Has the BRIC bull become the BRIC bear? And what's that mean for IT?
There's a somewhat alarming story on Dow Jones' MarketWatch this morning explaining that the world's most prominent emerging economies -- Brazil, Russia, India and China, or BRIC for short -- are beginning to fade.
Replacing them? Poland, Turkey, Peru, Colombia, Indonesia, the Philippines, Ghana and Uganda.
(That's "PUGPICTP" or "PIGPUTPC" at best, which sounds mostly like when a ball joint fails in your car's suspension system. They've also been referred to as "New Tigers," though that just makes Michael Flatley look bad.)
MarketWatch's story focuses on the investor angle, naturally, but I can't help but wonder about the IT implications. You see, the BRIC nations -- China and India, especially -- have been technology's big growth area. At ZDNet, we've called BRIC "the future of enterprise IT growth," and tech's biggest players -- IBM, Cisco, HP, Lenovo, Dell -- have all invested heavily in the nations as their respective middle classes emerge, demanding services like banking and transport and retail and all the things citizens of developed nations enjoy.
As you might expect, these services require considerable technological infrastructure. So there's plenty of money to be made, and enterprise giants see emerging economies as a way to add incremental revenue and stoke the fires of growth, pleasing shareholders and bean-counters alike.
Except there's not, at least by the current outlook. Last night, Dell revealed on a conference call that it was seeing a worldwide slowdown in spending. Asia-Pacific-Japan head Amit Medha admitted that the value of the Indian rupee is likely to hurt its business. Dell's still "cautiously optimistic" about the nation -- Cisco said the same earlier this month -- but that's still a stark difference from last year's sure thing.
To be clear, these companies are still seeing revenue growth in BRIC nations -- just not quite the runaway success they enjoyed in previous quarters. The question is whether this is a bump in the road or a longer-term problem. It's hard to believe the PUGPICTP group can compensate for the BRIC slowdown; aside from the major difference in scale -- India's population: 1.21 billion; Indonesia: 238 million -- they all remain interconnected economically. (It's no longer a positive thing, for example, that Poland is obligated to join the Euro zone in the next few years.)
I'm no economist, though, so take my dot-connecting with a grain of salt. What you should wonder, though, is whether the IT-demanding middle classes in emerging economies are decoupled enough from developed nations to keep tech's best companies on trajectory. In a globalized economy, are there any places left to escape?