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  IDC Study Finds U.S. IT Executives Cutting Budgets and Consolidating Assets in 2008

  28 Apr 2008

  FRAMINGHAM, Mass., April 28, 2008 ­ With talk of recession dominating business discussions
  in the United States and worldwide, senior IT executives in the U.S. are already feeling a negative
  effect on their budgets for new projects in 2008. The impact of a slowing economy was confirmed
  in recent IDC interviews with 27 CIOs and senior IT leaders.

  "These in-depth interviews show a significant shift towards cost reduction rather than revenue
  generation as a driver for IT investment. Being able to deliver IT services more efficiently, as a
  response to the economic downturn and to recent mergers and acquisitions, is setting today's IT
  agenda. Responding to compliance and industry structural changes, such as the popularity of
  generics in the pharmaceuticals industry, are also key factors in deciding which IT projects get
  funded and which get deferred," said Henry Morris, senior vice president of Software and Services
  Research at IDC.

  The interviews, conducted as part of IDC's Software and Services Leading Indicators research
  service, focused on the issues currently facing technology leaders in both large public (70%) and
  private (30%) companies across a variety of industries. The interviews did not include public
  sector and educational organizations.

  Key findings from IDC's interviews include the following:

          Many U.S. IT organizations are already reducing their spending for 2008, with more than
          half of the executives citing existing negative impact on the budgets from the economy.
          Approximately one-half of the remaining interviewees were citing a neutral effect to-date,
          but in general were expecting a negative future impact.

          Nearly 70% of the executives indicated that funding is moving back to being more
          centralized, in part for better control and efficiency.

          Infrastructure improvement, including data center consolidation and virtualization,
          application consolidation, and data consolidation, was most frequently mentioned as a
          priority aimed at achieving lower cost, higher performance IT.

          Almost all of the interviewees (25 of 27) are engaged in some form of application
          modernization, citing a large remaining core of aging applications. Many of these
          applications are industry specific. Complicating factors include legacy client/server
          architectures and hard to support languages, including COBOL and Visual Basic.

          IT executives in the U.S. are facing real skill shortages in areas like SAP, .Net, VOIP, and
          Java, as well as business analysis, security administration, and project management.
          However, these executives, who are also faced with an aging U.S. IT workforce, are very
          open to acquiring these skills externally.

  The presentation, IT Executive Views: IT Priorities and Investments (Doc #212005) offers
  highlights from IDC's in-depth interviews with 27 CIOs and senior IT leaders. The presentation
  was developed for an IDC Webcast held April 17, 2008.

  IDC's Software and Services Leading Indicators research service, conducts 3-4 surveys per year
  aimed at understanding the state and progression of enterprise IT maturity, the major
  perceptions and influencing factors represented by business and IT executives and stakeholders,
  and the opportunities for software vendors and services providers. For more information about
  IDC's Software and Services Leading Indicators research service, please contact Melissa
  Bambauer at mbambauer@idc.com.




   Contact


  For more information, contact:

  Henry Morris
  hmorris@idc.com
  508-935-4518



  Bob Welch
  bwelch@idc.com
  508-935-4608



  Melissa Bambauer
  mbambauer@idc.com
  508-935-4229




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