Financial meltdown and the impending IT crisis

With Wall Street investment banks crashing and burning mostly due to their own malfeasance and greed, huge government bailouts, and no end in sight, there's just not too many ways to put a positive spin on what's happening. Mortgages became abstracted derivative instruments where the true risk was hidden, and for a time, some people made piles of money. At the same time, we created an unsustainable housing bubble in places like my (former) haunt of Silicon Valley and central California, where crackerbox houses cost upwards of a million bucks. Apologies to you who already own said crackerboxes, but that is a bubble that is in serious need of puncturing. We are now on a downward slide, but you all knew that already.

And there's more evidence that it's hitting the IT business, which until now, has been relatively untouched. The Channel Insider Mid-Year Outlook report, a survey of some 300 solution providers, is out. Not too long ago, at the beginning of this year, the survey said about seventy-five percent of resellers surveyed said they expected profits to be up compared to 2007, today, only half said that. According to the report, providers say their customers have delayed IT projects, take longer to make purchasing decisions, scale back deployments, and push back on pricing.

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