Consolidation Bringing IT Budgets Down in 2008

• By Becky Nagel
• 04/29/08

Information technology executives are focusing on cutting costs rather than investing in technology this quarter, according to a report released this week by research analysts at IDC.

IDC conducted in-depth interviews with 27 U.S.-based chief technology officers and other "senior" IT executives, and found "a significant shift towards cost reduction...as a response to the economic downturn," according to a released statement from Henry Morris, senior vice president of Software and Services Research at IDC.

According to a summary of the study, more than half of the executives interviewed said that their IT budgets had already been "negatively impacted" by the current economic downturn, with the rest "expecting a negative future impact." More than two-thirds also said that their funding is"moving back to being more centralized...in part for better control and efficiency."

To help control costs, IDC said that many of the executives interviewed are turning to technologies like virtualization and "application consolidation." According to the summary, 25 of the 27 IT executives interviewed are also focused on modernizing their company's legacy applications and architectures.

And while the executives interviewed said they are in need of Java, .NET, VoIP and SAP skills, as well as security and project management expertise, they are "very open to acquiring these skills externally."

A complete copy of the survey is available from IDC here.