Friday, July 23, 2021

IT Spending Recovery a Year Away

IT managers, take heart. Recovering from the current recession won’t be as bad as surviving the dot-com crash of 2001. For those who can remember further back, the economic rebound will be more like the recession that hit in 1990.

That’s primarily because today’s recession, which according to official estimates began in December 2007, should be over by year’s end — and frugal spending strategies already in place will make it more bearable, according to a report released today by Computer Economics.

“IT managers have been somewhat conservative in spending [compared to the dot-com bubble] and that has put them in a better position today,” Frank Scavo, president of the Irvine, California-based research organization, told InternetNews.com.

Computer Economics’ “IT Spending in Recessions: 2009-2010 Forecast” study surveyed 200 IT executives in companies with over $50 million in revenue. The firm has conducted surveys of IT spending and staffing trends since 1990.

The findings come as organizations continue cost-cutting measures and staff reductions begun in 2007 to cope with an increasingly challenging economic climate. A November ChangeWave research report noted IT spending projections for the last quarter of 2007 were the worst since 2001.

The goal, Scavo said, is to get through the next 12 months.

“If the pattern of recovery holds true today, we should see a modest increase in IT equipment and software investment in 2010,” said Scavo, who noted that the current recession is tied to financial sector and credit lending issues, just like the 1990 economic event.

What won’t happen, however, is the tech boom that came after the 1990 recession, thanks to the Internet gold rush and Y2K concerns that pushed spending growth into double digits.

But the lack of another such boom may be a very good thing, given the fallout that later followed and actually played a part into making the 2001 “dot-com crash” so tough for the industry.

This article was first published on InternetNews.com. To read the full article, click here.

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