IT's a rugged world

How to cope in tough economic conditions that are unlike any previous industry downturn

For all the talk by company executives and analysts about "opportunities" and "synergies" for the combined company of Microsoft and Yahoo, putting them together will be an enormous challenge. Will the bid go ahead? Most likely. Will it work is a question mark.

According to Forrester it makes sense but the logistical and operational challenges of combining the two are very, very messy. If this marriage is consummated, it is either going to be a very potent challenge to Google's rising power or a waste of $US44 billion, according to IDC's Frank Gens.

Analyst's angles have been coming in thick and fast this last week or so giving their outlooks on the hot topics of the IT industry. In the coming weeks we will be running columns from Australia's analysts on how they see events affecting the Aussie markets and activities of the local vendors.

Vast fortunes were built over the past two decades as the leadership role shifted from hardware to software to the Internet. Now every day seems to bring fresh evidence that the era of boundless growth may be over and that M&A activity will accelerate.

Chances are you've already got the message that money is tight and IT spending is being re-examined. The buying world's decision-makers have fundamentally changed to CEOs, CFOs, sales chiefs, general managers, and divisional heads. They're worried about the company's finances, layoffs, interest rates, exchange rates, closures, M&A and their individual futures, not what brand of Web services or enterprise software to buy. But they're also worried about ongoing operating expenses and ways to reduce them!

The current economic conditions are very different from previous downturns and so is the competitive environment. Technology marketers must focus on different areas now. It's no longer about changing customers' minds to fit the product or an "as-long-as-it's-blue" style of marketing. While the technical sale may have worked when the technology bubble was hot, it doesn't work that way anymore.

Len Rust is publisher of The Rust Report

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