Execs Ponder November Downfall

"It was wild. The curve was where we thought it should be, and then all of a sudden it turned down," said John Edwardson, chairman and CEO of CDW

Computer Centers. The slowdown was evenly spread across all customer segments and product categories, Edwardson said, and it led CDW, Vernon Hills, Ill., to reduce its fourth-quarter revenue outlook.

Ingram Micro adjusted its own fourth-quarter guidance last week, and Tech Data did the same on Nov. 25.

"When it happened to Tech Data we wondered what happened there, because we weren't seeing it. Then it just showed up," Edwardson said at last week's Raymond James IT Supply Chain conference here, co-hosted by CRN.

The November slowdown led many executives to postpone their hopes for an economic recovery to at least the second half of next year. Bell Microproducts doesn't expect a significant recovery for at least six months, said Don Bell, president, chairman and CEO of the San Jose, Calif.-based distributor. "I thought I was pessimistic, but [a group of analysts told me I was the most optimistic person they'd talked to all day," Bell said.

The softening in sales is likely due to a combination of factors, said Tim Curran, the Global Technology Distribution Council's CEO. "There is the situation in Iraq, a shorter selling season, rising unemployment. It has people nervous," he said.

MicroWarehouse Chairman Jerry York said, "I think that 2003 will, for the most part, feel like 2002. We think the U.S. market is more or less at bottom. %85 We are planning that there will be no recovery in 2003. Hopefully, there will be one by 2004."

The uncertainty will continue to make it rough for the high-tech industry to gain credibility with Wall Street, despite efforts to improve efficiencies, reduce debt and cut costs, York said. "I won't kid you. Our banks are nervous. They hate anything with the name IT on it. The only things they hate worse are telecommunications and airlines."