Editor's Note: Raise Confidence, But Not Prices - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Business & Finance
Commentary
9/26/2003
06:31 PM
Stephanie Stahl
Stephanie Stahl
Commentary
50%
50%

Editor's Note: Raise Confidence, But Not Prices

Confidence is up, the high-est it's been in a year, according to our Confidence Index. Researchers are forecasting a comeback in the chip sector, consumer spending is strong, and news of acquisitions is becoming more plentiful. But here's how we know there really is a recovery taking place. It's the try-to-squeeze-in-a-price-increase factor.

It was only months ago that CIOs said they were thrilled at the deals they were able to get. It's true that these business-technology managers have been doing more with less, but they've also been able to buy more with less thanks to some significant price breaks and flexible licensing terms from a vendor community looking to increase market share. But at last week's InformationWeek Fall Conference, Rich Hoffman, CIO of Hyundai Motor America, asked: How many people are finding their IT vendors trying to slip in surprise increases for maintenance, licensing, or other services? A bunch of hands shot up, and heads nodded.

IT vendors may be pushing back at this buyer's market, and it's a source of frustration to the buying community. One software vendor tried to tack on a 20% price increase, Rich said, but "I can't charge 20% more for a car." His reaction: "I challenged [the vendor's sales person] to bring his CEO in to meet with my CEO to explain his price increases." He hasn't taken Rich up on the offer yet, though.

On Rich's priority list is an aggressive goal to increase annual car sales threefold by 2010. That amounts to a total of about 1 million cars per year. That's on an IT budget that's lower than the industry average, he says. Don't expect the company to go on an IT spending spree. Instead, it will focus on a few vital IT projects, including data warehousing, security, integrated voice response, and Web tools.

Stephanie Stahl
Editor
[email protected]

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
2021 State of ITOps and SecOps Report
2021 State of ITOps and SecOps Report
This new report from InformationWeek explores what we've learned over the past year, critical trends around ITOps and SecOps, and where leaders are focusing their time and efforts to support a growing digital economy. Download it today!
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

News
How CIO Roles Will Change: The Future of Work
Jessica Davis, Senior Editor, Enterprise Apps,  7/1/2021
Commentary
A Strategy to Aid Underserved Communities and Fill Tech Jobs
Joao-Pierre S. Ruth, Senior Writer,  7/9/2021
Slideshows
10 Ways AI and ML Are Evolving
Lisa Morgan, Freelance Writer,  6/28/2021
Register for InformationWeek Newsletters
Video
Current Issue
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll