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Volume 19, Number 35 -- October 4, 2010

IT Managers Tell Gartner Their Budgets Are Up 1.1 Percent in 2010

Published: October 4, 2010

by Timothy Prickett Morgan

The prognosticators at Gartner have lowered their IT spending projections for 2010 based on surveys of C-level executives at some 1,600 companies. But only a smidgen.

When the executives were polled back at the end of 2009, the weighted average rise expected in 2010 across all of the companies was an increase in IT spending of 1.3 percent. This came on the heels of an average 8.1 percent decline in spending in 2008 across these same companies. In a survey that ran from June through August, Gartner talked to the same execs and found that, on average, spending growth is expected to be around 1.1 percent in 2010.

"Economic conditions are changing CIO spending priorities as the need to upgrade infrastructure is being appropriated from reduced operating budgets," explained Mark McDonald, group vice president and head of research at Gartner Executive Programs, in a statement accompanying the projections. "Commercial and public sector CIOs plan to increase capital expenditures by 3 percent this year and pay for that increase with a 1.3 percent cut in operating budgets. CIOs felt they could no longer delay infrastructure upgrades and other capital investments and they funded them at the expense of operating budgets."

The one new trend is that IT budgets are becoming more fluid, a necessity in rapidly changing economic conditions. IT budgets for the next year are usually finalized in the fourth quarter of the preceding year, and 49 percent of those polled said they still do it that way. But in 2010, 26 percent did not do so until the first quarter and 11 percent said they don't finalize a budget at all, but react to business conditions.

In some good news for the IBM midrange, Gartner's surveys are finding that IT budget growth is stronger among SMBs than among larger enterprises. While no one is saying this, I happen to believe that large enterprises, who often have one, two, or three of everything, are finding that they simply can't afford to be so eclectic in their IT tastes any more. SMBs could never afford to do this, of course.


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