Editor’s Note: This is one of a series of stories examining the current economic downturn and how it affects the wireless industry. For more on this topic, visit RCRWireless.com/EconomicDownturn.
As Washington, D.C., continues its efforts to bailout Wall Street and stabilize the economy, analysts expect wireless spending in the enterprise market to continue.
However, a recent ChangeWave survey suggests that spending by companies on information technology as a whole will decrease in the last quarter of the year and continue into 2009. In its Sept. 1 survey, ChangeWave predicted that “the U.S. economic downturn is far from over. In fact, findings foreshadow even tougher times ahead.”
Need and cost
The market for enterprise wireless spending will withstand the economic downturn because companies rely on the technology to increase productivity for its workers and maintain contact with its customers, analysts said. However, businesses may try to save money by reducing monthly bills for wireless services.
Stephen Drake, director of mobile enterprise for the research firm IDC, said the enterprise wireless market is in a good position to weather the loss in the market because businesses have already invested in the infrastructure to provide wireless devices and applications to their employees.
“Businesses are not going into a green field,” Drake said. “The corporate buy-in has already been done in wireless.”
Device rollouts and new applications will continue to be deployed to businesses to ensure employee efficiency and customer outreach, Drake said.
“In this economic climate, businesses have to make sure they reach out to the customer and mobile has that advantage,” he said.
Mirabel Lopez, founder of Lopez Research, sees the enterprise market in two ways – need and cost.
Companies will continue to add wireless devices and applications to their business processes. She said some companies may not be as aggressive as planned because of the economic climate.
“The companies I have talked to are moving forward with mobility, but they are trying to ratchet down their monthly cost,” she said.
Lopez said companies will look to cut costs by examining data and voice plans and cutting back on roaming charges.
“Businesses will continue to mobilize their workforce, but without spending an arm and a leg for it,” she said.
The economic environment is a factor in how companies spend on technology, but Forrester Research’s Alaa Saayed said it’s too early to tell how the current economic state will impact spending.
“I think we have to take a wait-and-see approach,” he said.
However, Saayed agrees with Drake and Lopez that businesses will continue to be drawn to wireless technology.
“We don’t think it would negatively affect the demand for this type of technology,” he said.
In August, ChangeWave surveyed I.T. professionals to gauge third- and fourth-quarter spending by corporations and found a downward trend it said it has not seen in seven years.
For Q3, 30% of respondents said their company had spent less on technology than planned, according to the survey. Just 12% said they spent more than planned.
The trend continues with 29% expecting to decrease technology spending in the fourth quarter, and spending will increase for 13%, according to the survey.
“You have to go back to the last recession (August 2001) to find a ChangeWave survey projecting an I.T. spending downturn this big,” the survey states.
The survey cited rising energy costs and uncertainty over the upcoming presidential election. When asked when spending on technology might pick up in their company, 39% said not until the second quarter of 2009 or later.
