Global IT spending to rise very slightly in 2010 10 March, 2010 By Mark Cox

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The data certainly shows no sign of a return to boom times. While IT spending is trending upwards, however most increases -- and decreases as well -- will be slight, between 1% and 5%. Moreover, The vast majority of enterprises will continue to experience flat (0%) budget growth in 2010.

"The survey data, while promising, does not translate into an IT spending recovery," said Rhonda Ascierto, senior analyst at Ovum.

"Realistically, the numbers more likely reflect the effect of previously deep budget cuts, during 2008 and the first half of 2009, which left many IT departments operating at 'bare-bones' capacity," Ascierto said.

There isn't really any sign of momentum that shows that CIO's are confident enough in therecovery to start significant spending. The survey data shows that the proportion of CIOs that forecast slight decreases and significant increases in IT budgets remained unchanged from last year. And combined with the high percentage of respondents that will leave their IT budgets unchanged in 2010, which is rising slightly to 42%, it shows that many enterprises remain vulnerable and are uncertain about near-term business prospects.

Decision makers are typically adept at forecasting IT spending trends. Their predictions usually deviate 5% or less from actual IT budget expenditure. However, Ovum's survey shows that the perception gap between forecast and actual IT budget changes widened considerably last year, following the financial crisis of 2008.

"Clearly, the negative effects of the economic downturn were greater than expected and businesses were not prepared", Ascierto said.

"Many businesses made short-term cost savings by reducing their operational costs," she added.

"The extent to which IT budgetary expectations were miscued in 2009 is likely to mar the collective psyche of IT decision makers today," Ascierto said. "The confidence of CIOs in their ability to predict IT spending with a reasonable level of accuracy has been splintered, if not shattered.

"Consequently, Ovum believes that 2010 will be a year of reckoning for IT expenditure," Ascierto said.

IT projects that are most likely to be readily green-lighted are those that do not require a forklift upgrade of existing IT systems and business processes, but rather those that make modifications within existing and proven boundaries in an incremental manner and in response to business changes.