Ballmer: Get Used to “New Normal”

As Microsoft CEO Steve Ballmer continues his worldwide promotional tour on behalf of Windows 7, he is reminding all within earshot that the worldwide economy, at least as it pertains to information technology, isn’t about to spring back to its past glories.

Ballmer made his latest dire economic pronouncements while in South Korea, but he’s made similar statements previously. He’s actually been strikingly consistent in his gloom.

For what’s it worth, I think Ballmer is right. The golden days of corporate IT spending will not return for some time.

As Ballmer says, we must adapt to the “new normal.”

In comments reported by Associated Press (AP), Ballmer said:

“The economy went through a set of changes on a global basis over the course of the last year which are, I think is fair to say, once in a lifetime . . . . ”

“While we will see growth, we will not see recovery.”

Ballmer soft sells us a little here. The global economy did go through a set of changes, but some of those are permanent and they will be with us indefinitely.

It’s difficult, for example, to envision the American consumer ever returning to his or her role of profligate, voracious buyer of foreign-made goods. A new reality has been forced upon the overstretched, tapped-out American consumer, and that has occasioned a new reality for all the businesses — including a great many large corporations — that depended on extravagant American consumption.

Getting back to Ballmer, he said corporate purchases of PCs and servers were down about 15 percent globally, and he emphasized that CEOs “have much more tightly constrained IT budgets.”

Agence France Press (AFP) reported additional Ballmer remarks made during the same address. According to AFP, Ballmer said:

“With capital more scarce, we know IT budgets are more scarce. There is going to be pressure in businesses to drive for a new level of efficiency.”

“So it’s important that we’re not saying we just had a crisis and we are going to have a recovery. We are going to live in what we like to call the new normal. The new normal will be a more scarce environment than we saw a year, two years, three years ago. While we will see growth, we will not see recovery.”

It isn’t all darkness, however. Ballmer sees WIndows 7 playing a significant role in helping companies “do more with less.” On that theme, he emphasized the cloud-computing and virtualization capabilities of Windows 7, which Ballmer said would help companies lower hardware costs and save on energy expenditures.

At the end of the day, Microsoft sees a sliver lining in the dark, heavy economic clouds that seem firmly anchored above us.

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