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2009 IT Spending Roundup - Page 1

Nov 14, 2008
By

Allen Bernard






You’d have to live under a rock to not know that economies around the globe are either in, or heading for recession. In the past, when IT was viewed as just a cost-center, this meant sharp cuts in IT spending. This time around things don’t look too bad.

 

Gartner, IDC, Forrester and Computer Economics have all come out with revised IT spending forecasts that factor in at least some of the craziness of the financial markets in September, October and November. Taken as a group, these analysts are only calling for a slowdown in IT spending growth, not cuts in current levels.


 

While you can’t compare these predictions on an apples to apples basis because of sampling metrologies and the metrics they look at, overall, the takeaway, for the moment, is a positive one, said Frank Scavo, president of Computer Economics (CE). You may still be asked to cut out some new projects and hold off on hiring but, overall, IT will have either same amount of money to run on going into 2009 as it had in 2008 or see increases somewhere between two-to-four percent.

 

“Of course, if the economy continues to deteriorate and this week doesn’t look real hopeful on that count, this could turn more negative in the coming couple, three months,” he said. “It’s not like 1998, 1999, and 2000 … so there was a lot of bloat in IT budgets and many IT organizations coming into this recession were already running pretty lean so there’s not a lot of fat to cut out.”

 

According to Nov. 13 numbers from CE, which looks at the buyer-side of things, one-quarter of 159 respondents anticipate spending reductions of at least 3%. But another quarter anticipate that their IT operational budgets will rise by at least 5%. At the median, IT organizations forecast that their spending growth will be flat.

 

IDC, which looked at worldwide IT spending, predicts IT spending will grow 2.6% year-over-year in 2009, down from its pre-crisis forecast of 5.9% growth. In the U.S., IT spending is expected to decline much more to 0.9% in 2009, much lower than the 4.2% growth forecast in August.

 

"Although all the economic forecasts went from up slightly to down drastically in a matter of days, the good news is that IT is in a better position than ever to resist the downward pull of a slowing economy," said John Gantz, chief research officer at IDC, in a written statement. "Technology is already deeply embedded in many mission-critical operations and remains critical to achieving further efficiency and productivity gains. As a result, IDC expects worldwide IT spending will continue to grow in 2009, albeit at a slower pace."

 

Gartner, which is sticking to it’s Oct. 13 forecast of 2.3% increase. This is down from a prior forecast of 5.8%. Like his brethren at IDC and CE, Gartner sees IT as too embedded in mission-critical activities to be slashed and burned by the current recession.

 

“We learned that in tumultuous times, CEOs want their executives and managers to be advisors and counselors, not just great implementers of directions given to them,” said Peter Sondergaard, SVP at Gartner and global head of Research. “What they want now most of all is agile leadership. Leadership that can guide us through simultaneous cost control and expansion at the same time.”

 

Forrester’s latest forecast put out Oct. 15, reiterates its earlier position from Sept., just before things went bust on Wall St. That forecast assumed the U.S. economy would slip into recession in Q3, which has happened. Forrester is sticking to it’s two-to-four percent spending growth rates for Q4 2008 to Q2 2009. Overall, Forrester is looking for a 6.1% IT spending growth rate for the U.S. in 2009.

 

Forrester’s Andrew Bartels does, however, offer up a gloomier assessment of what may come:

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Tags: IT spending, economy, recession, IT budgets,
 

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