IT spending for 2012 remains static

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IT spending for 2012 remains static

Karl Flinders

Less Western European businesses are increasing their IT spending this year as confidence wanes, according to analyst firm IDC.

IDC surveyed 590 businesses across Western Europe at the end of last year. The survey found that 60% are either planning to keep budgets the same or reduce them.

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According to IDC 40% of the businesses questioned will increase IT budgets while 43% will keep them the same and 17% will reduce them.

Of the businesses increasing IT budgets a quarter, some 10% of the total, will increase budgets by more than 5%.

A similar survey by IDC in early 2011 revealed that 46% of businesses were planning to increase IT budgets with 14% planning to reduce them. Douglas Hayward, research director, IDC European services research, says, “These spending plans may seem optimistic at first sight, given the economic environment, but in fact total external IT spend budgets for 2012 are well down on the equivalent budgets for 2011.”

According to IDC actual budgets in 2011 were lowered with 43% of businesses increasing IT budgets and 20% reducing them. “European organizations on average cut back their IT spend during 2011 from the levels they had planned at the beginning of the year.” This was in response to “lowered consumer and business confidence and to the progressively worsening economic outlook during the year.”

Hayward says that IT budgets are being set almost in line with actual spending last year.

"This will be a conservative year in which discretionary spend will be held to a minimum for most organizations," said Hayward. "The impact is not necessarily dramatic in real terms, however, since 2012 budgets are not significantly down on the actual spend outcomes during 2011.”

“So the bottom line is that 2012 is shaping up to be like late 2011 — only a bit worse."

A study of 2,300 CIOs for the Gartner Executive Program, last week revealed that global CIO IT budgets will remain flat, increasing just 0.5%, with declining IT budgets in North America and Europe.


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