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Inflation? Not in IT

There’s a nice chart on Yahoo! Finance that summarizes the US Bureau of Labor Statistic inflation data over the last year as of September 2022.  Not surprisingly, gasoline was on a wild gallop, and new vehicle costs jumped as well (presumably due to the supply chain snarls).

One area which has been under deflationary pressure?  IT.

Sep 2022 Inflation Chart

This make sense for several reasons.

First, large parts of the IT sector are immune to supply chain slowdowns because they’re software-based.   Sure, you need servers to run applications but organizations and clouds have spare capacity they can eat into if there is a hangup in getting more servers or storage, and the recent problems have not totally frozen the movement of goods.

Second, there was a surge in IT spending back at the start of the pandemic as people outfitted home offices.  People will spend money on better gear that they choose.  Now that people are headed back to the office or are already outfitted, demand has softened.

If Google or Oracle management was writing this piece, they’d tell you it’s because their services are so fantastically efficient that they’re slashing customer costs, etc.  🤔

Unfortunately, the story I linked has a second chart showing all the areas where inflation is getting worse.

 

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