Breaking News: Internode now offering 1TB broadband

ZDNet / Market Slowdown / Story

It's a slowdown, not IT Armageddon

By Byron Kaye, ZDNet News on January 11th, 2001

Topics

market slowdown

The global IT industry has entered the new year in slowdown mode, but this is only a sign of good health, says a senior industry analyst.

William Ehmcke, local MD for analyst firm META Group, agrees with a sentiment being felt across the globe that the tech market has generally slowed. Stocks are down, sales are disappointing and growth is plateauing. But this is no cause for panic, says Ehmcke. There is a difference between the above situation and the end of an era.

Ehmcke believes the present situation represents a perfect time for companies to plan ahead. They've bought the gear, now how are they going to use it?

-Over the last year, people have bought a lot of Internet stuff," Ehmcke says. -They've had to retool. But now there is a cooling down."

He attributes a year of massive industry growth, 2000, to various environmental deadlines - the so-called Y2K bug, the infusion of the GST, amongst others.

Factors such as these drove a -general renovation of back office systems" in late 1999 and 2000. For many corporates the world over, the issue of the year was upgrading or transplanting ERP systems in time. In time for midnight, December 31, 1999. In time for 9am, July 1, 2000. Hence the big spend. Hence growth.

But that spend is over. There will always be a need for software upgrades and new improved apps, but entire systems do not become obsolete that quickly, says Ehmcke. And those systems have only just been put in.

In keeping with the pattern, Ehmcke believes a lingering sharemarket disfavour still being endured by much of the hi-tech sector is also a natural reaction to a huge previous year. Well, the first four months it, anyway.

The main reason the market became so inflated at the time - before April 17 - was that the investors let themselves get caught up in global wave of sinking cash into shares without knowing what the companies did or how much money they were likely to make. Yearly fiscals later in the year did little to ease investor disappointment, private funding became more stringent, companies decided it might be a good idea to revise their strategies, and here we are. Expect some positive yearly reports later in the year, locally and overseas, and optimism in the tech sector of the sharemarket could be reality in Q4 2001, says Ehmcke.

To what extent will the Australian industry be affected by the slowdown in the US?

To the same extent, says Ehmcke. But in proportion. As he pointed out, a small dip in growth in the US would amount to a downturn locally of around 50 percent. Not pretty.

But also not how it works. Markets move, to some degree, in proportion to the economy of the country. And there is a local economy, not just a US-dominated global economy. If the Australian IT market slows a -little bit", that means a little bit in Australian, not US, proportions.

Likewise, a US slowdown may look horrific to us, but they're fifteen times - 1500 percent - the size of us to begin with. A billion to them hurts like a million does to us. A million to them, a thousand to us. In other words, they can take it. And we can take it too.

Talkback

I really did enjoy this one.
Nice article.

Zoritsa MarinkovichZoritsa Marinkovich January 12th, 2001
Report offensive content Reply (0) (0)
Add your opinion

In order to post a comment, you need to be registered. (Sign In or register below)

Post your comment

Resource Centre Useful content from our premier sponsors

ZDNet Australia Live

A user from Sydney measured 1704kbps @ Broadband Speedtest.

7 minutes ago, Click here to find out how fast your internet speed is.

Alliances, Referrals, Kickbacks, Reselling ââ¬â Whereââ¬â¢s the independent advice in this? http://tinyurl.com/37668uq

ZDNET: Alliances, Referrals, Kickbacks, Reselling ââ¬â Whereââ¬â¢s the independent advice in this? http://zd.net/9oglyr

ZDNet: Alliances, Referrals, Kickbacks, Reselling ââ¬â Whereââ¬â¢s the independent advice in ... http://zd.net/9oglyr via themacoylife.tk

I did have one of these in my classroom when I was growing up (back in the 80s). I used one of these in the late '80s at Uni - it wa...

