Wall St. and Elections Piling on the Uncertainty - Page 2

Sep 29, 2008

Pam Baker

Regardless of the election outcome, the consensus is that some things will likely remain the same. According to Marcotte, the federal government will spend in the neighborhood of $70 billion on IT in the coming fiscal year, regardless of the newly elected administration party affiliation. “Of course, how they spend that money and the priorities for spending will be impacted by the elected party,” he said.


The Line of Business initiative, which originated with the Bush administration, may be slowed down “ … due to the funding complexities and lack of measurable benefits to this point,” said Marcotte. He surmises that Department of Defense (DoD) funding will be scrutinized and will be aligned with the stated Democratic pre-election platform, i.e. additional support for IT and otherwise in the Afghan arena and phased reductions in Iraq, if the Democrats win.


Wall St.


There may be reductions in IT in other countries as well, but not necessarily for political reasons. Amsterdam-based Martijn van Halen, CTO at Payvision, a payment and security solutions company serving several major European, American and Asian banks, points out that “ … a falling dollar may make prices for U.S. hardware and software increase” possibly to the point it is prohibitive. In van Halen’s view the current economic crisis poses a far bigger problem for IT than impending changes from the U.S. presidential elections. He isn’t alone in this assessment.


Mark Eagle, CTO at VarVee LLC, a sports database company, said the current economy is affecting all their consumer and business transactions, which in turn affects corporate spending. “All IT expenditures are examined more cautiously.”


Across the pond, CIOs are seeing much of the same.


“Dealing with insurance companies who are really being affected by the present (economic) crisis means that contracts we had hoped to get are now on hold, which means no sales, which means no money, which means no new investment in IT spend and R&D,” laments Kevin Pallett, managing director at Iris Global, a “Pay As You Drive" car insurance, road toll and parking company based in the U.K.


IT business coming into the U.S. is equally stymied.


“The U.S. is one of our target market prospects. We are not affected by any U.S. presidential election outcomes but the economic crisis is the key factor that we are postponing the market promotion,” said Mamta Narang, founder and director at AAshmam, a multinational IT architecture consultancy based in India.


Following one of the biggest drop in Wall Street stocks in history, both in points and percentages, the U.S. is in unchartered territory and CIOs worldwide are gingerly plotting their course through it.



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