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A global economic slowdown is eating into corporate IT budgets, with more than 40% of large enterprises now saying they have trimmed their technology spending this year, according to a just-released report from Forrester Research.
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By Mel Duvall
A global economic slowdown is eating into corporate IT budgets, with more than 40% of large enterprises now saying they have trimmed their technology spending this year, according to a survey released Tuesday, Sept. 9, by Forrester Research.
The Cambridge, Mass.-based research firm says the survey is the latest evidence that the technology sector is not immune to the effects of the economic slowdown. Surveys by several research firms earlier this year indicated that the tech sector might be spared some of the pain being felt by other sectors, but now it appears clear that the technology sector is also taking its lumps.
Forrester says it surveyed 950 senior IT managers across North America and Europe in regards to their spending plans and IT priorities. It found that 43% of firms have already cut their overall IT budgets in 2008 in reaction to the sputtering economy, while 24% have put discretionary spending on hold. Twenty-eight percent of respondents say the economy has had no impact on their IT budgets.
Some regions and sectors are being hit harder than others: 49% of North American firms have cut their IT budgets, compared to 31% in Europe. Forrester noted, however, that the survey was conducted in the second quarter of 2008, prior to a marked deterioration in economic conditions in Europe.
"This is not an across-the-board spending slowdown; the impact of the economy on IT budgets varies widely by industry and geography," says Forrester principal analyst John McCarthy.
The IT services sector is particularly feeling the strain. When asked how the economy would affect IT services spending, 70% of respondents said they will aim to negotiate lower rates with suppliers, while 16% said they have already cut their IT services spending.
"The slowdown has firms renegotiating rates, being more selective in choosing vendors, and examining spending plans more thoroughly," says McCarthy.
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