Solution Providers Sound Off On Impact Of U.S.-Iraq Conflict

Bill Corbin, president of Network Catalyst, a networking and IP telephony solution provider based in Irvine, Calif., said a quick, decisive victory could convince customers that better times are ahead.

"If the war is as swift as they're telling us it will be, I think our customers will start spending again because they'll think the economy will pick up," he said. "If it gets dragged out, we'll see a slowdown, even more so than we have now."

Corbin said the threat of the conflict has "already impacted sales. Timelines and decisions have been pushed out," he said.

Peter Galvin, CTO of Burlington, Mass.-based solution provider Corporate Technologies, said there "are so many unknowns" in how the impending war will proceed to predict now how it will affect the economy and IT spending.

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However, Galvin said that companies are poised for economic recovery since they have been stretching the capacity and usage of their IT environments as far as they can to accommodate tight budgets. If the United States ends the war quickly and "if the terrorist threat is managed," a major economic recovery could be just around the corner.

"If and when the economy gets better, there's going to be a lot of motion," he said. "When things pick up they'll pick up big because everyone now is taking [their IT environment] as far as it will stretch."

"Customers are reluctant to spend money. We're grinding it out with services," said Jim Gildea, president of Aegis Associates, a solution provider in Watertown, Mass. With customers preoccupied by the threat of war and terrorism, technology that does not offer immediate return on investment simply isn't selling , Gildea said.

Larry Souza, president of Maximum Micro, a South Yarmouth, Mass.-based solution provider that recently expanded, said a quick resolution of the conflict could increase consumer confidence in the economy. "I am hoping it is going to make things better," said Souza. "A lot of people are in limbo waiting for what is going to happen. Once something has happened and they know what that is, then maybe there will be a little more faith in the economy. Businesses have been in limbo on IT spending and the economy since Sept. 11."

Bob Fowler, a senior resource manager of audiovisual at Sonacom, a St. Louis networking integrator that provides public displays, said the increased focus on security means more interest in public displays to delver timely security information. "Everyone constantly wants to stay tuned no matter where they are with cell phones, cameras built into cell phones and connectivity," he said. "It is a horrible thing to figure an industry will grow because of a potential catastrophe, but it is true."

If the United States goes to war against Iraq and there is a "happy ending, a lot of businesses will open up their wallets and start spending again on information technology," predicted Tech Data Chairman and CEO Steve Raymund. "But there is no guarantee the ending will be so happy and we won't have some kind of incident or some setbacks along the way that could roil the markets and cause business planners and CEOs to maintain their very conservative stance toward capital spending."

Tech Data has been forced to make contingency plans to evacuate its employees in Dubai if necessary as a result of a war with Iraq, said Raymund. "First and foremost, above anything else, we have to worry about the safety and well-being of our employees, so we have to look at every possible contingency," he said.

Nortel Networks Enterprise Networks President Malcolm Collins said in the short term "more people will be looking at CNN than thinking about buying a new PBX or LAN." Once the conflict is over, however, Collins said there could be an increase in technology spending. Ultimately, no one knows what the impact will be on the economy and technology spending, he added.

Amy Rogers, Elizabeth Montalbano, Jennifer Hagendorf Follett and Steven Burke contributed to this story