Sign up today and take advantage of member-only content — the kind of timely, cutting edge industry insight that only Money Management Executive can deliver.
  • Exclusive Online Only Content
  • Free Daily Email News Alerts
  • Asset Management Blogs

I.T. Spending is About to Grow Again. Right?

The date was October 13, 2008. One month after Lehman Brothers was left to twist quickly in the wind and die.

And here's what the top consultancy in the information technology had to say about spending by large enterprises on the digital engines behind their growth or lack of same.

"Global economic problems are impacting IT budgets, however, the IT industry will not see the dramatic reductions that were seen during the bust ... In a worst case scenario, our research indicates an IT spending increase of 2.3 percent in 2009, down from our earlier projection of 5.8 percent.''

Speed forward to October 19, 2009. Here's what Gartner had to say, a year later:

"The I.T. industry is exiting its worst year ever, as worldwide IT spending is on pace to decline 5.2 percent. Worldwide enterprise IT spending will struggle more, with IT spending dropping 6.9 percent. The IT industry will return to growth with 2010 IT spending forecast to total $3.3 trillion, a 3.3 percent increase from 2009.''

So, as you gather for today's be forewarned: I.T. spending is a lagging indicator of economic conditions. If we're heading into a second credit-crisis-related recession, you won't see any signs of it when you look at technology officers' spending plans. They're entirely dependent on outlook for the company and the economy as a whole.

So when you arrive at 10:30 a.m. for today's Chief Information Officers' Roundtable at the National Investment Company Service Association's 29th Annual Conference & Expo, don't be misled by the general positive nature of I.T. spending forecasts from Garnter, IDC, Celent and Computer Economics. It's easy to predict growth; and, in their forecasts, you see only a dispute in the degree of same.

Somehow, some time, it will be more useful to get the call that says times will be worse than they are now.

But given what firms have been through since October 2008, it's easy to say, now is not the time.

Don't be surprised, however, if the message is this: efficiency and cost-saving still trump innovation, if you're going to get budget approval for new tech spending.

Take the sure bucks. Rather than the potential bucks. Because, in a worst case scenario, there will be no one to sell the innovation to.

Even now.