Half of firms will freeze their IT budgets next year

Half of organisations are freezing their IT budgets next year, says analyst Datamonitor.

Half of organisations are freezing their IT budgets next year, says analyst Datamonitor.

The Datamonitor report "Technology Trends: Analysing Global Enterprise IT Budgets 2008" is based on a survey of 8,130 IT decision-makers at organisations worldwide.

The report reveals the majority of enterprises globally are planning to cut back increases in IT expenditure. The exception is the healthcare sector, which is planning to increase IT spending in 2009.

The report points out the downward trend is not solely due to the current economic climate. It has been evident over the last couple of years, said Datamonitor

"Suppliers should be wary in assuming that the recent downturn in IT budgets is a short-lived phenomenon," said Daniel Okubo, analyst at Datamonitor. "For the past couple of years enterprises have been cutting back IT budget increases as they adopt a more cautious viewpoint of the global economy."

Datamonitor says the report shows that for the fourth consecutive year the number of enterprises planning to significantly increase their IT budget has fallen. This suggests there are deeper concerns in the IT market than just the recent economic problems, said Datamonitor.

More than 50% of respondents said they expect to keep their IT budget the same in 2009, as it was in 2008. But 37% of respondents expect to see their IT budget increase in 2009, with only 13% anticipating actual IT budget cuts.

Retail and manufacturing industries are suffering from high interest rates, falling domestic demand, inflation and higher commodity prices. The healthcare industry is planning significant spending increases in 2009, with 57% of respondents in the industry saying they plan to expand IT expenditure.

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