In a survey of enterprise and SMB IT officials in North America and Europe, Forrester Research analysts find that companies are planning to reduce their IT operating and capital budgets by 1 to 4 percent as they manage their way through the global recession. New IT projects have been scaled back in favor of maintaining and running what already is in place, and enterprises and small and midsize businesses alike say improving IT efficiency and streamlining business processes are their top priorities.
Businesses big and small are paring their IT budgets in 2009 as they look to
ride out the global recession, according to analyst company Forrester Research.
In dual reports, Forrester analysts Andrew Bartels and Heidi Lo found that enterprises
and small and midsize businesses in North America and Europe
are cutting IT operating and capital budgets, cutting back on technology
initiatives, and looking to improve both IT efficiency and business processes.
The reports, dated Aug. 7, were rolled out by Forrester Aug. 18.
According to the analysts, North American enterprises-those companies with
1,000 or more employees-are expected to reduce their IT operating and capital
budgets each by 3 percent. In Europe, these larger
companies are looking to cut operating budgets by 2 percent and capital budgets
by 1 percent.
In both markets, SMBs are expected to cut IT operating budgets by 4 percent
and capital budgets by 2 to 3 percent.
Much of the focus of IT spending will be on operating and maintaining the IT
infrastructure these businesses have rather than funding new IT initiatives,
IT officials of both SMBs and enterprises said they expected 2009 to be a financially
"When this 2009 budget survey was fielded between February and May of
2009, SMBs revealed a glum business outlook for 2009: 49 [percent] believed
that 2009 would be a somewhat challenging year, with an additional 34 [percent]
foreseeing an extremely challenging year," Bartels and Lo said in their
SMB report. "As a result, SMBs are planning to prune their IT operating
and capital budgets for 2009."
The percentages were similar for enterprises, according to Forrester.
A slightly larger percentage of surveyed enterprises and SMBs in North
America than in Europe said they were
lowering their IT operating and capital budgets, and all said they were cutting
back on hardware and software spending. Responses on spending on services and
outsourcing were mixed, Forrester said.
For SMBs, software spending would focus most on security, while server and
networking would be the top focus in hardware spending. For enterprises,
information management would be the top priority in software spending, while
networking equipment-which is getting a lot of attention as vendors like Cisco
look to offer more holistic data center solutions-would be the focus in
Bartels and Lo said they expected enterprises to be more willing to cut IT
jobs than SMBs, while salaries were expected to remain level.
In addition, more enterprises and SMBs said they were more carefully
tracking IT energy costs and expected to find ways to lower them in 2009.