Chapter eight

This chapter introduces some approaches to cost savings and cut the IT budget which the companies use for narrowing IT spending. For example, off-shoring, the low cost of the hardware, new conservative spending patterns and open-source software can help the companies cutting IT spending for the new technology. However, it make the new problem, that the IT industry come to an end. However, the author disagrees with this kind of problem because of the many factors and he also assumes spending will decline. I also agree with the author. Because I believe that his prediction would be happened such as what has happened with hardware over the thirty years is positioned with the software and internal labor. The risks of the economy increased over the last few months, it would make the decreasing of the IT investment be able to show up. The other reason of the author’s assumption of decreasing the spending of IT investment is that the Web and Y2K make IT spending uncommon from tradition. In addition to open-source, free-ware and off-shoring also decrease IT spending to unnatural levels. What is the natural level for IT spending? When the companies implemented the new technology before, they had to spend millions on the materials and the cost of the maintenance. However, now the new IT things help the companies save millions for that kind of costs. Thus, the companies need to reduce the IT budget. The technological providers should prepare for a decrease in revenue. The possible sufferings are lower hardware sales, varied losses in all software categories, and the competitive pricing for the providers. The vendors should accept these kinds of loose changes.