So, what does IT think about the slowdown?
You can sum up CIO sentiment on the economic slowdown in two words: Why panic?
That's the basic message of the results from a monthly survey of 150 to 200 chief information officers conducted by Morgan Stanley.
To be sure, the big IT shops are closely monitoring the current situation just in case the slowdown slips into recession or worse. But at worst, it's watch and wait.
That's a refreshing antidote to the stuff and nonsense that passes for conventional wisdom these days. Asked whether the combination of a slowing economy and a stock market decline has forced IT managers to reevaluate their spending plans, 74 percent of the respondents are holding steady. (One percent is actually planning to spend more.)
After last year's spending spree, courtesy of the Y2K and dot-com mania, only a sap would be willing to predict a repeat performance for 2001. It was plain that the next 12 months would compare poorly, especially after factoring in the aftereffects of Crazy Al's six interest-rate tightenings, not to mention a presidential changing of the guard.
And so it is that the drumbeat of news about more layoffs and slumping stock prices has fostered the more general atmosphere of doom and gloom. Even Cisco, once believed impregnable, is feeling the pinch.
Connecting the dots, the talking heads jabbering away on the networks naturally conclude that suppliers of information technology products and services are in for a prolonged period of major pain. Yet you just don't find the same sense of panic, let alone impending catastrophe, among the biggest IT purchasers.
Maybe that's not such a mystery when you consider that high technology has become so key to the success of Corporate America.
Chuck Phillips of Morgan Stanley recently pointed out that General Electric CEO Jack Welch has gone on record saying he would love to see his company's rivals take the axe to their IT budgets. As for Welch, he says GE plans to keep investing, expressing a point of view that elevates technology to the level of strategic thinking within the corporation.
Neutron Jack is spot-on.
Not to be a Pollyanna; we're only a couple of months into the year, and the economy could always head south with a vengeance. But my guess is that any CIOs cutting back on purchases of storage management or security software would face a lot of heat when the economy perks up, it's back to business and their systems fail to make the grade.
That's quite different from upgrading a huge number of PCs to Windows 2000. Indeed, upgrades can be put on hold and a corporation can continue to run quite nicely, thank you. That's not likely to be music to the ears of the hardworking folks at Microsoft, but the Morgan Stanley report found that 35 percent of the respondents would do just that if forced to reduce spending. (The only other areas that would get shorter shrift were wireless, new custom development and consulting.)
In the end, this is the difference between tactics and strategy. And for the most part, IT managers are taking a far more nuanced and sober look at the news than a lot of the rest of us. I think it's revealing that only 14 percent of the CIOs polled plan to reduce IT head count this year.
They understand that the companies that stick it out will be in postposition when the race resumes in earnest. And whether that's two or three quarters away, they know that day will inevitably come.