Tech Turnaround Ahead

Corporate IT spending is likely to start rising in 2010, albeit modestly.
David McCannDecember 16, 2009

Companies are continuing to clamp down on information-technology spending as the year comes to a close. But 2010 will see them make a small step toward more-robust budgets after a year of budget cuts, layoffs, and delayed projects.

That’s according to consulting firm Computer Economics, which surveyed 139 U.S. and Canadian IT organizations in November. Asked whether they had made changes to their IT operational budgets in the prior three months, 29% said they had trimmed them, compared with 19% that had slated more spending. The situation is expected to reverse next year, as 52% of the survey respondents said they will increase their budgets while 16% plan to make do with less.

Despite that wide spread, the purse strings won’t be loosening all that much, as the median respondent forecast just a 2% increase in spending. That’s lower than the 2.5% median IT spending hike in 2005, the first year of recovery for the technology sector following the previous recession, said Computer Economics.

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On the staffing front, only 7% of the organizations plan to make cuts in 2010, while 39% expect to add new positions. But as with the overall budget, the hiring of IT workers is not likely to be substantial. Even companies at the 75th percentile in terms of projected staff growth next year will increase their IT head count by only 5%, the study found.

“IT executives are prepared to make mid-year adjustments up or down based on the strength of the recovery, but right now we see a year of stabilization in IT spending and staffing,” said Computer Economics president Frank Scavo in a press release.