Posted by: Greg Ness | November 3, 2008

Recession-induced Hype?

Last week I blogged about Chambers comments on innovation being the key to emerging from a recession.  I just read his Harvard Business Review interview about Cisco and noted:

 

“Today, a market transition toward consumer-driven technology is spurring Cisco to focus on developing seamless IP support for data, voice, and video across the 14 billion devices Cisco expects will connect to the internet by 2010.” – Harvard Business Review, November 2008

 

Infoblox recently hosted a series of customer Advisory Board Meetings on the East Coast of the US and in Northern Europe.  The attendees represented a number of the biggest companies in the world – we’re talking global, household names.  Included along with discussions of large-scale deployments of DNS, DHCP, IPAM and other core network services, the group discussed the impacts (or expected impacts) of the current economic woes on IT spending and project priorities. 

 

What was most interesting was the fact that very few organizations reported plans to make significant changes in their IT expenditures for the coming fiscal year.  Sure, a few (notably government organizations) said that spending was frozen.  And most organizations reported that projects will take some additional justification, e.g. an end-of-lease or end-of-depreciation event will not in and of itself justify a new capital expenditure. 

 

Several said that IT spending growth would slow from perhaps 5-7% YoY to 3-5% YoY growth.  But a reduction in growth is far short of a net reduction in spending:  The vast majority of companies said that they would not put off major IT projects, including infrastructure projects.  And a few in stressed industries (like financial services) said that the current environment created great opportunities to grab share from competitors by investing in, among other things, IT systems (applications and infrastructure) that provide competitive advantage. 

 

It was a stark contrast to the gloom and doom resonating in the news (or even from network equipment vendors) yet from the people who manage IT for global enterprise.  As Cisco prepares to issue its guidance for coming quarters we may see some short term overreaction to any pause; yet on a medium to long term footing THINGS MAY ACTUALLY BE BETTER THAN WE THINK… that is, unless fear takes control of our outlook and we create a self-fulfilling prophesy.

 

I think infrastructure innovation will be the key to enterprises emerging from a wobbly economic forecast.  Isn’t it time for Infrastructure 2.0?


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  1. […] Greg Ness from Infoblox writes a blog post on this topic. […]


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