Gartner Revised Take on 2009 IT Budgets: Too Rosy?

Check out this article on SeekingAlpha, entitled Gartner’s Worst Case for 2009 IT Budgets Isn’t So Bad. It covers a speech made by Gartner SVP Peter Sondergaard at Gartner’s annual Symposium / ITExpo show, this week in Orlando.

Excerpt:

The meat of the talk, however, was the downturn. The upshot:

  • Gartner had expected budgets to grow 3.3 percent in 2009.
  • Now the most likely case is IT budget growth of 2.3 percent to 0 percent;
  • The worst case is that IT budgets will be down 2.5 percent.

Now, given the craziness in the markets (see Paul Kedrosky’s latest Weekend Reading) and given recent vendor announcements (e.g., SAP’s Q308 commentary) and rumors (e.g., that SAP may cut up to 25% of its salesforce during 4Q08), this strikes me as rather optimistic. After all, isn’t the financial industry alone something like 20% of aggregate IT spending? While I’m sure some vendors will find opportunity in the wreckage (and we might be one of them, think FpML derivatives repositories), surely total financial sector IT spending will go down in 2009.

The Gartner argument seems to be that IT is so embedded in your business that you can’t just slash it — in essence, that IT is increasingly becoming fixed, non-discretionary spending. If it proves true, that would certainly be nice for Silicon Valley.

As for what CIOs should do going forward:

Sondergaard said technology execs need to do two things. (1) focus on disruptive technologies that can cut costs and (2) think like your CFO. Here are Gartner’s top 10 disruptive technologies:

  1. Multicore and hybrid systems
  2. Virtualization and fabric computing
  3. Social networking
  4. Cloud computing
  5. Web mashups
  6. User interface
  7. Ubiquitous computing
  8. Semantics
  9. Augmented reality
  10. Contextual computing

I think it’s a good list of disruptive technologies, and here are a few additions / comments.

  • Virtualization and hybrid systems are great topics because, to me, they’re ultimately about efficiency, cost, (and in turn) green-ness.
  • I think enterprise social networking, and more broadly, enterprise 2.0 (and governement 2.0 a la Intellipedia and A-Space) are all good initiatives. In the end, these also drive productivity and cost, provided they work.
  • If cloud computing means use SaaS where indicated, I’m on board. If it means enterprise cloud computing (in the sense that central IT builds internal cloud services on which divisions rely ), then I’m also on board. If it means something else, then count me in with unlikely bedfellows Larry Ellison and Richard Stallman.
  • At MarkLogic, we’re all about semantics and contextual computing, so I*love* that they are on the list. Represent the semantics in XML and building the conextually aware applications in XQuery, we say.

4 responses to “Gartner Revised Take on 2009 IT Budgets: Too Rosy?

  1. After the list of 10 disruptive technologies there is a comment in the article which goes like this,Of those technologies the first four will fit best with the budget you have. The latter ones are projects to ponder in the future.

  2. I presume that’s Seeking Alpha talking and not Gartner, else making of list of 10 saying disregarding 6 would appear, uh, illogical.

  3. Speaking of Gartner, did you see that they have labelled Microsoft “Top Enterprise Search ‘Leader'”http://rcpmag.com/news/article.aspx?editorialsid=10278Seems kind of premature as the dust hasn’t really settled on the MS – FAST deal…

  4. To the extent that IT spend stays fixed even during a downturn, it is an unfortunate result of clinging to legacy investment strategies for sourcing technology. By switching wherever possible to SaaS and open source based solutions, you maximize the variable cost aspect of IT spend. More on this posting: http://blogs.ingres.com/dougharr/

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