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Gartner: IT budgets squeezed further

David Meyer ZDNet.co.uk

Published: 08 Jun 2009 13:59 BST

Almost half of chief information officers worldwide spent less on IT in the first quarter than they had planned, according to a Gartner survey.

In the Gartner report, released on Monday, 46 percent of CIOs said their 2009 IT budget had changed since it was finalised. In that group, more than 90 percent had made an average reduction of 7.2 percent in the first quarter.

"CIOs reported that renegotiating vendor contracts and head-count reductions were the primary focus areas for accommodating budget reductions," Gartner group vice president Mark McDonald said in a statement. "CIOs report shifting more work to in-house resources and delaying capital expenditures, more than reducing IT project investments."

Gartner surveyed CIOs from September to December last year about their spending intentions for the first quarter of 2009, and generally found predictions of mainly flat IT spending, with a minor increase of 0.16 percent.

The new survey, conducted over March and April this year, found budgets had declined by a weighted average of 4.7 percent as a result of wider economic woes.

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Last year's survey had more than 1,500 responses, while the new research covered around 900 CIOs. Fifty-four percent of respondents to the latest survey reported no change in their IT budget, and four percent reported an increase.

The professional services, telecommunications and high-tech industries saw the biggest cuts in tech spending, at 10 percent. IT budgets in the manufacturing industry fell by around eight percent, and the utilities and financial services industries saw drops of around four percent.

Most CIOs say further cuts this year are unlikely, Gartner reported. Respondents said they were hoping for an economic recovery between the first and third quarters of 2010. If and when this happens, they expect IT investment projects and workforce increases to be their first investments.