{"id":1025,"date":"2009-04-06T01:00:30","date_gmt":"2009-04-06T09:00:30","guid":{"rendered":"https:\/\/systematichr.com\/?p=1025"},"modified":"2009-03-30T10:45:39","modified_gmt":"2009-03-30T18:45:39","slug":"hr-technology-supply-and-demand-curves","status":"publish","type":"post","link":"https:\/\/systematichr.com\/?p=1025","title":{"rendered":"HR Technology Supply and Demand Curves"},"content":{"rendered":"

I\u2019ve written about it, and so have many others.\u00a0 The economy sucks.\u00a0 Thus, software sales in the HR technology space must also be down.\u00a0 In fact, I\u2019m pretty sure they are \u2013 at least in the talent space.\u00a0 Major ERP decisions seem to be on hold too, although some of my fellow bloggers don\u2019t necessarily agree.\u00a0 The point is, I\u2019ve been thinking about some basic economics for a while.\u00a0 Here is how it usually plays out from a supply and demand curve perspective:<\/p>\n

In the first picture, as the economy gets worse and spending decreases temporarily, the demand curve shifts to the left, forcing not only less buying, but also lower prices.\u00a0 We are seeing this today as not only is buying down, but vendors are clearly making price concessions to those who are in the market.<\/p>\n

\"\"<\/a><\/p>\n

As vendors adjust to the lower prices and volumes, the market perhaps will consolidate as supply tightens.\u00a0 Vendors decide to get out of a business that is either less or no longer profitable.\u00a0 Some vendors merge, but overall, there is less volume available in the marketplace.\u00a0 I think we\u2019ll start to see this very soon as quite a few vendors were profitable even when sales were good, and now that the market has tightened, many are no longer financially viable.\u00a0 Strong organizations are looking to purchase weaker ones with good products at a bargain price.<\/p>\n

\"\"<\/a><\/p>\n

Ultimately as vendors consolidate or vanish, supply tightens and overall prices increase again.\u00a0 Eventually the demand curve will shift out again (back to what is now the grey line) but it is possible that in the mid-term, prices are higher while the market adjusts to the overall lower volume due to vendor consolidation.\u00a0 In the long term, with prices higher than they are today, new vendors get into the business and the supply curve also shifts back.\u00a0 And the whole cycle repeats.<\/p>\n

The point is, buying right now is good if your company has the financial ability to do it.\u00a0 License fees and subscriptions are low.\u00a0 In the mid-term, prices will increase marginally or steeply as vendor disappear and demand returns.\u00a0 The only problem with buying in the near term is that you really don\u2019t know if your vendor will be around in a year or two.<\/p>\n","protected":false},"excerpt":{"rendered":"

I\u2019ve written about it, and so have many others.\u00a0 The economy sucks.\u00a0 Thus, software sales in the HR technology space must also be down.\u00a0 In fact, I\u2019m pretty sure they are \u2013 at least in the talent space.\u00a0 Major ERP…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[2,3],"tags":[],"class_list":["post-1025","post","type-post","status-publish","format-standard","hentry","category-hr-technology","category-vendors"],"_links":{"self":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/1025","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1025"}],"version-history":[{"count":3,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/1025\/revisions"}],"predecessor-version":[{"id":1030,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/1025\/revisions\/1030"}],"wp:attachment":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1025"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1025"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1025"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}