Drive hard bargains now, says Gartner

Now is the time to negotiate tough new terms with IT vendors, according to Gartner chairman and chief executive Michael Fleisher.

Speaking at the company's annual European Symposium in Cannes, he warned IT professionals that any company banking on a quick economic turnaround would suffer, and would ultimately be overtaken by competitors that have adjusted to the current market and adopted new ways of working.

Warning that up to half of the current technology brands will disappear by the end of 2004, Fleisher stressed that now is the time to drive hard bargains with vendors.

"Over capacity is giving you the perfect opportunity to link in new terms," he said. "Many are acting now with extremely worried clients. If you don't, you are missing an opportunity."

Fleisher explained that the economic outlook for the IT sector next year remained awful, and that companies must replace any lingering wishful thinking with realistic expectations of what is achievable.

He predicted that the technology sector would see a "modest improvement at best" because there is so much IT over capacity in many organisations.

"No killer app will appear in 2003 that will radically change things," he said. "There is no prospect of a broad-based recovery in the technology sector as a whole in 2003.

"Many vendors are failing to see the enormous structural changes in the industry. Fifty per cent of all technology brands will disappear by the end of 2004."

Fleisher warned that companies should not wait for a global economic recovery as a "cure for our ills", because the most successful companies are already focusing on their highest value customers.

This step, along with careful management of costs and making small innovative investments, is separating the leaders from the laggards.

Organisational changes should be "with the ultimate goal of using technology to drive superior business performance", he said.

But there was some goods news for IT professionals. Following years of calls for IT directors and chief information officers to have a seat on the board, around half now do, and this figure is expected to rise to 80 per cent within three years.