U.S. corporate IT spending outlook still murky

A new study from ChangeWave Research finds that while corporate IT spending will likely remain fairly anemic throughout 2008, there are faint signs of stabilization.

The research company recently surveyed 2,049 people involved with IT purchasing in their companies. Eleven percent said their companies have spent "more than planned" on IT in the second quarter, up 1 percentage point from a similar study conducted in February, ChangeWave said. However, 27% reported spending less than planned, the same as the February report.

"In a nutshell, current IT spending is still down at virtually the same lowered levels it was in the previous quarter -- but has not gotten any worse," the report states.

ChangeWave's study also uncovered some decidedly bearish sentiments among respondents. Twenty-eight percent predicted their IT budgets will be less in the second half of the year, an eight-point increase from the previous report.

Eighteen percent said they expected their budgets to grow from July to December, while 44% forecast that nothing would change.

Thirty-four percent cited the rising cost of energy as a drain on IT spending in the second half.

Amid this uncertain environment, some companies are nonetheless moving ahead with ambitious projects.

"We're investing heavily in our IT organization and applications on a global scale," said Brendan Meehan, business process architect with audio equipment maker Bose, in an interview at IDC's IT Forum & Expo show in Boston. "We're looking at process improvement, process modeling. That's really the direction where we see IT will bring value to the business."

The company is keeping a keen eye on spending, but believes investing in IT should be a top priority, he said. "We're monitoring it closely right now. Given the economy, we've got to watch our pennies. But it's a huge investment for the corporation, and there's a lot of value in getting on a global platform and providing those processes," he said.

On the surface, Norm Fjeldheim also appears to be in a solid position. The CIO of wireless telecom manufacturer Qualcomm has seen major year-over-year budget growth recently -- including a 17% rise in 2007.

But that number should be placed in the proper context, he explained. "We're going to mirror what the company's doing. Our budget is pretty much in line with what Qualcomm's growth has been," he said.

And his employee head count has not grown at the same rate as his budget, Fjeldheim noted.

Qualcomm is holding down IT costs through familiar means, such as studying how effectively it is using assets, he said.

In addition, he gives individual managers "seed money" to conduct IT projects meant to save the company money. A server-virtualization and -consolidation effort launched a number of years ago has resulted in the company saving some $20 million over the past five years, according to Fjeldheim.

"Budget responsibility is really pushed down deep in our organization," he said.

The IDG News Service is a Network World affiliate.