Users rein in IT budget increases

Large organisations lead the way in belt tightening

Large organisations are pulling in the reins on IT spending growth, according to a Computer Economics survey of 125 IT decision-makers in the US and Canada. Although 66 per cent of respondents expected budget increases next year, the size of those increases -- only 2.5 per cent at the median -- were relatively conservative when compared to the rising growth rates over the past three years.

"If these expectations prove accurate, this will be the lowest rate of growth in IT spending since 2004," said Frank Scavo, president of Computer Economics.

The survey results (a year-end update of the company's annual IT Spending, Staffing and Technology Trends study) indicated that spending overall held up well this year against the planned five per cent growth in IT spending for 2007. However, among large companies, there were signs of cutbacks -- 33 per cent said they will spend less than budgeted, while only 22 per cent indicated they will spend more.

Looking toward 2008, companies are anticipating smaller budget increases. Large organisations, again, were the most conservative. The median anticipated budget increase was two per cent for large organisations.

"Our survey data indicates that IT executives have already scaled back their expectations for IT spending increases in 2008. If economic conditions worsen, we expect that median IT spending increases in 2008 will be flat compared to 2007," Scavo said. "We do not yet, however, see widespread IT spending cuts in 2008."

Len Rust is publisher of The Rust Report.

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