Survey of Surveys on IT Spend for 2009

Craig Roth posted his analysis in which he combines a multiple sources to come up with the Survey of Surveys on IT spend for 2009. You can see his article below and in his post entitled, "2009 IT Spending". 

We are currently doing research into how IT organizations are approaching communication, collaboration, and content management needs in a recessionary environment.  Since many of the technologies in this area don’t seem to be needed to keep the lights on or invoice customers, they have the potential to bear the brunt of the axe when cost cutting occurs. 

To start my research I wanted to find out what the forecasts were for IT spending this year.  Burton Group doesn’t do forecasting, so I used a survey of surveys approach to come to an unscientific consensus of spending (over- and under-weighting forecasts based on my read of their methodology and applicability to our target of large enterprises).  The results are shown below.

I think it’s fair to say there is a slight increase in IT spending expected for large enterprises, but this will be much lower than in previous years (perhaps lower than any year since the IT revolution).  It’s also fair to say that the increase will mostly be in developing economies, while the G7 is close to flat.

Some important comments are worth noting:

1. In some cases the difference in the forecasts is simply a difference in the underlying assumptions about the economy.  For example, Forrester said: “‘Our forecast for 2009 rests on the assumptions that the economic recession in the US and other major economies will start to end in the second half of 2009,’ explained Andrew Bartels, a vice president and the principal analyst at Forrester.”

2. Analysts and CIOs may not be thinking of the same definition of “IT spending”. To analysts, IT spending generally equals “sales”. For example, Goldman Sachs equates spending to hardware+software+services+networking. But to CIOs, they think in terms of IT budgets which include spending on internal employees, not just sales.  Most of these estimates are for spending “on” IT, not “by” IT, since they are targeted at IT vendors and service providers.  Some include consumer spending (The Economist and, from what I could discern of the wording, IDC).  Estimates may include telecom and networking.  The few estimates I could find that specified “budgets” (including internal employees) instead of “spending” forecasted flat (Computer Economics) or practically flat (+0.16% from Gartner) change over 2008.

3. Your results may differ.  There are strong differences by geography (emerging markets are predicted to do better than the U.S. and developed economies), locale (Michigan vs. total U.S. spending, Spain vs. Europe), and industry (government and healthcare are expected to lead the spending pack).

4. This year, forecasts must be fresh.  Usually the analysts publish estimates around September and that’s it for the year.  But this year, like lemmings, all the forecasts followed each other off the cliff sometime around September as they revised their estimates downward.  For example, Gartner revised downward from 5.8% to 2.3% and Forrester revised from +6.1% to -3%.  In general, the consensus forecasts pre-Sept ‘08 were about +3% compared to those starting with the October revisions.

Sources for recent forecasts: Computer Economics, Economist Intelligence Unit, Forrester(and here), Gartner and here), Goldman Sachs (full survey requires registration), IDC (andhere).