Ovum on trends in IT spending

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Global advisory and consulting firm Ovum, a part of the Datamonitor Group, counts among its clients such blue-chip technology companies as AT&T, BT, Cable & Wireless, Cisco Systems, IBM Corp. and Microsoft Corp. John Madden, the company’s research director, recently spoke to “ITM” about broad trends in technology spending amid the worldwide recession and how technology companies have modified their marketing and pricing strategies.

ITM: How are IT companies reacting to the economic downturn from a marketing standpoint?

Madden: [IT companies are reacting] from a consulting and strategic advice perspective. If [buyers] are having employee reductions or going through merger activity, they’re telling them they can help them through that. They’re saying, “Let us help you ride out the storm.”

IBM for years has talked about global financing and some of its attractive terms and leasing that they can give customers—so [IBM] is talking about that a lot right now. [Hewlett-Packard Co.] is offering a managed application services where customers can talk about specific levels of application availability and support. [There’s] an attempt to make those kinds of services more affordable, where customers are paying based on their application needs instead of a blanket pricing model. Vendors know that some segments of their customer base are clearly hurting. They’re under orders to reduce costs as much as possible.

So vendors are trying to help customers from a strategic and consulting perspective, and also in terms of pricing.

ITM: What new products are emerging as a result of changes in buyer behavior?

Madden: It’s more about pricing and how it’s packaged. There’s a lot more interest in leasing options versus buying assets outright in order to keep capital expenses under control. There’s a large emphasis on consolidation and cost containment. Vendors are saying, “Yes, you need to do cost cutting and containing, but you have to plan for the short and long term.”

We’re also seeing more virtualization and emphasis around security and compliance issues.

ITM: What kinds of new channels or media are IT companies using to attract their buyers?

Madden: They know the power of a combined media strategy that involves online ads, blogs or different social networking and collaboration sites. [IT companies] have always been fairly far ahead compared to other business sectors.

ITM: How are IT marketers changing their use of online media in this economic climate?

Madden: From a product purchasing perspective, there are some interesting deals out [on the Internet]. You get them from either going to home pages directly [or] banner ads. [Consumer vendors are] throwing in free printers, $200 rebates. On the enterprise side, there’s a lot of emphasis on price.

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