Menu
IT spending 'not on the rebound'

IT spending 'not on the rebound'

CIOs lose confidence in predicting IT budgets

The "vast majority" of IT budgets will not grow this year, said analyst house Ovum.

Only a third of CIOs globally expect their budgets to grow in 2010, according to Ovum's new survey of chief information officers, and 42 percent will leave budgets unchanged. Last year, four in 10 businesses in the UK and Italy reduced their IT budgets.

The findings agree with those of TechMarketView, which predicted that UK software and services spending will decline this year. But they conflict with Forrester's recent report, which said that the IT spending downturn was over.

However, the survey found that while spending is on an upwards trend, with one third of CIOs expecting their budgets to increase in 2010, most increases will be between just one and five percent.

Spending patterns varied greatly in Europe. While budgets fell for 40 percent or more of respondents in the UK and Italy from 2008 to 2009, they rose for four in 10 CIOs in France.

"This mirrors the respective business environments of these countries," said Rhonda Ascierto, senior analyst at Ovum. "France and Belgium emerged from recession before the UK and Italy."

Ascierto said that CIOs in the UK are waiting for signs of growth in the economy before they begin to spend on IT to further business growth.

"Recession concerns linger in the UK. The country is reeling from high unemployment and substantial public debt that have been precipitated by the economic downturn. Enterprises are responding by continuing to cut IT budgets by as much as possible.

"Scotland's employment and economic indicators have outperformed the rest of the UK during the recession, yet its recovery is pegged as modest and general business optimism remains tepid. Northern Ireland has also emerged from a recession, yet economic activity levels remain weak," she said.

Meanwhile, the recession has had an effect on the accuracy of CIOs' forecasts of IT spending.

Ovum found that normally, CIOs are fairly accurate with predicted spend at around 5 percent or less from actual spend. However, this gap has widened "considerably" in 2009.

"Clearly, the negative effects of the economic downturn were greater than expected and businesses were not prepared," said Ascierto.

According to Ovum, IT projects most likely to be easily "green-lighted" are those that do not require a large upgrade of existing IT systems and processes and those that make changes within existing boundaries, in increments, and in response to business changes.

Ovum surveyed 529 IT decision makers in the second half of 2009 for the report.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Featured

Slideshows

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

More than 500 channel leaders gathered in Auckland on 21 October at the ​Reseller News Innovation Awards ​2020 to celebrate the achievements of the New Zealand technology industry's top partners, start-ups, vendors, distributors and individuals.

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners
Meet the winners of the 2020 Reseller News Innovation Awards

Meet the winners of the 2020 Reseller News Innovation Awards

Reseller News honoured the standout players of the New Zealand channel in front of more than 500 technology leaders in Auckland on 21 October, recognising the achievements of top partners, start-ups, vendors, distributors and individuals.

Meet the winners of the 2020 Reseller News Innovation Awards
Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Show Comments