Now is the time to invest in new technologies

Companies need to proactively invest in technologies to cut costs or deliver customer benefits if they are going to thrive in the upturn, according to research commissioned by storage vendor Veritas.

But UK companies are far more likely than their European counterparts their to bury their heads in the sand and do nothing – 40% of UK businesses are effectively hibernating, compared to a European average of 20% and just two per cent in Sweden.

Lyndsey Armstrong, senior vice president at Veritas, told VNU News Centre that only those companies that continued to innovate and invest would weather the storm and take market share from their competitors in the market.

‘Three quarters of UK companies say they have been affected by the downturn and the UK has the largest number doing nothing. I believe they think they’re close to the US in coming out of the recession. They will come out of the downturn weaker than the competition. It’s a very worrying statistic for the UK,’ Armstrong said.

‘Although 97% of respondents believe they will come out of the recession stronger than when they went in, I believe some of these people are fooling themselves,’ Armstrong added.

At the same time, half of IT directors accept they are not making the most of their existing IT infrastructure, but 45% continue to invest in new hardware. Seven per cent of IT directors admitted they had no idea what their hardware utilisation rate is.

‘The mentality is that if you have a problem you throw hardware at it. It’s also because they don’t know what else to do,’ Armstrong said. ‘We need to educate them that hardware isn’t the answer.’

Rakesh Kumar, vice president at analyst Meta Group, described the reluctance to invest as a backlash to Y2K and the bursting on the dot com bubble.

‘Organisations are saying the first thing is to cut back on new projects. They’re saying ‘we do not want to be exposed if life gets worse’. The economy is strong enough to allow IT so spend money fixing some of the backend processes – but it’s not happening. The long-term implications are that they are missing an opportunity and they will lose out to the competition,” Kumar said.

‘Just because we made mistakes in the past doesn’t mean we shouldn’t act now. It’s up to IT to make the case and it’s not doing that properly,’ he said.

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