Blog: IT Spending GROWTH Slows From 7 to 5 Per Cent...Shouldn't it be Flat?

Blog: IT Spending GROWTH Slows From 7 to 5 Per Cent...Shouldn't it be Flat?

So Goldman Sachs says IT spending growth will slow from 7 per cent to 5 per cent.

Venture capitalists are sad (because start-ups may have fewer prospects) and some generalized sky-falling blah-blah has begun. About slower growth, no less!

Meanwhile, the banking, automotive, airline, and real estate industries are tanking or bouncing along on the bottom; gas, diesel and food prices are at historic highs, and consumer confidence is extremely low.

Why, in fact, should IT spending go up at all? Why not keep it flat in a time like this? And let's not start in on the virtualization and consolidation song-and-dances (also from the Goldman report). The mantra: 'we have to spend money to save money'. Right. Many types of virtualization technologies aren't ready for prime time, let alone a bad economic climate.

And none bougt now will yield payback within an early enough timeframe to fit within most firm's fiscal year, given the learning curve and time to analyize and determine which virtualization domains make near-term sense and which belong in next-year's spending or beyond.

I realize this gives virtualization vendors chest pains. Oh well.

Consolidation is a similar story. If this involves buying more equipment to spend less money over time, let's find a time when that makes good sense -- instead of purchasing yet more infrastructure that requires software and maintenance licenses. So ditto on chest pains for vendors.

Instead, keep the IT budget flat by deferring hires; re-examine the unused assets you already have; maximize the training and mentoring of the staff you have; interview business peers about how they use the technology you already have; and finally, ask your vendors how they can help you use what you have more intelligently.

And -- I know this is crazy -- shut off contracts, machines, and licenses of those things you no longer need.

To cut this diatribe and summarize: growing the IT budget in the midst of tough times makes little sense (unless you're CIO of an oil company or related). Keeping a level IT budget is a more convincing message to deliver.

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