Ingram and Dell Issue Spending Warnings
Two channel powerhouses, distributor Ingram Micro and vendor Dell, are warning that global customer demand is weakening, suddenly darketing the IT spending landscape. Coupled with HP's decision to lay off 24,000 workers as part of the integation of systems integrator EDS, the news has brought a cloud of economic uncertainty to the channel.
IT spending overseas has shielded distributors and vendors from the economic growth slowdown in the U.S., but the announcement from Dell and Ingram Micro suggest this strategy won't work going forward. In a new 3Q economic update, Ingram CEO Greg Spierkel warns that "economic softness," first noticed in July, has extended into September and taking root in markets around the world.The company is reducing costs as quickly as possible to maintain profitability in the new environment.
Dell, meanwhile, also reported it is noticing softening end-user dmand for its products in markets around the world and is taking further cost-cutting actions. These are the first major tech companies to report a slowdown in tech spending globally, and the likelihood is, they won't be the last. The real issue for the channel, however, is not the future strength of overseas sales, bur the strength of the SMB market. Small businesses have helped channel companies weather past economic storms, and they may come to the channel's rescue again.