12 May 2003 Software giant Oracle has warned that the outbreak of Severe Acute Respiratory Syndrome (SARS) in Asia is affecting sales in the region, with new sales “slowing down or being deferred”.
The warning was issued by Derek Williams, executive vice president in charge of the Asia/Pacific region for Oracle.
Williams told the Financial Times that many customers in affected countries were operating with skeleton staffs and therefore could not negotiate new orders. “It’s very disruptive indeed. There’s no one to talk to,” he told the FT.
While the pipeline had been “solid” at the beginning of the quarter, it was open to question how many of those potential deals would be closed before the end of the current fourth quarter and full year, he said, which closes at the end of May.
Oracle is the first major technology company to warn about the potential impact of the SARS epidemic.
About one-fifth of Oracle’s new licence sales are derived from the Asia/Pacific region and China represents a particularly fast-growing market. This was reflected in last week’s agreement between Oracle and Chinese Linux operations system distributor Red Flag to test, certify and support the Oracle database running on Red Flag Linux.
But Williams’ claims suggest that SARS is affecting more than just the airline and tourism industries in the affected countries and that it could have far-reaching implications globally, particularly if it further weakens the already shaky Chinese banking system.
Separately, Goldman Sachs’ latest IT spending survey suggests that the depressed climate for technology companies will continue at least until the end of the year. Only 4% of respondents at ‘global 1000’ companies said that they expected IT investment to increase in the second half of the year, down from a quarter in February’s survey.