Regent recorded the biggest deal declines in the Hardware and Equipment sectors, reflecting the reality that hardware purchases are the easiest to switch off when budgets get squeezed. However, this usually presages a reduction in software purchases a couple of quarters later, after which IT services then follow. The data yet again confirms – if not heightens – our pessimistic predictions for 2009 market growth – by which we actually mean decline.
Whichever way you want to read these numbers, it doesn’t bode well for the sector. If you look at the chart you will see that the decline in deal flow seems to mirror that of the dotcom crash (Q1/Q2 ’00) though IPOs are already near trough levels. It’s encouraging that PE and trade buyers are still willing to pay a realistic price where they see true long-term value, but their view of that value will surely become more myopic . Then it’ll down be to the sellers to be realistic too!