New Delhi, Dec 04: The IT industry has entered a period of vendor consolidation and accelerated job losses which will last through 2005, with as many as 50 per cent of technology suppliers being eliminated from the competitive landscape, warns leading research and analyst firm Gartner Inc, in its top 10 predictions for Asia Pacific in 2004. In a series of regional forecasts focusing on the hot issues for 2004, Gartner said that the days of ''the customer is king'' will shortly end as market forces crush the weaker vendors. This will result in most it sectors being dominated by a few large vendors that will not be governed by cut-throat pricing.
''As many as 50 per cent of technology suppliers will be eliminated from the competitive landscape,'' said Partha Iyengar, research vice president at Gartner India.
''For example, there are currently more than 2,300 publicly traded software companies in the world, that's about 50 to 60 per cent too many. For those companies that survive, this means that they can focus over the next several years on providing quality and not be price driven.''
Gartner added that although the long-term outlook for it is brighter, it will also result in pain for many.
''We now see true recovery in the making,'' said Iyengar. ''The combination of key technology advances, architectural changes, market forces and best practices will lead to a strong recovery for IT in the near future”.
However, the resulting impact will be both positive and negative. ''On the positive side, massive productivity improvements, significant increases in demand and enormous infusions of true innovation will occur. But on the negative side, vendor consolidation will result in continued job loss in high-paying white collar positions, primarily in the developed economies.''
Bureau Report