Capital spending, on the other, was already hit hard in 2007/2008 so remained flat this year compared to 2008, which was flat compared to 2007, when capital spending budgets increased just 4.0%. "I'm not sure there's too much surprising as we're looking at budgets for this year," said John Longwell, CE's director of Research and lead author of this year's 2009/2010 IT Spending and Staffing report. "It's a flat growth from prior years which is not particularly surprising."
This is also true for IT spending as a percentage of revenue. As revenues have declined, so has IT spending. CIOs have been reducing this number steadily since 2006 when spending as a percentage of revenue stood at 2.0%. This year's number is unchanged from last year at 1.5%.
In other words, they are looking at companies that are still standing. Not Lehman Brothers or Washington Mutual's effect on spending, for example.
Things were much worse for IT in the aftermath of Y2K, dot-com and 9/11:
"Nevertheless," the report states, "there is a silver lining: the current value of 45% increasing IT budgets is well above the 36% realized in 2002 in the aftermath of the 2001 recession. This indicates that the current recession, though reportedly more severe than any since the Great Depression, is actually not as acute in terms of IT spending as the 2001 recession. This is because the 2001 recession was led by the technology sector. There was a widespread overspending on IT in the late 1990s, fueled by economic expansion, the buildup to Y2K, and the dot-com bubble. As a result, many IT organizations experienced severe cutbacks in spending in the 2001 recession and in the two years thereafter."