Distributors Say Economy Remains Big Drag On IT Spending

"What will drive the recovery is the economy in general as opposed to any new technology," said Tech Data Chairman and CEO Steve Raymund. "The recovery, such as it is, has been tepid and I don't expect any pickup [in the IT market until corporations are more confident."

Raymund cited the threat of war with Iraq as the main cause for economic concern in the near term.

Mike Grainger, president and COO of Ingram Micro, agreed with Raymund, and pointed out that regional issues also play a role in determining the economic environment. "The economy is the main problem, and it's very geographic specific," said Grainger, adding that potential for growth in Asia and Eastern Europe provides a "ray of hope" in those areas.

"The economy in Europe is the most important driving factor," agreed Lennart Svantesson, president and CEO of Scribona AB, a Solna, Sweden, distributor. "But enterprise software remains very profitable for us. And there is a pent-up demand for notebooks."

But Don Bell, chairman and CEO of Bell Microproducts, said he doesn't expect any pent-up demand to lead to a PC desktop refresh that some analysts are starting to predict for next year in the United States.

"The quickest way for a CEO to get fired is to approve a major PC upgrade," he said. Bell predicted, however, that storage and wireless would offer the most opportunity for growth in 2003.