Last Updated Oct 29, 2008 6:52 PM EDT
There are certain sectors of technology that could benefit from corporate belt tightening, says consultancy Frost & Sullivan's report, "ICT Opportunities in an Economic Downturn". The downturn could also result in a number of mergers and acquisitions as the industry consolidates.
"In particular, ICT solutions that shift costs from a capital to variable component, focus on productivity increases and cost reduction, and support organisational restructuring and acquisitions are likely to see growing demand," says Andrew Milroy, ICT director at Frost & Sullivan.
Here are some sectors that could do well from a downturn:
- Sustainable investments -- virtualisation, thin clients, power consumption modelling, videoconferencing. These may attract more business as companies look to both cut costs and improve their environmental performance.
- Outsourcing, managed and hosted services. Software as a Service (SSaS) lowers in-house costs and can be used for a range of services.
- Self-service systems such as mobile phone transactions, legal or HR-related paperwork, ebilling, online banking.
- Some managed services, including network services, leasing, and managed handsets.
- Outsourcing -- despite offshore outsourcing providers' reliance the financial sector, they are likely to benefit as companies seek to lower costs. A report by consultancy McKinsey predicts a rise in remote infrastructure management (managing servers and IT hardware from afar), which looks set to earn offshoring providers some $7bn this year. But contractual terms are likely to become more flexible.
- Improved data management -- business intelligence organisations look set to benefit from the greater need for compliance and transparency of reporting, while CRM specialists could thrive as companies seek to add value.