2009 IT spending slow not slashed

Global economic problems are impacting IT budgets, market-watcher Gartner reckons, but the IT industry will not see the dramatic reductions that were seen during the dot.com bust, when budgets were slashed from mid-double-digit growth to low single-digit growth.

Speaking at the analyst’s Symposium/ITxpo in Orlando, its senior vice president and global head of research Peter Sondergaard said: “In a worst case scenario, our research indicates an IT spending increase of 2.3 per cent in 2009, down from our earlier projection of 5.8 per cent: developed economies, especially the US and Western Europe, will be the worst affected; but emerging regions will not be immune”.

Europe will experience negative growth in 2009, the US and Japan “will be flat”, Sondergaard added; the events of the past two weeks will have an impact on IT budgets in the fourth quarter, but it will not change 2008 substantially.

The IT industry went through more dramatic reductions during, and after, the recession of 2001, when Sondergaard said, many lessons were learned: “In tumultuous times, CEOs want their executives and managers to be advisors and counselors, not just great implementers of directions given to them… Organisations now view IT as a way to transform their businesses, and adopt operating models that are much leaner.”

Other reasons that IT will not see more severe reductions include the fact that IT is now embedded in running all aspects of the business. The shift to multi-year IT programs aligned with business, and they are difficult to cut immediately; what’s more, Sondergaard explained, IT spending decreases lag the economy by at least two quarters.

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