IT budgets defy downturn in some regions

Most enterprises globally are keeping IT budgets flat and there will be no growth in 2009, according to a report by analyst Datamonitor: however, in some countries, enterprises are confident about their future outlook, with planned IT budget increases outstripping IT budget decreases.

Datamonitor surveyed 520 IT decision makers towards the end of 2008, to gain an understanding of how enterprises are reacting to the global economic crisis, and to gauge their confidence levels. The report - ‘How Will IT Budgets Hold Up in 2009’ - also suggests that even in the industries worst affected by the downturn, there are opportunities for technology vendors.

Across all of the 14 countries surveyed in the second half of 2008, there was a rise in the proportion of planned IT budget decreases compared to a similar survey conducted in first half of 2008. The percentage of IT decision makers who plan to decrease their IT budget 'significantly' in 2009 has risen to 8 per cent from 3 per cent, over the last six months (to March 2009).

Confidence is lowest in the UK, France, and Italy, the report found. In these countries the proportion of respondents planning to decrease their IT budget exceeds those that are planning to increase their IT budget in 2009. There are also a significant proportion of enterprises in the US and Spain that are planning IT budget decreases.

Unsurprisingly, all these economies are projected negative GDP growth in 2009. Despite the bleak outlook for some countries, enterprises in Benelux, Nordics, and Australia appear to be more confident about their future outlook, with planned IT budget increases again outstripping IT budget decreases. These economies are expected to be less affected by the economic downturn, with the exception of Iceland, and this is reflected in the report’s findings.

 “Despite the rise in the proportion of IT budgets which are remaining flat, there are still a sizable proportion of enterprises which are planning to increase IT expenditure,” says Daniel Okubo, technology analyst with Datamonitor. “Technology vendors should be keenly aware that the economic conditions of a country directly impacts enterprise IT budgets.”

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