April 04, 2008

European CIOs plan increase spending while US tightens belts

For every one CIO increasing spend there are two or three cutting costs

By Denise Dubie

US CIOs intend to cut their 2008 IT budgets while European and Asian companies plan for IT spending growth, according to survey results from Gartner released Thursday.

Gartner surveyed more than 1,000 CIOs in February and March to determine whether the news of an economic recession had had an impact on their forecasted IT spending for 2008. While the research group continues to forecast 3.3% growth in global IT budgets, Gartner now is revising US budget increases for 2008 down from 3.1% to 2.3%.

According to Gartner, one in four CIOs experienced a budget reduction in the first quarter, 65% experienced no change and 10% reported increases.

"US budget growth rates continue to be positive, but we have revised the number because we have seen softer growth in the US," said Mark McDonald, group vice president and head of research for Gartner Executive Programs, in a press teleconference. "The reason we believe IT budget growth will remain stable globally at 3.3% is because Europe and Asia/Pacific are experiencing accelerated and additional growth."

In other words, for every one US CIO increasing the budget, two or three are decreasing their IT spending this year. In Europe, however, IT budgets continue to grow above the global average, Gartner reports, at a rate of 3.86%; and budgets in Asia/Pacific outpace both regions, with increases along the lines of 5.98%. McDonald said that CIOs in those regions see the budget-cutting as an action specific to the United States.

"The current economic conditions when viewed from outside of the US are seen as a US-only phenomenon," McDonald said.

Now read:

Slash your IT costs now, says Gartner

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