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Cash Strapped Europeans tighten IT budgets

by on23 January 2012

IDC warns of belt tightening

There is bad news for those who thought that the IT market might pick up this year. According to bean counters at IDC Western European organisations on average are drawing up cautious budgets for IT hardware, software, and services spend in 2012. In a report with the concise title IDC European Enterprise Pulse 4Q11: Organizations Batten Down the Hatches for 2012 (IDC #Q11T, December 2011), the analyst said fewer organizations this year planning to raise their spend.

More than 40 per cent of  organisations expect to raise external IT spend on hardware, software, and services, and about 17 per cent expect external IT spend in 2012 to decline. The remainder expect to hold spend steady. Only a quarter of those planning to increase spend in 2012 are planning to raise spend by 5 per cent or more. More than 43 per cent of organisations raised their external IT spend over the whole year, according to survey respondents, while around 20 per cent lowered their spend.

The report notes that Western European organisations are therefore heading into 2012 with external IT budgets that tend on average more toward stasis when compared with actual IT spend patterns in 2011. Douglas Hayward, research director, IDC European services research said that these spending plans may seem optimistic at first sight, given the economic environment, but in fact total external IT spend budgets for 2012 are well down on the equivalent budgets for 2011.

In IDC's view, this reining in of IT spend as 2011 progressed came in response to lowered consumer and business confidence and to the progressively worsening economic outlook during the year.

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