Recently, research firm Gartner noted that worldwide spending on information technology will increase by 5 percent in 2005. That was welcome news to those in the high-tech community who are waiting for some good news to come down the pike.
Sure, there has been anecdotal evidence that sales are picking up. But Garner's prediction made those stories seem much more reasonable, true even, especially for those doing business in parts of the country where the economy has been slower to pick up.
What is likely to be a key driver of such growth are replacement purchases. The three-to-five-year cycle during which time companies replace older equipment is approaching its end. Bear in mind that five years ago many companies were flush with money due to the Internet boom, and celebrated that cash heartiness by buying new computer equipment. If those companies were fortunate, they: A) are still in business and B) bought quality equipment that, too, is still in service. But even the best equipment needs updating. According to recent Gartner figures, worldwide PC shipments totaled 43 million units in the second quarter of this year, with replacement purchases leading the charge. Of that figure, 14 million units were considered U.S. shipments, and that figure is up 11.4% from the year earlier period.
Of course, some companies will recognize the need to replace or update more readily than others. However, you can never be sure exactly how customers will react: Some reports suggest small businesses, typically wary of making large purchases, are spending more freely now in anticipation of business picking up. And large businesses, which generally have a bigger bank book than their smaller counterparts, seem to be more cautious than anticipated because they are trying desperately to stay within budget numbers.
Many of you are in the position of needing new equipment. You've waited, and it looks now as though your ship may come in. As they say, (well, sort of) "As the economy goes, so goes the data center."