CIOs Have Stopped Gutting IT Budgets For 2009, WSJ Says - InformationWeek

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IT Leadership // CIO Insights & Innovation
Commentary
5/14/2009
05:25 PM
Bob Evans
Bob Evans
Commentary
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CIOs Have Stopped Gutting IT Budgets For 2009, WSJ Says

That huge sigh of relief you're hearing today could be coming from big IT vendors upon reading in The Wall Street Journal that many U.S. businesses have stopped gutting IT budgets and might even be considering spending a bit more next year. As Sunoco CIO Peter Whatnell was quoted as saying, "I think that most people have made their cuts."

That huge sigh of relief you're hearing today could be coming from big IT vendors upon reading in The Wall Street Journal that many U.S. businesses have stopped gutting IT budgets and might even be considering spending a bit more next year. As Sunoco CIO Peter Whatnell was quoted as saying, "I think that most people have made their cuts."While many IT vendors have experienced declining revenues due to the global economic downturn, "interviews with more than a dozen chief information officers and corporate technology executives who oversee tech spending indicate that a range of U.S. businesses have finished cutting," the Journalreported.

That sense of impending stability, after months in which the marketplace was in such flux that vendors were unable or unwilling to make projections about future financial performance and CIOs responded with multiple downward revisions of their IT budgets, is growing, the Journal article said.

Indeed, the Journal cited a cautious but nevertheless powerful comment from one CIO with a billion-dollar IT budget that some tech companies might read as the beginning of the end of a dizzying downward spiral: "I don't think that we'll see the [spending] levels that we saw three or four years ago," says Catherine Brune, the chief information officer at insurer Allstate Corp., whose $1 billion tech budget has been flat for the last year and will most likely remain so into 2010.

But for now, she says, "I'm not hearing the panic that I was six to nine months ago."

Meanwhile, aside from that article, one IT bellwether that's expressing a fairly bullish outlook is IBM. Yesterday, CEO Sam Palmisano told investors that for the two-year period from 2008 through 2010, the company is looking for its earnings per share to show a compound growth rate of 6% to 11% -- from $8.89 per share for 2008 to somewhere between a projected $10 and $11 per share in 2010.

We'll be covering Palmisano's comments extensively in Global CIO over the next couple of days - stay tuned for some striking insights into why he feels so bullish about the company's prospects.

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