Tech on hold: economy leaves firms hesitant to spend.

• Author: Diddlebock, Bob

Question put to a Denver entrepreneur who has done well in publishing and telecommunications over the last two decades: "What has your company spent on information technology, or IT, of late?"

Reply: "Not a *&$ dime."

Question: "Why?"

Reply: "Because the economy sucks ... and there's no disadvantage to waiting."

In today's economic downturn-one that seems that much more severe considering the drunken-sailor spending, stock-market run-ups, and high-tech hysteria that preceded it-Mr. Denver Executive's grumpy take on business life is understandable.

No revenue coming in means buying no new computers, software and other tech gear.

What's unsettling is that so many other Denver- and Colorado-based businesspeople agree with him that IT spending probably won't rise any time soon.

That, in turn, could dampen the prospects for an economic recovery that everyone from the CEO'S office to the folks down on the loading dock, in the labs, on Wall Street or in the unemployment line are praying for.

One late-2002 survey of chief information officers and analysts conducted by the consulting firm of Gartner Inc. predicts that 2003 IT spending on a nationwide basis will probably run even with 2002's, which was down 3 percent from 2001's levels.

An upturn isn't seen until later this year or in early 2004.

"Locally, IT spending is one of the indicators we're keeping close tabs on for an economic turnaround," says economist Patricia Silverstein, the president of Littleton-based Development Research Partners. "1 doubt we'll see any significant improvement until mid-2003."

One school of thought about the local falloff in IT spending holds that Denver's telecommunications and high-tech companies had already loaded up on the latest hardware, software and computer technology--some of it related to Y2K--before the economy tanked 18 months ago. Those enterprises, in turn, were able to pare spending without losing too much traction to competitors.

"During the late 1990s, the Denver market became heavily weighted in tech, even relative to other markets around the country," says Xander Oxmon, a principal with LoDo Denver's Ironspark, a technology-consulting firm. "It means we felt the recent burn a little more than some other markets. But the real residual effect is a very progressive position on technology, in general."

He adds: "Comparatively, I believe Denver-area companies are still ahead of the curve in terms of adopting IT."

Townsend Wardlaw, a principal with Three...