European IT budgets will grow just 1.6% this year, compared to 2.9% last year, suggests a report by Forrester Research.the analyst.
More than half of companies surveyed will actually cut their IT spending. UK firms will have a little more cash to play with than continental Europe, as IT heads expect spending to grow by 2.3%. But only 20% of this budget will be freed up for new projects.
Security, anti-virus and host intrusion detection will be priority spending areas. And IT service providers will feel the pinch, as nearly half the European firms interviewed by Forrester plan to reduce service costs.
Big traditional players such as Cisco, Hewlett-Packard, IBM, Microsoft, SAP and Oracle will soak up most of the spare cash left over for new development investments. This budget squeeze is strangely out of sync with the respondents’ optimistic views of their own industries. Some 60% expect the next year to be a good one for their markets.