26 minutes ago by dlinker on Microsoft MultiPoint Server 2010

Windsor's foot firmly in Labor's NBN camp: ... on a revision to its widely used... http://bit.ly/9tGvo3 Bill Kutik... http://bit.ly/aAerv1

2-AutoBlog* The tech keeping Plastiki afloat - ZDNet Asia. http://bit.ly/9jAMuG

#Google reaches Buzz settlement: [#zdnet.com.au] as I've previously wr... http://bit.ly/anw9d3 #Software UN #exec:... http://dlvr.it/4mkfx

Google reaches Buzz settlement: A price has been put on Google's mistakes surrounding the launch of Google Buzz: U... http://bit.ly/c5CxnC

Mobile Application World를 이끄는 글로벌 리더들 CVISION에 모인다. http://is.gd/eWU55

RT @stilgherrian: New "Patch Monday" podcast at @zdnetaustralia: "Parliament's poor porn probe exposed" inc @mspecht http://bit.ly/9cHZrY

A fantastic SEO for Firefox Plugin to extend your SEO/PPC efforts beyond the first step http://bit.ly/9qu5OJ

Microsoft MultiPoint Server 2010 - ZDNet Australia: All over the world, schools are facing the same challenge: bri... http://bit.ly/cKnC8w

Microsoft MultiPoint Server 2010 - ZDNet Australia: All over the world, schools are facing the same challenge: bri... http://bit.ly/aDXHyr

Bill Kutik on HR Collaboration Options: By Oliver Marks | September 5, 2010, 6:02pm PDT A recording of a Skype con... http://bit.ly/aMVWqP

@AndrewPalozzo There's TwistedWire and a new one coming soon, hopefully. RSS feeds all on the ZDNet site.

CIOs speak: is in-house IT dying? - ZDNet Australia http://bit.ly/bQVKrP

Google reaches Buzz settlement http://zdnet.com.au/339305800/

Windsor's foot firmly in Labor's NBN camp http://zdnet.com.au/339305806/

RT @BPMcloud: CIOs speak: is in-house IT dying? - ZDNet Australia http://bit.ly/bQVKrP

@joshgnosis Sweet thanks!! Do ZDNet do any other podcast I should be listening too? I love local Aus Tech Podcast

I'm pretty sure what the gov has done there is an invasion of privacy and illegal .. akin to phone tapping really ..

1 hour ago by matiu on Porn jokes are great, data retention is not

@AndrewPalozzo This one should be it. :) http://www.zdnet.com.au/blogs/patch-monday/rss.xml

SD revamp to triple flash card speeds in 2012: The SD Card Association is working on a revision to its widely used... http://bit.ly/9tGvo3

Bill Kutik on HR Collaboration Options: A recording of a Skype conversation with Bill Kutik, the eminent independe... http://bit.ly/dBVJBI

Bill Kutik on HR Collaboration Options: Buying a toolkit doesn't make you a master mechanic, as I've previously wr... http://bit.ly/anw9d3

RT @stilgherrian: New "Patch Monday" podcast at @zdnetaustralia: "Parliament's poor porn probe exposed" inc @mspecht http://bit.ly/9cHZrY

Not much point in siding with the mad monk when you consider the senate will be controlled by the Greens. Which one of all those imaginar...

2 hours ago by grump3 on No broadband in Katter country

Hi Krishg,
We'll certainly look into that.

-Luke Hopewell
Journalist | ZDNet Australia

2 hours ago by LHopewell on CIOs speak: is in-house IT dying?

Interesting options for innovation with start ups http://zdnet.com.au/339305787/ - thanks @jensbutler

Oracle picking up HP ex-CEO?: Mark Hurd, who resigned as Hewlett Packard's chief executive officer last month afte... http://bit.ly/9w5RNp

RT: @zdnetaustralia: Like all sheep that follow a flock, Internode is now offering 1TB broadband http://bit.ly/bQJ8rl

CIOs speak: is in-house IT dying? http://bit.ly/9VfrKa

Hi.. It would be interesting to see the similar CIO feedback on Cloud computing from Australian CIOs.. Kindly reply if it was done...

3 hours ago by krishg on CIOs speak: is in-house IT dying?

