IT Spending Flat in 2009

Computer Economics reports zero growth in IT spending in 2009

IT operational spending growth peaked in 2007 at 5.0% and then declined this year to 4.0%. As reported earlier in this study, however, a significant number (41%) of respondents do not expect to spend all of the money budgeted for this year, which means that the 2008 growth rate will almost certainly fall short of the budgeted 4.0% rate. That pessimism extends into 2009.

The news is even worse: Not only do more companies expect spending cuts in 2009 than increases, but many organizations have spent–or plan to spend–less than their budgets in 2008. It also means that in fixed dollar terms, IT spending will be down 3-4%.

IT spending is now a microcosm of the economy as a whole. The best and worst of expectations of Information Technology have been removed from C-suites, which means IT spending is more grounded in actual business performance. This is good, in that we don’t expect IT spending to underperform the broader economy, as we saw in the 2001/2002 recession, but it also means outlandish ideas of IT-derived productivity will not buffer IT from the current recession either.

In a nutshell, IT investments are more closely aligned with business requirements, which is a major goal of good IT governance.