Beyond Silicon Valley, tech spending is holding up

JPMorgan Chase, the big bank, employs 55,000 tech people, down from about 50,000 before the pandemic. It has hired people with skills in cloud computing, data science, artificial intelligence and cybersecurity, and the bank will continue to add people selectively, said Lori Beer, global chief information officer of the bank.

Global technology surveys point to weak spending on hardware. After a pandemic surge, sales of personal computers and smartphones for remote work and consumers fell sharply. Two major tech research firms, Gartner and IDC, have lowered their growth forecasts in recent months, citing a continued slump in personal computers, a turbulent economy and a strong dollar.

But corporate investment, particularly in software, remains fairly strong. John-David Lovelock, Gartner’s chief forecaster, said spending was rising in every industry he tracks and called the trend “recession-resistant.” His IDC counterpart, Stephen Minton, said business investment in tech was not immune to a downturn, but was “more resilient than it has ever been. “.

Sales of cloud computing and remote software may slow, but only from the stratospheric heights of the pandemic. Amazon announced this month that its highly profitable cloud business, industry-leading Amazon Web Services, was generating revenue at an annual rate of more than $80 billion and grew 20% in the fourth quarter. Microsoft, the second-largest cloud computing company, reported that sales of Azure, its flagship cloud product, increased by 31%.

Recent results for enterprise technology providers show a similar trend. Vendors helping companies convert to digital operations and cloud computing are doing well, including Accenture, Oracle, and ServiceNow. IBM announced job cuts, but for business, it’s losing; its cloud and AI sales are strong.

Salesforce, a customer management software publisher, is cutting jobs and is the target of militant shareholders. But their argument is that Salesforce should cut expenses to increase profits. The company’s revenue increased by 14% in the last quarter.

The relentless advance of software in nearly every industry is making technology spending less cyclical.

Take the auto industry. A modern automobile is becoming “a vehicle that is truly software-defined,” said Alan Wexler, senior vice president for innovation and growth at General Motors.