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Crouching Tiger, Hidden Dragon

Crouching Tiger, Hidden Dragon

The long lasting honeymoon of the IT sector is over�at last. The impact seems to be all around. US economy slowdown, crashing NASDAQ, monumental layoffs, all are taking their toll. We do not know where the economy is heading. The experts say that things will get worse before getting better.

Many market surveys have revealed that the Chief Information Officers (CIOs) in USA are in the process of re-evaluating their IT spending plans. They are also looking at lower rates for IT products and services in the market.

This is bad news for the Asian countries, which have built their economies on the skyrocketing demand for hardware and software. While countries like China, Taiwan and some ASEAN countries made a fortune in hardware exports, India a late, latecomer built strong dependence on software exports for it�s economic survival in the last decade.

How will the GIS industry get affected?

In various studies it has been revealed that the top three areas that are most likely to be cut if the CIOs had to reduce spending are: consulting, wireless initiatives and Windows 2000 upgrade on the desktop. On the other hand, the top three areas that are least likely to be cut in the slowdown are: customer service applications, network equipment and e-commerce initiatives. Database software comes next.

What does it mean? It means that the new technology applications like location based services (LBS), which are yet to get consolidated in the marketplace, are going to be on hold. But customer critical applications will be still in demand. The mantra for survival of GIS in this doom time is focussed more and more on the customer and less on the hype.

On the positive side, the US slowdown may also bring some smile on customer�s faces too. We may see the US technology majors getting aggressive on the Asian market, which may result in lower product prices. India and China, the two biggest markets in Asia, if properly targeted, may remain may provide enough feed for GIS companies, to weather the slowdown.

This is also the time when the GIS services companies, largely based in India will start looking at the smaller and lesser explored and till now lesser lucrative markets like South and South East Asia, Japan, Australia and even Africa. Unless they reduce their dependency on a single customer, the US, they can�t hope to become a universal in trading and will remain vulnerable to changing winds.

Happy pouncing!