The Hardware Infrastructure and the Economy


Early returns from our trends research (last year’s results here) shows the server, client-system, and storage refresh cycle continuing.

When the Great Recession hit, companies scaled back their IT plans across the board, but three areas were hit especially hard: staffing, security, and system hardware. Staffing continues to to be tight, as we all know. That has nothing to do with IT particularly. Security has rebounded—and in case you’re wondering, this was a case of slower growth, not contraction. Because of virtualization, cloud computing, and mobility particularly, IT security has remained a growing and vibrant market. It just didn’t grow as fast as usual in 2009.

System hardware picked up more or less when the recession ended in 2009. By that time servers were becoming outdated within the new low-power virtualized model, and client systems were getting old. The release of Windows 7 gave this market a kick in the pants as well. That was the refresh cycle.

At this point, though, even midrange firms (which tend to run a little late) are in the back half of refresh projects. Yet investment continues. Why? That’s something we’re looking into now for the story, but I imagine the answer lies in the still-stagnant labor market. Investing in equipment refreshes is boosting productivity, allowing enterprises to continue to put off hiring. In the current economic climate, it’s an approach that makes sense, even if it’s unfortunate in human terms.