October 7, 2022

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A report released on Monday by private investment firm Bain Capital indicated that, despite several disruptions in the technology industry, including the global supply chain crisis and Russia’s invasion of Ukraine—most IT decision-makers have stable budgets or increases for the coming year. predicted.

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Over the past two years, the impact of the pandemic on that figure has been noticeable – initially, less than half of those surveyed said they expected anything other than a reduction in their budget for the coming year. The numbers changed sharply as the economy emerged from the worst effects of the COVID crisis, however, 75% in 2021 and 90% in 2022 said they expected a steady or increased budget.

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That number has dropped to 77% in the latest report, according to David Crawford, Bain’s head of global technology practice, but it’s still an indicator of strong demand for products and services in a region that still has its share of headwinds. facing more than

“CIOs and CTOs are increasing their technology spend,” he wrote in the report. “Of course, there may be budget pressures in the future, but in the long term, for them — and for us — technology is not so much a cost as an investment that drives productivity.”

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Much of the report is devoted to vendors and their likely best moves to cope with a tough economic situation, providing some insight into what IT departments can expect from the companies they deal with in the future.

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With changes to streamline sales and reduce travel, businesses can expect some of their vendors to move toward consumption-based pricing, thanks to higher demand for that model, and more around product development. To act strategically, as Bain’s research shows, the return on investment for R&D spending is often not at the level that management is looking for.

According to Bain, chip loss is gradually decreasing, but recovery is not likely to be particularly fast or painless. Given global economic conditions, a simple reduction in demand could be one of the most important contributing factors to the recovery of the silicon market, and company researchers have identified two other factors that are likely to determine whether the recovery How long or short?

Extreme ultraviolet lithography equipment—the $150 million machines needed for the latest generation of silicon, and made by only one manufacturer—represent a current bottleneck to manufacturing capacity.

Furthermore, geopolitical friction between many countries presents its own stumbling blocks to recovery, as import restrictions make it difficult to source key resources. Russia’s ban on the sale of noble gases such as neon, which is critical to silicon manufacturing, Japan’s tightening of controls on the supply of high-purity hydrogen fluoride, and similar trade issues are expected to exacerbate chip shortages in the short term. Chances are until those issues can be resolved.

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