CIOs Plan to Play It Safe with Tech Spending


Yesterday I wrote about growing concerns about IT staff cuts in the coming year, based on a recent Goldman Sachs & Co. survey of IT executives. The number of managers planning to cut internal staff involved with application development or maintenance tasks rose from none in October to 11 percent in last month's survey.


Not surprisingly, reduced spending emerged as a major theme of the survey, with executives scaling back plans for large and complex projects and "searching for solutions with a high and fast ROI," according to Goldman Sachs. Executives appear to be avoiding hyped technologies and sticking to the tried and true.


The top five spending priorities: server virtualization, server consolidation, cost-cutting, application integration and data center consolidation. At the bottom of the priority list were grid computing, open source software, content management and cloud computing.


Charles King, a Pund-IT Inc. analyst, tells Computerworld:

The message here is CIOs are looking primarily to tested, well-understood technologies that can result in savings or increased business efficiencies whose support can be argued from a financial point of view.

Sarah Friar, a Goldman Sachs analyst, highlights some other interesting points in a column for SandHill.com. Software will weather the economic storm better than hardware, with must-spend categories like security, compliance/risk management and data management the least likely to see cuts. Not faring as well, due to their reputations for cost and complexity, are ERP and SOA projects.


Microsoft may have its work cut out for it with its$300-million-plus ad campaign to bolster Vista's image, judging by the 43 percent of tech execs that identified Vista upgrades as likely to be delayed in the event of tight budgets.


Interest in software-as-a-service continues to grow, with partner relationship management, Web conferencing and CRM topping the list of expected SaaS purchases. Interestingly, Oracle, Microsoft, Cisco and SAP top both the lists of vendors currently being engaged for SaaS deployments and vendors that execs plan to use in the next year. Friar predicts that these large companies will acquire some pureplays in the coming months to expand their SaaS offerings.