 1, which is when IT learns what projects will be funded for the year. CIOs who've lived through a few "now-you-have-it-now-you-don't" budget cycles know it's best to start new projects just as soon as the money is available--accounting can't take back what you've already spent.

The vendors know this too, and begin their product rollouts in earnest about then. The scope and quantity of those rollouts is a good predictor of what vendors think about the state of the economy.

So far, what we've seen from the vendor community indicates a good bit of pessimism. There are lots of reasons for that. At a macro level, the bond market is looking for an economic downturn while the Fed faces upward wage pressures that it would like to quash through interest rate hikes--remember stagflation? It's also an election year and, unless Democrats can snatch defeat from the jaws of victory, there's likely to be a change of management for at least the lower house of Congress--and that means uncertainty. This, of course, business hates.

Art Wittmann is a former editor for InformationWeek. View Full Bio
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