Is The Worst Over For Tech Sector?

From the Wall Street Journal (and the We Really Hope It's True Dept.):

After reducing their budgets sharply for months, many businesses across the U.S. have stopped slashing information-technology spending, a shift that could stem revenue declines at tech companies, including Hewlett-Packard Co. and Cisco Systems Inc.

The WSJ cited Forrester Research data showing corporate tech spending increasing 13% in 2007 and 8% in 2008, with spending expected to drop 3% this year. But, WSJ reporter Ben Worthen writes, "interviews with more than a dozen chief information officers and corporate technology executives who oversee tech spending indicate that a range of U.S. businesses have finished cutting."

The stabilization doesn't mean the good times are back in tech. While spending may have hit a bottom, the executives say they don't intend to boost their budgets again until after their businesses and the economy as a whole have shown stability for several quarters. For 2010, they anticipate tech budgets that are mainly flat.

"I don't think that we'll see the [spending] levels that we saw three or four years ago," says Catherine Brune, the chief information officer at insurer Allstate Corp., whose $1 billion tech budget has been flat for the last year and will most likely remain so into 2010.

But for now, she says, "I'm not hearing the panic that I was six to nine months ago."

That's good because, face it, panic generally is a bad thing. It leads to markets selloffs, bank runs, rash business decisions and legally questionable practices. Worse, panic feeds on itself. Of course, panic is the mirror image of irrational exuberance, which -- as we've learned the hard way -- can lead to market run-ups, wasteful spending, rash business decisions and legally questionable practices. Irrational exuberance also feeds on itself.

Maybe it's not as exciting, but give me level-headed and sober-minded any day. But first, give me a recovery.