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Tough times to drive cloud uptake

09 Aug 2011

With financial belts only just unbuckling from the 2008 recession, it looks like businesses and consumers will be tightening up again.

However, one commentator says the downturn could act as a driver for technological innovation, particularly the adoption of cloud-based platforms.

Stockmarkets around the world have fallen following the downgrading of the United States’ credit rating by fiscal analysts Standard & Poors. 

The downgrade came at the end of last week, as the US government scrambled to reach a deal to extend its debt ceiling above the US$14.3 trillion limit.

The deal was struck at the 11th hour but analysts, it seems, weren’t convinced.

Standard & Poors downgraded the country’s credit rating from AAA to AA+, and stock markets around the world have been struggling since re-opening after the weekend break.

New Zealand shares fared okay yesterday as our proximity to the date line made us one of the first countries to resume trading following the announcement. 

However, shares have taken a dive today after a punishing day internationally. The NZX fell 2.8% when the market opened at 10am this morning, dropping 89.43 points to 3096.02.

Although the dip may see consumers and businesses tightening their belts, Mark Smith, xRM consultant for Microsoft distribution partner Magnetism, says financial anxiety could drive innovation in the IT sector.

"People are going to start rationalising their spending,” Smith says, "which is where the cloud model becomes more and more attractive to organisations.”

The drive into the cloud could even work to level the playing field for SMBs, Smith adds.

"It’s going to allow SMBs to compete against the big enterprises. Because you don’t need to have big servers the tools become available at a cost you can afford.”

Smith says the New Zealand IT industry has been resurgent lately, and this resurgence is likely to override the international downturn.

"I can’t imagine it will have a knock-on effect straight away. Two years ago  you had recruitment centres shutting down left right and centre, recently we’ve had 10 inquiries for new recruitment systems so they’re definitely making more placements.

"All it’s going to mean is that businesses will need to become more battle smart, more innovative, rather than just chucking in the towel.”

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