Planned IT budgets infuse confidence in enterprises

New Delhi: Despite the fact that enterprises globally are planning on keeping their IT budgets flat and there will be no growth in 2009, a new report by market analyst firm Datamonitor revealed that in some countries, enterprises are much more confident about their future outlook with planned IT budget increases outstripping IT budget decreases. Titled 'How Will IT Budgets Hold Up in 2009', the report also goes on to reveal that even in the industries worst affected by the downturn, there are opportunities for technology vendors.

“It is clear there has been a noticeable decline in enterprise confidence. However, the findings are not as negative as might have been expected,” said Daniel Okubo, Technology Analyst, Datamonitor and author of the report. “Despite the rise in the proportion of IT budgets which are remaining flat, there are still a sizable proportion of enterprises which are planning to increase IT expenditure. Technology vendors should be keenly aware that the economic conditions of a country directly impacts enterprise IT budgets,” he added.

Datamonitor surveyed 520 IT decision makers towards the end of 2008 to gain an understanding of how enterprises are reacting to the global economic crisis, and to gauge their confidence levels.

Across all of the 14 countries surveyed in the second half of 2008, there was a rise in the proportion of planned IT budget decreases compared to a similar survey conducted in the first half of 2008. The percentage of IT decision makers who plan to decrease their IT budget significantly in 2009 has risen to eight percent from three percent, over the last six months.

Confidence is lowest in the UK, France and Italy, the proportion of respondents planning to decrease their IT budget in these regions outweighs those that are planning to increase their IT budget in 2009. Noticeably, there is also a significant proportion of enterprises in the US and Spain that are planning IT budget decreases. All these economies are expected to project negative GDP growth in 2009.

Despite the bleak outlook for some countries, enterprises in Benelux, Nordics and Australia appear to be much more confident about their future outlook with planned IT budget increases outstripping IT budget decreases, as per the study. These economies are expected to be less affected by the economic downturn, with the exception of Iceland, and this is reflected in Datamonitor's findings.

Even in the industries which have been the worst affected by the downturn such as manufacturing and retail banking, there are opportunities for vendors who understand enterprise requirements in a downturn.

“Datamonitor's survey reveals IT budgets have been hit the worst in developed economies which are falling into a recession. Although there is a noticeable correlation between an economies' future outlook and projected growth in enterprise IT expenditure, there are opportunities in every vertical market if vendors understand enterprise requirements. Enterprises are more interested in raising efficiency than cutting costs. Technology vendors should tailor their sales and marketing to address the specific needs of the enterprises they are targeting, while taking into account the economic conditions they are operating in,” Okubo concluded.