How can IT industry survive in the Financial Crisis?

Fact sheet: IT Industry is affected by the Financial Crisis

On Sept 30 2008, Steve Ballmer, CEO of Microsoft spoke at a news conference in Norway “We have a lot of business with the corporate sector as well as with the consumer sector and whatever happens economically will certainly effect itself on Microsoft,” he told Reuters.

“I think one has to anticipate that no company is immune to these issues,” he said,

Meantime, stock price of Apple dropped 40% during 6 weeks. On the other hand, according to the Forrester’s survey(a research company based in USA), nearly 43% company cut down the budget on IT to deal with the financial crisis, and more than 49% IT dept in financial industry has the same planning.

Furthermore, from the majority IT Company’s third quarter Financial Report, we can see the whole industry meet a large decline in sales; it marks that the winter for IT industry coming.

Why financial crisis affect IT industry?

As we know, financial industry is the most important factor in the economy development. When financial organization suffered a great loss, the financial crisis will become credit crisis. It means currency circulation crisis, then it’s very difficult for us to borrow money from bank. Without the support from financial organizations, a large amount of companies will meet a financial shortage and have to cut down the budget.

Secondly, due to the shrinking discretionary spending, people can not figure out the trend of Financial Crisis and no one can say how much it will affect our business and life. The so corporations and individuals keep their pocket tight and wait and see; it is going to affect business investment on IT products consumer spending.

Thirdly, each industry is connected and affected by the economic structure. Since the bankruptcy of banks and financial organizations, how can IT industry be immune from this crisis but ignoring the interactional linkage?

Is there any solution for IT Firms to survive from the financial crisis?

The answer is absolutely yes. Those are “innovation in technology, switch or begin into new business sector” can definitely survive and grow their business, though the financial crisis took all us to a predicament.

Nevertheless, Crisis not only gives us challenge but also Opportunity. Challenge and Opportunity are twins and often appear simultaneously.

Let’s analyze the current situation in IT Industry(for a primer on IT education, Since the shrinking purchase power, most companies would prefer to maintain and repair their IT hardware instead of buying new ones. For the IT service/Repair Firms, they will not decrease but get more business.

However, we can not ignore the crisis and wait passively. We have to expand our business arrange and survive from it.

For example, IT firms can invest and start new business in IT industry, such as computer application service, computer maintenance data backup/recovery and etc.

Along with the proliferation of computers in business, the demand for various incidental IT services is increasing. Data recovery service is one of these incidental services and the most promising one.

Why Data Recovery is a most promising service for IT firms?

Firstly, Data loss not only means a large sum of cost wasting for companies. It also hampers routines and slows down development of enterprise. So if there is any way to rescue the data and avoid the loss, all companies are willing to accept and buy the service.

Secondly, IT firms have one unique advantage to start Data Recovery Service. Mostly, Data loss is always companied by computer crash. When Computer Crash happened, most clients wouldn’t realize that they need data recovery service. They prefer to call IT service companies to repair their computer. So if IT firms can provide data recovery service while clients need it, it is very favorable for both clients and IT firms.

Thirdly, data recovery is new and it has bright prospective future. If you heard of the JBL ad on airplane and know JBL starts providing Data Recovery Service, how will you react on that?

So for most IT firms, Data Recovery Service can be new revenue.