October 29, 2008, 9:19 PM — VARs don't like the old saw, "If it ain't broke, don't fix it." There has historically been a lot of money in replacing or upgrading perfectly functional technology with something that adds a little "zing" to the equation. But today, that "zing" doesn't mean as much. Customers are still spending, but not on non-essential projects. R.W. Baird analyst Jayson Noland summarizes the situation, saying "It has to be tangible, make sense, and be less than 12 months. Anything that's squishy and nice to have, is just not going to play well in this environment. If you've got a project to replace something you just don't like, it's going to be delayed. You can get by with what you're using longer than what you think. That's true for applications, and that's true for hardware refreshes in general, and you can delay those things whether it's on the PC side or the server side. You can't delay them forever, but you can delay them for a few quarters."
William Dunn, president of Dunn Solutions Group, has observed that "Things that are purely internally focused, like applications or projects that are employee-oriented, tend to get cut first. So for instance, if there was a thought of doing an employee portal for HR, that might get cut in this type of environment." Joe Brown, president of Accelera Solutions, also sees budgets tightening up and deals getting delayed, saying, "Software and hardware manufacturers who are in the 'nice to have' column tend to suffer more than others do, who are in foundation technology markets."