October 13th, 2008

Gartner's worst case for 2009 IT budgets isn't so bad

Posted by Larry Dignan @ 5:56 am

Categories: Datacenter, Gartner Symposium, Gartner Symposium 2008, General, Hardware Infrastructure, IT Management, Innovation, Offshore outsourcing, Outsourcing, Software Infrastructure

Tags: IT Budget, Information Technology, Gartner Inc., Strategy, Management, Larry Dignan

Gartner has revised its 2009 IT budget prognostications, a move that isn’t surprising, but the firm’s projections could be a lot worse.

Peter Sondergaard, senior vice president of research at Gartner, outlined the research group’s new projections in his opening keynote at the Gartner Symposium ITxpo in Orlando (all posts and the firm’s Twitter feed). Gartner’s opening keynote is an analyst relay that is part sales pitch and part pep talk to urge technology managers to innovate, manage through tough times and be aligned with the business better.

The meat of the talk, however, was the downturn. The upshot:

• Gartner had expected budgets to grow 3.3 percent in 2009.
• Now the most likely case is IT budget growth of 2.3 percent to 0 percent;
• The worst case is that IT budgets will be down 2.5 percent.

While Sondergaard noted all of the gloom and doom, he said information technology execs are most suited for this upheaval. Why? IT folks have already been through this–has anyone really forgotten 2001 to 2003?

His overall message is that IT has options. Sure, it would be silly to think that budgets written two weeks ago are going to stick. As for overall technology spending, financial services customers, the public sector, retail and manufacturing are all likely to curb spending.

However, Sondergaard said budgets aren’t likely to totally collapse. “IT is embedded in your business now. You can’t invoice somebody without IT,” he said. Sondergaard also noted that Western Europe has the worst IT spending outlook, but Asia Pacific will still grow at a healthy clip. North America looks flattish.

Overall, Sondergaard said technology execs need to do two things. Focus on disruptive technologies that can cut costs and think like your CFO. Here are Gartner’s top 10 disruptive technologies:

1. Multicore and hybrid systems
2. Virtualization and fabric computing
3. Social networking
4. Cloud computing
5. Web mashups
6. User interface
7. Ubiquitous computing
8. Semantics
9. Augmented reality
10. Contextual computing

Of those technologies the first four will fit best with the budget you have. The latter ones are projects to ponder in the future.

And here are Gartner’s top 10 recommendations for managing through an economic crisis.

1. Reduce headcount or freeze hiring
2. Renegotiate with technology and service providers
3. Curtail data center expansion, virtualize assets and lease them back
4. Consolidate systems
5. Outsource commodity
6. Offshore outsource
7. Investment shutdown
8. Prioritize projects
9. Mothball businesses and projects
10. Change leadership and restructure IT teams

Also see: Forrester cuts 2009 IT spending projections