by CIO Staff

Wall Street: IT Growth in Low Gear

News
Oct 26, 20042 mins
Careers

Today’s New York Times writes about a technology recovery of apparently “diminished expectations,” pointing to the satisfied—or, at least, relieved—reaction on Wall Street to the pretty good profit reports that have come recently from IBM, Microsoft, eBay, Google and Amazon.com.

The article, A Technology Recovery in Post-Exuberant Times, points to a long horizon of pretty good, but not great, profits for the technology sector. That’s partly an unsurprising evolution of predictable economic dynamics—namely, the maturing of an industry. But, more unique to this situation, the article also attributes the slow growth to the low-cost computing revolution. Because of the steady improvement of technology, says the Times, “companies can do more with less—typically by using smaller building blocks of hardware and software.” Will we ever hear the end of more-with-less? If your boss is into that, you may hear a push for the smaller building blocks.

On a brighter note, Steven Milunovich, an analyst at Merrill Lynch, told the Times that the low-cost technology shift means that bargaining power (and consequently profit) swings from technology suppliers to technology users. “So from an investors’ perspective,” he said, “it may be smarter to look for companies that are using technology for competitive advantage.” Here’s your angle! You want to be that company, don’t you? Your CEO wants to lead the company that investors love, right? You can’t skimp on doing IT right.

(For more on using IT for competitive advantage, see the CIO Research Report Optimizing Business Performance: Using IT for Competitive Advantage. It shares the findings of a study CIO magazine conducted with PRTM, and The InterUnity Group. Oh, and don’t miss Part II or Part III of the report!)

(Access to The New York Times online requires registration.)