Large Enterprises Lower IT Spending Projections - InformationWeek

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Software // Enterprise Applications

Large Enterprises Lower IT Spending Projections

The culprit: higher costs to support core business operations.

Organizations with more than $1 billion in revenue have lowered their IT spending projections for next year because of higher costs to support core business operations, a market research firm says.

In the beginning of this year, companies expected to increase IT spending by 6%; that figure has been reduced to 2.8%, Gartner Consulting said Thursday. Among the factors that have led to the reduction is more money spent to support increasingly complex infrastructure and application requirements, rising energy costs, regulatory requirements, and other non-discretionary spending to keep the business running, Jed Rubin, director of Gartner Consulting, said in a statement.

"This increased run-the-business spending has consumed budget resources that were originally earmarked for more strategic and transformational investment," Rubin said.

Organizations are still committed to buying technology that can provide new ways of doing business, such as more advanced use of the Internet. But new investments would have to be funded by reductions in IT spending on current business operations. IT organizations say they need to reduce spending in those areas by nearly 5% in order to fund new projects.

Complete findings of enterprise spending next year are available in Gartner Consulting's latest Worldwide IT Benchmark Report, which is based on a study of 1,500 companies.

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