Global IT budgets to rise by 3%: Gartner

IT budgets the world-over are expected to increase by 3.3% in 2008, slightly higher than 2007, reveals a new Gartner EXP Worldwide Survey of CIOs. However, if certain economies do experience a recession, the figure could see a drop. The report also notes that Indian firms will report stronger than average IT budget increases of around 13% versus the world average of 3.3% for 2008.

Keeping a recession in mind, Gartner is recommending that its CIO clients should work on two budgets. One would be the official IT budget, which assumes a continuous growth. The other, which Gartner calls a 'shadow budget', will help the company prioritise projects. Peter Sondergaard, global head of research, Gartner said, "We are recommending our clients to have a shadow budget that assumes there will be a budget cut. We are asking CIOs to do a bit of homework upfront, so that if a budget cut is announced, they know which projects need to be prioritised and what can be cut."

Enterprises are willing to invest in IT that delivers distinctive solutions. IT budgets at these companies are growing at a rate of 4.9% on an average, compared with IT budgets at generic IT shops, which will rise an average of 3.1%. "Even if there is a recession, it does not mean that all goes out of the window. Because while the budgets might go down, CIOs priorities or the business demand will not be compromised. They will have to meet their customer and business requirements," said Partha Iyengar, head of research, India, Gartner.

India's ICT market is estimated to grow at a five-year compound annual growth rate (CAGR) of 20.3% to reach $24.3 billion, or nearly 2% of the country's GDP, by 2011. This increased spending by Indian CIOs is directed primarily towards building new business capabilities, with 30% of IT spend allocated for business growth and 19% towards business transformation.