Well, I guess we can all relax and start raising prices now. David Blake, president and CEO of IT outsourcing advisory firm UpperEdge, says IT buyers are spending money again after the recession, and says March 25, 2011 was the official end of the buyer’s market.
He didn’t say what hour during the day the market turned, or in what time zone, but I expect that awaits further analysis. In any case, it’s a great gimmick to call attention to what he calls the unleashing of pent-up demand from corporate customers for IT products and services. He cites strong recent results from a services provider (Accenture) and a software giant (Oracle), as well as “the emboldened approach we see from sellers of technology in our own sourcing engagements.” Among the effects Blake predicts: That vendors will look to “maximize revenue and margins (as) their focus and sole approach” and that they’ll push for fewer contract limits on rate increases.
A few points:
This is indeed encouraging news, at least for the tech sector, which seems to be recovering faster and more strongly than other parts of the economy;
Calling an arbitrary “turn” in the market, even tongue in cheek, sure gets attention. I would have loved to see more anecdotes from David about how vendors were pushing harder for advantage. This is where he, by dint of being in the negotiations, has premium information and insights the rest of us don’t.
And finally, I would have loved to see more specific suggestions for what customers can do to fight off these newly-emboldened vendors. Again, this is the “secret sauce” UpperEdge has that the rest of us don’t, and a turn in the market (meaning opportunity for some, danger for others) is an ideal time opportunity for David to show us what he’s got.
And a few questions:
Are you – on either the customer or the vendor side – also seeing a turn in the market? Is it only affecting some geographies or industry sectors? Is the higher demand translating into more pricing power? Or can you still beat up vendors?
And from a marketing perspective, do you agree that calling a “turn” in the market is a good way to get attention and, if so, what details should you provide to back up your call?
If nothing else, strengthening demand is a sign of spring we’re not getting from the weather, at least here in the chilly northeast. Thanks, Dave.
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