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Survey Says: IT Budgets in 2010 To Be at 2005 Levels

It will increase by 1.3% in 2010 vs a drop of 8.1% in 2009

Gartner EXP's CIO survey findings show that, in the near term, business expectations and CIO strategies appear stable, with a continued focus on business process improvement, cost reduction and analytics (see Table 1).

Table 1

Top 10 Business and Technology Priorities in 2010

Top 10 Business Priorities Ranking Top 10 Technology Priorities Ranking
Business process improvement 1 Virtualization 1
Reducing enterprise costs 2 Cloud computing 2
Increasing the use of information/analytics 3 Web 2.0 3
Improving enterprise workforce effectiveness 4 Networking, voice and data communications 4
Attracting and retaining new customers 5 Business Intelligence 5
Managing change initiatives 6 Mobile technologies 6
Creating new products or services (innovation) 7 Data/document management and storage 7
Targeting customers and markets more effectively 8 Service-oriented applications and architecture 8
Consolidating business operations 9 Security technologies 9
Expanding current customer relationships 10 IT management 10

Source: Gartner EXP (January 2010)

Strategic Technologies Support More Collaborative and Innovative Capabilities

Business expectations are shifting from a focus on greater cost-based efficiencies, to achieving better results based on enterprise and IT productivity. These productivity gains will come from collaborative and innovative solutions that take advantage of the new "lighter-weight" services-based and social media technologies, including virtualization, cloud computing and Web 2.0 social computing. This transition can be seen in the top 10 technology priorities for CIOs in 2010 where business intelligence, the No. 1 technology the past five years, dropped to the No. 5 priority.

These strategic, "lighter-weight" technologies are of increasing importance to the CIO. Exploiting them provides the cost, capacity and capability gains needed to define, source, create and deploy information- and process-intensive solutions that will reshape IT and its future role.

Moreover, the technologies that CIOs are prioritizing in 2010 are technologies that can be implemented quickly and without significant upfront expense, instead of investing millions of dollars to get millions in benefits, with these technologies, up front investments are measured in thousands of dollars to get those same benefits.

"These technologies, implemented properly, create the opportunity for IT to change its role and the operational performance of the enterprise," said Mr. McDonald. "Asymmetric technologies like virtualization, cloud and Web 2.0 enable companies to get out from under a front-loaded heavy investment model that limits IT's agility and flexibility."

"While enterprises will transition at different rates and times, every CIO faces the need to raise productivity, create new capabilities and use the recovery to drive fundamentals of the current agenda and the repositioning of IT," Mr. McDonald said. "Such transitions will not happen overnight but they will start with the decisions and directions established in 2010."

This year's survey collected data in the middle of the economic changes in the fourth quarter of 2009. As such, it provides a snapshot of CIO plans, priorities and budgets for 2010 as they stood at the end of the fourth quarter of 2009. They represent Gartner's best current indication of CIO plans at this time.

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