Vodafone Enterprise Chief Says Companies Are Cutting IT Costs

Vodafone Group Plc’s (VOD) global enterprise unit is looking to entice more businesses to cloud computing to combat effects of reduced information and technology spending amid a harsh economic environment.

“The macro environment is still forcing companies to think about how to spend on IT,” Vodafone Global Enterprise Chief Executive Officer Jan Geldmacher said at the Bloomberg Enterprise Technology Summit in London today. “The trend is continuing that companies try to get costs down on IT, telecom and communications.”

Geldmacher said some companies were scaling back too far, limiting their strategic flexibility and are “losing the race.” Europe’s sovereign debt crisis has lead consumers and businesses to cut spending and contributed to the company’s first decline in service revenue in 10 quarters last period, Vodafone said in November. Declines in Spain and Italy lead to a 5.9 billion pound ($9.5 billion) writedown.

Still, the global enterprise segment is healthy and one of Vodafone’s fastest growing units, Geldmacher said. Vodafone Global Enterprise serves the company’s largest multinational accounts.

To combat tighter budgets, Newbury, England-based Vodafone is expanding its offering for new technologies to these customers, Geldmacher said. The company is working to convert more businesses to cloud computing and virtualization services, which give workers access to their data from anywhere, he said.

To contact the reporters on this story: Amy Thomson in London at athomson6@bloomberg.net; Kristen Schweizer in London at kschweizer1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.