IT Reacts to Global Recession with a 'Back to Basics' Agenda

While the hype in manufacturers' brochures and web sites is all about the "new, new things," IT decision-makers buffeted by the global recession are setting their priorities on the basics -- backup and recovery, security, and even more server consolidation. This conclusion is based on a study this month covering 1,500 IT decision-makers in 12 countries, conducted by RONIN Corporation, a global research and marketing consulting firm.

The study's objective was to check out the "pulse" of the marketplace in terms of the impact that the recession is having on companies and how this, in turn, is impacting IT. The bottom line is that although IT departments are impacted a little less than their companies as a whole, they are changing their priorities and reducing their spending.

A typical company expects to be spending 15% less on IT than in 2008. 6% of this reduction will be in external spending -- with hardware vendors, software companies and the like -- and 9% will be reductions on internal expense. Internal cost saving will come from hiring freezes, layoffs and improvement in the cost structure of the data center.

There are also fundamental changes in the IT adoption of new technologies. In 2005, 47% of IT groups believed they had an environment which was either "leading edge" or "advanced." By 2008, this had dropped to 25% and in 2009 is expected to drop further to 18%. Thus 82% of companies expect to have an IT environment which is either "mainstream" or worse. This has manifested itself in a "back to basics" approach where spending is devoted to the infrastructure -- backup and recovery, security, server consolidation and virtualization. Only 5% of companies are viewing SOA or cloud computing as a spending priority for 2009.

Another major change is in the way that executive management views IT. In 2008, 48% of executives viewed IT as "a service to the company" and only 20% viewed it as "a cost to be controlled." In 2009, this has changed with "a service to the business" dropping 8 points to 36% and "cost to be controlled" jumping up 13 points to 33% of the total.

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