Tuesday, 21 October 2008

IT Spending to Slow in ’09 but, Continued Growth can be Expected

Whilst global economic problems are impacting IT budgets, 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...

Whilst global economic problems are impacting IT budgets, 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, says leading information technology research organisation Gartner.

“In a worst case scenario, our research indicates an IT spending increase of 2.3 percent in 2009, down from our earlier projection of 5.8 percent,” said Peter Sondergaard, senior vice president of Gartner and global head of Research.

“Developed economies, especially the United States and Western Europe, will be the worst affected, but emerging regions will not be immune. Europe will experience negative growth in 2009, the United States and Japan will be flat.”

According to Sondergaard, 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.

“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 Sondergaard.

“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.”

According to Gartner, organizations 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:

• IT is 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

• IT spending decreases lag the economy by at least two quarters