By Steve Ranger, 4 March 2009 12:45
NEWS
IT projects around risk management, post-acquisition integration and cost-cutting are among those most likely to be approved this year, according to analyst house IDC.
Other IT programmes won't be so lucky however: the company is predicting some will be held back, trimmed down or broken up as the recession continues to take its toll.
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IDC's European software and services research manager, Laura Converso, said in a statement: "Many projects will be delayed, reduced in scope, or chopped into smaller pieces, but so far we do not expect many projects to be cancelled."
IDC forecasts that IT 'deploy and support' services spending will be cut to the minimum in 2009, and only 'keep the lights on' spending will be maintained.
Meanwhile, hardware shipments and software licence rates are expected to decline sharply in Europe this year, and IT training-related activity is forecast to drop by five per cent year-on-year.
As cash-strapped firms cut back on discretionary spending and new tech projects, IT services expenditure is expected to be flat this year: IDC has now lowered its previous optimistic forecast of 2.6 per cent year-on-year growth over 2009 to 0.6 per cent.
Spending on outsourcing is expected to be "less cyclical" than systems integration and consulting, and IDC predicts 4.4 per cent growth in 2009, with cost-cutting the primary motivation for outsourcing.
Recently silicon.com reported that BP had warned agencies supplying temporary staff that it would cut contractors' rates by 10 per cent, a move expected to affect some 900 IT contractors across 80 or so suppliers worldwide. However, silicon.com's CIO Jury, also admitted it is still not much easier to get good deals out of suppliers as a result of the recession.
Looking ahead, IDC sees a "post-crisis outlook" in which software as a service, cloud and "global sourcing" offerings emerge as the big winners.
Comments
There are 2 comments. Join the discussion
1. Simon Allen
IDC's European software and services research manager, Laura Converso, said in a statement: "... but so far we do not expect many projects to be cancelled."
Then she will be getting a nasty surprise! If she had lived through two recessions and three booms, as I have done, then she would expect everything and anything to be cut - often without reason.
2. Chris Tolmie
Thinking about the comment above, would a better way of positioning the projects under review be one of "delay" rather than "cut"? I have a lot of time for IDC and think that they put a lot of resource into their predictions. I like the idea of projects being broken up (such as Unified Comms migration) into smaller chunks too.
Chris