IT Cost Cuts in 2008 May Be a Trend, Study Says

A first-quarter 2008 survey conducted by Computer Economics suggests a possible slowdown in IT spending and staffing lies ahead.

The group's analysis found that the growth rate in the median IT operational budget was four percent among its 2008 survey participants. That figure represents a decline from the five percent growth rate measured in 2007.

The four percent increase in IT budgets for this year "may prove to be optimistic," according to the report, because one in four IT executives say they don't plan to spend all of the money in their budgets.

The top priority for IT organizations in 2008 was "to improve IT service levels." In contrast, the 2007 response was "developing new systems." The report interprets this shift to indicate "a general softening in the focus on new systems and tighter attention on cost control."

The other top priorities for IT organizations in 2008 included risk management and disaster recovery, security, and lowering IT maintenance and support costs.

The report, "IT Spending, Staffing & Technology Trends 2008/2009," said it found indications of "a decidedly cautious mood among our survey respondents this year, in contrast to the optimistic tone in last year's survey."

IT spending per user was $6,667, representing a decline from $7,397 in 2007. The report's analysis suggests that this decrease in spending means that IT management is finding a way to get along with less.

"In other words, in today's weak economic conditions, IT managers are showing their ability to support an increasing number of users without corresponding increases in IT spending," the report states.

In terms of long-term capital IT spending, the report sees a drawback. The median IT capital spending for 2008 was flat, whereas it constituted a four percent growth rate in 2007.

Does all of this mean less hiring or layoffs? The report found that prospect to be a mixed bag, with 39 percent of respondents saying they are adding staff, 37 percent indicating no change in staffing and 24 percent planning to cut staff. However, outsourcing is on the rise among companies of all sizes, the report indicates. Respondents in organizations that have outsourced their software development work say they plan to increase outsourcing by 15 percent.

Computer Economics' survey was conducted from January to April, 2008. Respondents were IT staff knowledgeable about spending and staffing in the United States and Canada. Participants included "201 CIOs and senior IT management" in large, medium and small companies.

For access to the report or a free executive summary, go here.

About the Author

Kurt Mackie is online news editor, Enterprise Group, at 1105 Media Inc.

Featured

  • The AI Show

    Register for Free to Attend the World's Greatest Show for All Things AI in EDU

    The AI Show @ ASU+GSV, held April 5–7, 2025, at the San Diego Convention Center, is a free event designed to help educators, students, and parents navigate AI's role in education. Featuring hands-on workshops, AI-powered networking, live demos from 125+ EdTech exhibitors, and keynote speakers like Colin Kaepernick and Stevie Van Zandt, the event offers practical insights into AI-driven teaching, learning, and career opportunities. Attendees will gain actionable strategies to integrate AI into classrooms while exploring innovations that promote equity, accessibility, and student success.

  • cloud, database stack, computer screen, binary code, and flowcharts interconnected by lines and arrows

    Salesforce to Acquire Data Management Firm Informatica

    Salesforce has announced plans to acquire data management company Informatica for $8 billion. The deal is aimed at strengthening Salesforce's AI foundation and expanding its enterprise data capabilities.

  • stylized AI code and a neural network symbol, paired with glitching code and a red warning triangle

    New Anthropic AI Models Demonstrate Coding Prowess, Behavior Risks

    Anthropic has released Claude Opus 4 and Claude Sonnet 4, its most advanced artificial intelligence models to date, boasting a significant leap in autonomous coding capabilities while simultaneously revealing troubling tendencies toward self-preservation that include attempted blackmail.

  • NVIDIA DGX line

    NVIDIA Intros Personal AI Supercomputers

    NVIDIA has introduced a new lineup of AI-powered computing solutions designed to accelerate enterprise workloads.