Woohoo. Can finally opt out of getting useless phone books. http://bit.ly/afCYZS

New Sensis site stops directory deliveries - Business - News - http://bit.ly/bm6pne

The National Broadband Network is not a waste of money, the NBN is design to bring the following: At the moment, people are paying at le...

6 hours ago by myvistahosting.com.au on Coalition to sell off NBN

"NBN Co will have no competitive reason to provide competitive products for retail providers," - what competitive policy did Tels...

7 hours ago by Rex Alfie on Conroy ignored industry on NBN: Slattery

ZDNet Patch Monday Podcast - BYO computers: cloud security risk?: http://bit.ly/9um1Kf

Dear Sir .
I'm from Jordan ,how can i get help to begin waste idustry ,rotating to helpfull peaple in Jordan .

16 hours ago by chiefeditor on Australia's giant e-waste recycling centre: Photos

Keep your damned religion out of this.

17 hours ago by Hyperion on No broadband in Katter country

Amongst the tirade of debate from the industry and political rhetoric coming about this topic it is difficult to establish who is being o...

19 hours ago by cut the bs on Conroy ignored industry on NBN: Slattery

Really, Mr. Linton has a very good point, ordinary Australian Folks Hardware in PC and most of Laptop in the Down_Under corner are no mat...

22 hours ago by NBN Money Pit on 1Gbps NBN fans 'just plain stupid': Linton

Anyone care to explain why I get wildly different line speed results from two different browsers taken within minutes of each other. Note...

1 day ago by Richarmster on Broadband Speedtest

RT @lisadawley: A new toolkit for the new entrepreneur http://zdnet.com.au/339305787/

Samsung's iPad rival set for Christmas http://zdnet.com.au/339305780/

My ADSL2+ modem-router is not IPV6 capable. I suspect 90% of the world's home internet users are in the same boat. I was shocked to...

1 day ago by Yoda7 on The internet is full, what now?

It's not clear who the staff who resigned were. Were they end users or IT staff.

1 day ago by AnanthaP on Indian admins love Linux, stuck on Windows

NBN key to open government: Lundy http://bit.ly/bLXpJF

Well. Just dont buy the phone after 30 sep unless the problems has been fixed. Simple as that.

1 day ago by Vaughan H on Free cases for first Aussie iPhone 4 owners

#NBN... not so back of the envelope. http://www.zdnet.com.au/43bn-nbn-not-so-back-of-the-envelope-339302911.htm #ausvotes

/.をさらっていて見つけた。おもしろいかも。http://www.zdnet.com.au/hackers-accidentally-give-microsoft-their-code-339305548.htm

http://fb.me/HExR6QZn

A new toolkit for the new entrepreneur - bootstrappr - Blogs http://t.co/jqZlAS0

Hackers accidentally give Microsoft their code - Security - News http://bit.ly/a28lVL

This story has been liked 5 times in the last 24 hours!

The internet is full, what now? http://bit.ly/cwmFyf

Apple unveils revamped iPod Touch http://zdnet.com.au/22512823v/

RT @Thombo84: Hacker senden versehentlich Schadcode an MS http://tinyurl.com/2fst5fo

"ANZ: Apple the place to be for security Business News" http://bit.ly/b52JtI

41000 de laptop-uri toshiba cu probleme Toshiba http://bit.ly/aAr9a6 (bine ca au fabrica in china) :P

New Sensis site stops directory deliveries: Sensis has this week given Aussies the ability to opt-out of receiving... http://bit.ly/cchUBK

"Porn jokes are great, data retention is not" - ZDNet http://tinyurl.com/2auvs7a #ozlog #openinternet

'Hurt Locker' pirates get subpoenaed - ZDNet Australia http://bit.ly/b2NEBk

This story has been liked 5 times in the last 24 hours!

This story has been liked 5 times in the last 24 hours!

Keep up with ZDNet Australia

LinkedinLinkedin Join our network

RSS FeedsRSS Feeds Subscribe now

NewslettersNewsletters Subscribe today

TwitterTwitter Follow us

Sponsored resources