Maintaining Momentum in the Face of Uncertainty

Despite the looming threat of yet another economic meltdown as the world dreads the ripple effects of the growing economic troubles of Europe, the outlook for the IT sector stays positive as consumer spending on IT products remains strong, with a double-digit growth to its belt.  Studies point to the steady demand for smartphones and software purchases across many regions as being the key, with Brazil, Russia, India, and China leading the worldpack.  Being highly-populated regions must have helped pull the numbers up.  

This press release touches on the various aspects of supply chain as was discussed in this week's articles.  At times like these, SPEED and ACCURACY are key factors to maintain momentum.  Manufacturers must react to the trend by responding FAST and responding RIGHT in terms of making their products available.  In the face of uncertainty such as a financial crisis, manufacturing companies must ask themselves an important question: What opportunity lies in front of me in a situation like this?  How should I respond to uncertainty? 

Uncertainty in the market could mean a sink-or-swim decision for a company.  Knowing how strong your market is despite the environmental factors present will shed light on your next course of action.   The principle of inventory management is simple.  Just match demand with the ideal supply.  The How part of it is the tricky one.  Keeping inventory at a level that matches your demand could get complicated, but driving your inventory costs at a minimum has proven to be very effective in driving down overall costs for companies.  Despite the volatility of the market situation, manufacturers must always remember that businesses can manage to stay afloat and even flourish, enabled with the right counter-measures in supply-chain management.

http://www.idc.com/getdoc.jsp?containerId=prUS23300712 

Tech Spending Remains Strong, Despite Economic Risks and Volatility, According to IDC’s Worldwide Black Book

IDC - Press Release 06 Feb 2012 Emerging markets continue to lead the way in tech spending, with BRIC countries showing double-digit growth   FRAMINGHAM, MA, February 6, 2012 – According to the new International Data Corporation (IDC) Worldwide Black Book just released, IT spending increased by 5% at constant currency in 2011, despite the worsening economic situation in Western Europe and volatility in other regions. Emerging markets continued to lead the way, with tech spending in the BRIC countries (Brazil, Russia, India and China) enjoying another year of double-digit growth. Strong demand for mobile devices and software across most regions ensured a positive finish to the year, despite the impact of the hard disk drive (HDD) shortage on PC markets.  In U.S. dollar terms, the IT industry grew by almost 9% in 2011, but year-to-year comparisons could be difficult for U.S.-based IT vendors this year if currency conditions are less favorable. In constant currency, IDC projects another year of 5% growth for worldwide IT spending in 2012. Hardware and software spending are each forecast to increase by 6% (in constant currency), with 4% growth in IT services. Strongest growth in 2011 came from smartphones (+46%), software (+6%) and disk storage systems (+6%). Businesses continued to invest in infrastructure upgrades, along with new software applications and mobile devices (including tablets). These positive trends are expected to continue in 2012, when enterprise spending on network equipment will also accelerate as many organizations invest in network upgrades to cope with the continuing increase in digital information, which will meanwhile ensure another positive year for the storage market. By the end of 2012, the PC industry will also return to positive growth. “There are risks to the outlook for 2012, mainly related to macroeconomic weakness in Europe, where IT spending is still weak,” said Stephen Minton, Vice President of IDC’s Global Technology and Industry Research Organization. “In a downside scenario, things could get much uglier in Europe and have a ripple effect through other regions. But leading indicators in the U.S. have improved in recent months, and emerging markets show no signs of a slowdown yet.”  The macroeconomic crisis in Europe has already had a severe impact on IT spending in that region. Overall IT investment was flat in 2011, with declines in spending on PCs, servers, storage, peripherals and enterprise network equipment. The recovery in Europe will be a long haul, with less than 1% growth this year and 3% in 2013.  “Europe is going to be a long, drawn-out recovery,” said Anna Toncheva, program manager and economist in IDC's Global Technology and Industry Research Organization. “The debt crisis will take a long time to resolve, and there are numerous downside risks which could yet see the unravelling of the European single currency and, in the near term, an escalation of the crisis due to sovereign debt defaults in peripheral Eurozone countries.” In other regions, however, the momentum of 2011 is still evident in recent polls, which show continuing enthusiasm for tech investment amongst businesses and consumers. In the U.S., where IT spending increased by 7% last year, 2012 is likely to bring another year of solid growth (5%) driven by mobile devices, software and network equipment. Japan will see a return to positive growth, after the declines triggered by last year’s tsunami and earthquake disaster. IT spending in Brazil, Russia, India and China will be up by 9%, 11%, 16% and 15%, respectively.  IDC's Worldwide Black Book provides forecasts for IT spending in 54 countries around the world. IT spending forecasts focus on 25 individual market segments across hardware, software, IT services, and telecom services for individual countries in all regions including North America, Latin America, Western Europe, Eastern Europe, Asia/Pacific, the Middle East, and Africa. The Worldwide Black Book Query Tool presents all data in the following exchange rate views: U.S. dollars in constant currency, annual and year-to-date exchange rates, and local currency.  Additional products in this category include the Worldwide Enterprise Black Book, which analyzes annual IT spending in relation to four company size segments based on employee counts. The Worldwide Black Book, Premium Edition, includes cloud spending forecasts, quarterly IT spending forecasts by region, IT vendor market share analysis, macroeconomic indicators, IT/Internet penetration, and CIO survey data. The United States Black Book: State IT Spending by Vertical Market is a quarterly analysis of the status and projected growth of the IT industry in 50 states and across 15 vertical markets. For additional information about this research, or to arrange a one-on-one briefing with Stephen Minton or Anna Toncheva, please contact Sarah Murray at 781-378-2674 or sarahbethmurray@gmail.com. To request information on custom data cuts or subscription services, contact insights@idc.com.  About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For more than 46 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. For more information, please visit www.idc.com, email insights@idc.com, or call 508-872-8200.