There's a great IT spending, budget disconnect brewing

A Gartner survey projects roughly flat IT budgets for 2010. Forrester Research is projecting relatively healthy IT spending for the year. What gives?
Written by Larry Dignan, Contributor

Gartner said Tuesday that IT budgets will be up 1.3 percent in 2010 and roughly at 2005 levels.

According to Gartner's CIO survey, 2009 IT budgets were down 8.1 percent. Indeed, 2009 was "the most challenging year for IT since the survey began in 1999.

Gartner surveyed 1,586 CIOs across 41 countries and 27 industries. So where's the disconnect?

Forrester Research just last week reported a relatively rosy outlook. According to Forrester projections, IT spending in the U.S. will grow 6.6 percent in 2010 to $568 billion. In 2009, IT spending fell 8.2 percent. Projections for IT spending in 2010 have been moving gradually higher.

Gartner took its survey in December.

Obviously, one of these well-known research firms is going to be wrong about IT spending. Weak budgets and an IT spending boom don't go together. However, the vastly different projections from Gartner and Forrester illustrate how no one really knows how IT budgets will turn out. Tech spending will bounce around like the S&P 500 and CEO confidence.

Here's Forrester's take on the gap between IT budgets and spending projections in a research note:

At this point, there will be a discrepancy between our forecasts of a good 2010 tech recovery and the 2010 budgets and spending plans that CIOs have put together. After a recession, CIOs tend to be very cautious about their budgets, erring on the side of little or no growth in what they plan to spend. We saw this pattern in surveys of CIOs coming out of the 2001 to 2003 recession; we fully expect to see it when we do our survey in early 2010 of IT decision-makers and their 2010 budgets. As evidence of an economic recovery becomes clearer, CIOs then get the go-ahead to spend above their budget. So, while IT vendors can prepare their 2010 plans on the basis of solid growth in the US and global tech markets, in their sales and marketing efforts, they should still assume they will be facing very cautious CIOs.

Gartner acknowledges that budgets are transitioning from budget cuts and canceled projects to those efforts that may deliver growth. Here's a look at the top priorities in 2010 from Gartner's survey:

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