IT budgets flat as belt tightening continues through 2011

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IT budgets flat as belt tightening continues through 2011

Simon Quicke

IT budgets will not return to pre-recessionary levels this year remaining flat globally as customers look to continue savings money and consolidating their technology operations.

According to a global CIO study from Gartner the most optimistic forecast for budgets is a single digit rise and the UK was one of the hardest hit countries with CIOs expecting the money they have to play with to drop by 6.9%, which is much higher than the 2.7% and 0.2% declines anticipated in Germany and France.

Gartner does not see IT budgets returning to the pre-2008 levels until 2014 with most CIOs starting to operate more on a basis of redistributing costs they can prove have been saved through then more efficient use of IT.

As a result the hunt is on for technologies that deliver efficiencies and consolidation with cloud topping the charts followed by virtualisation.

The adoption of cloud services should be quicker than previously expected as the pressure comes down from board rooms to innovate but save costs.

"CIOs and IT have been boxed in between modest budget growth and growing legacy requirements," said Mark McDonald, group vice president and head of research for Gartner Executive Programs.

"New lighter-weight technologies, such as cloud computing, software as a service and social networks, and IT models enable the CIO to redefine IT, giving it a greater focus on growth and strategic impact. These are two things that are missing from many organisations," he added.

Rob Lovell, CEO at cloud provider ThinkGrid, said the Gartner research pinpointing the cloud growth was encouraging but there were still some issues for the channel to deal with.

"In the rush to take advantage of the cloud opportunity, big vendors will continue to send conflicting messages to their channel partners. It's becoming more and more critical for resellers to take a stand right now and combine their experience with vendor neutral cloud platforms to create far more compelling cloud offerings for customers," he said.



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