2010 Outlook: Increase in IT Budgets is Broad but Not Deep
In November of this year the staff at CIO Update conducted its annual fourth quarter survey of IT executives in an attempt to get some sense of the coming year’s economic activity. This year the survey included executives in 139 companies in the US and Canada. From the results it appears that the doldrums of 2009 may be replaced with cautious optimism for 2010 (VERY cautious optimism). The survey asked questions such as whether the surveyed companies had made any changes to their in IT Budgets during the last quarter, increases, decreases, or no change. Another question put a slightly different spin to the IT budget inquiry and asked were there any anticipated changes in the coming years IT Budgets. The article posted December 17, 2009 by the CIO Update staff entitled The IT Spending Recession is Over presents the answers to these survey questions in print and in pie chart form as well so the reader can try to put the responses into perspective. While 19% had increased their IT Budget spend for the last quarter as compared to only 11% last year, 29% answered that they continued to reduce their expenditures as compared to 35% from last year’s survey.
Two interesting observations by the CIO Update staff center around their section entitled “Signs of Hope” and also the breadth of the recovery. The CIO Update research has 20 years of data to lean upon, particularly in the response to “Expectations for Change in the IT Operational Budget” category. The results shows 52% of the IT executives expect an increase in their 2010 budgets. 
Historically, the CIO Update data indicates a recession when that expectation number drops below 50%. So it appears that the trend may indicate that we’ve turned the corner. However, the anticipated amount of those budget increases is not large and hovers around 2%.
A rosy economic picture for the 2010, I think not. However, it is not bleak either. From an amateur economist at best, your humble blogger’s opinion is that the capitalist business model is cyclical and that an economic recovery is inevitable. I think some intangibles would be the uncertainty of the current administration’s spending plans and the affect they will have on any recovery. And there always is the looming Federal Reserve and whether their policies will allow for further growth as the inflationary effects of their 2008 – 2009 monetary policy have as yet to be manifested. The issues not discussed in this CIO Update posting may be addressed in its complete version Outlook for IT Spending and Staffing in 2010. This full version of the report “provides 2010 forecasts for IT operational spending, IT capital spending, and IT hiring, both for the composite sample and by organization size”.
Is the worst behind us? That remains to be seen.
