Forrester reports impact of economic downturn on tech spending
More than 40 per cent of large businesses have cut their IT budgets this year due to the global economic slowdown, according to a new survey by Forrester Research.
The economy's affect on IT spending is evident in the research, with 43 per cent of firms already having cut their overall IT budgets in 2008 in reaction to the slow down in the global economy, while 24 per cent of firms have put discretionary spending on hold. Only 28 per cent of respondents said the economy has had no impact on their IT budgets.
IT departments in the financial services industry were hit hardest, with 49 per cent of IT shops in the financial services sector have cut their budgets. At the other end of the spectrum is the media, entertainment and leisure industry, where only 39 per cent of respondents said they have had to reduce spending.
In addition, specific regions are worse affected than others, with 49 per cent of North American firms having cut their IT budgets compared with 31 per cent of respondents in Europe, although these figures may have already changed since the report was published as the European market has further slumped.
"This is not an across-the-board spending slowdown; the impact of the economy on IT budgets varies widely by industry and geography," says Forrester Research vp and principal analyst John C. McCarthy.
"With regard to the services sector, the slowdown has firms renegotiating rates, being more selective in choosing vendors, and examining spending plans more thoroughly, but they are still expecting to pay more for services. The demand for enterprise IT services has not dropped significantly."