Is demand for IT weakening? What do the trends indicate?

Two big computer vendors, Dell and Ingram Micro, have warned of a weakening in IT. Though they did not specifically mention the financial sector, but they did hint of some shock from the sector. They informed that both consumer and corporate end-demand were on the downhill spiral. Tech shares have taken a downturn recently. Dell has lost nearly 10 per cent and Ingram Micro has gone down by about four per cent. Business software maker VMware was down by nine per cent and Micron Technology was a major loser at 12 per cent.

Dell, the second-largest maker of personal computers, has already posted a sharp drop in fiscal second-quarter profit. It said that customers were delaying their purchase decisions. They do not want to block their money. Dell is planning to reduce its headcount and investment in infrastructure.

Ingram Micro is the world’s biggest computer products distributor. It has cut its quarterly profit forecasts. It said that there is no sign of an immediate bounce back after the summer holidays. Incidentally, the US is still a little better than Europe as far as business outlook is concerned.

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