Experts divided on impact of Democrat victory on IT landscape

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Now that the Democrats have seized control over both the U.S. House of Reps and Senate, opinion is divided on how this historic victory will affect the U.S. and Canadian IT industry.

While some believe the impact will be minimal, other have a different view.

Apart from e-voting problems (and possible negative perceptions of technology they may have triggered) the elections results will not have much of an impact on the IT industry, according to Randy Dove, executive director of government relations for Electronic Data Systems Corp. (EDS) of Plano, Texas. He says as far as its IT agenda is concerned, “Congress is generally bi-partisan,” and does not decide tech issues based on party lines. Dove also heads the Canadian-American Business Council (CABC).

Vito Mabrucco, managing director of Toronto-based consultancy firm IDC Canada Ltd. has a different perception.

He believes Canadian firms – including tech firms – might benefit from a Democrat majority. “From an economic standpoint, it can’t hurt Canadian businesses to have a party in Congress that’s more open.”

Mabrucco urged Canadian IT firms to pay close attention to how the Democratic victory would affect the American economy. “A lame duck president, rising interest rates might cause business executives to re-think or put on hold some decisions.”

A slow down south of the border could trigger a similar situation in Canada, but Mabrucco is optimistic any such negative consequences would be short lived – if they did happen. Earlier reports have indicated a down turn in IT spending in the U.S.

IDC Canada’s Mabrucco says indicators to watch closely include the housing market, consumer spending and interest rates.

The Republicans have controlled Congress since 1994, but as many predicted, the election saw their hold crumble. In addition to the Iraq war, surveys revealed voters were disappointed with the Bush administration on issues such as corruption, the so called “war on terror” and the economy.

Some believe a shift of power could renew the debate on Net neutrality and government surveillance. In recent months, Democrats have been seen as supporting laws that prohibit broadband providers from blocking of slowing competing Internet content, while Republicans were said to oppose such a law.

Large telecom firms have been at the centre of that debate, but this may change, at least one Canadian analyst said.

Republicans “tended to side with big business,” according to Brian Sharwood, principal of Toronto-based telecommunications consultancy firm SeaBoard Group “A strong Democrat presence in Congress might give more voice to smaller companies on the issue,” he said. Dove, however, disagrees.”Net neutrality,” he said, “is not a Republican versus Democrat issue.”

He also expressed doubt the issue will be resolved any time soon.

Sharwood said Democrats will probably push for greater oversight of government surveillance programs and data privacy and security legislation.

“These programs will get funded differently and we’ll probably see surveillance and security measures in more sensible forms,” said Sharwood. He said any increase in IT spending by the U.S. government will most likely be geared towards homeland security and money would eventually trickle down to Canadian firms that work in the security market.

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