IT spending steady and strong for 2008, survey says

Despite concerns about a U.S. economic recession,  more than three-fourths of 1,000 IT professionals surveyed say their IT budgets will remain steady throughout 2008 and 55% of those report plans to increase IT spending.

The survey, conducted between January and March by Enterprise Management Associates (EMA), asked nearly 1,000 IT professionals their plans around maintaining, increasing or decreasing their IT spending in 2008. The results showed a majority do not have plans to cut IT spending amidst talks of a U.S. economic recession.

"There has been a lot of concern that IT spending may be negatively impacted this year due to recent economic concerns, such as the sub-prime mortgage collapse," said Scott Crawford, EMA research director, in a company statement releasing the survey results. "However, along the lines of several other technology indicators, including strong earnings, our research shows that technology has become so critical to improving the performance of business that organizations might look outside of the IT department to trim expenses."

While many analyst firms, including Forrester Research and IDC, anticipate a spending slowdown in 2008, EMA’s survey revealed that companies in specific vertical industries would actually increase their IT spending.

For instance, the research firm reports that industries such as manufacturing, retail/wholesale/distribution and healthcare/medical/pharmaceutical are planning increases. Specifically, 62% of manufacturing (non-IT) respondents reported they would most likely be increasing their IT spending in 2008 over 2007 numbers. Nearly 60% of those in retail are planning to spend more, and 55% of IT professionals in healthcare spending reported the same.

Large enterprise companies are showing confidence in IT despite talk of recession. Nearly 80% of large enterprises with between 10,000 and 20,000 employees intend to keep budgets the same or increase their spending in 2008. One-fourth of survey respondents intend to increase spending by 10% or less, while 17% are looking for bigger increases between 10% and 25%.

The EMA survey also showed that 60% of security professionals reported increased IT spending in their organizations in the past year. And nearly two-thirds of companies in the high-tech sector said they had higher budgets in 2008.

"When you look at our primary research on IT spending, coupled with insights from other recent EMA studies on sectors like security and virtualization, the outlook for IT spending is really favorable," said Andi Mann, research director at EMA who co-led the survey with Crawford. "While increased caution and reduced budgets are affecting certain parts of the economy, IT appears to be showing real resilience."