Analysts: Are IT organizations slowing down spending?

By Jacqueline Emigh, BetaNews

April 28, 2008, 12:35 PM

The year 2008 is shaping up to be a time of cutbacks on overall enterprise IT spending, according to a new study from IDC, which also points to infrastructure improvements and application modernization as the focus of IT.

In interviews with 27 CIOs and senior IT leaders, IDC found that many IT
organizations are already reducing spending. About half of the survey's participants pointed to "an existing negative impact on the budgets from the economy." The other half said their organizations haven't felt a negative impact yet, but are anticipating a negative impact in the future.

In related results, about 70 percent of the executives indicated a movement in
their organizations toward more centralized IT funding, partly for better
efficiency and control.

Moreover, infrastructure improvements such as virtualization and consolidation -- of data, applications, and data centers -- were mentioned as priorities for achieving lower costs and higher performance.

A total of 25 of the 27 of the interviewees said they were engaged in some
sort of modernization, in many cases around aging, industry-specific
applications.

Also in IDC's study, the IT executives said they are faces skill shortages across a wide range of areas: SAP, .NET, VoIP, Java, business analysis, security administration, and project management.

An analyst at Forrester Research, on the other hand, has predicted that Web 2.0 tools and technologies will be a "boon to vendors" in 2008.

"However, most buyers will start slow and are interested in just one or two pieces of functionality, such as wikis or RSS," according to analyst G. Oliver Young's executive summary. "Very few of the businesses planning to adopt Web 2.0 tools see the technology itself as a priority in 2008; instead, most plan to focus on business problems, such as application integration and collaboration platform deployment."

Also according to Forrester's Young, enterprise spending on Web 2.0 technologies will grow strongly over the next five years to reach $4.6 billion by 2013, with social networking, mashups, and RSS capturing the lion's share of the market.