With IT budgets on pace to decline more than five percent this year, IT departments have been delaying purchases of servers, PCs and printers, and this trend is likely to continue into 2010, according to Gartner. However, enterprises that pinch their IT dollars may end up paying a price over the long haul due to increased failure rates.
About one million servers already have had their replacements delayed by a year, which amounts to three percent of the global installed base, noted Gartner Senior Vice President Peter Sondergaard. And by next year, this number is expected to exceed two million servers worldwide.
Organizations must start to assess the impact of increased equipment failure rates and determine whether their current financial write-off periods are still appropriate, Sondergaard advised. “If replacement cycles do not change, almost 10 percent of the server installed base will be beyond scheduled replacement by 2011,” and “that will impact enterprise risk,” he said.
Benchmarking IT
Gartner forecasts that IT spending will rise 3.3 percent year over year to $3.3 trillion in 2010. However, Sondergaard cautioned IT leaders attending this week’s Gartner Symposium/ITxpo in Orlando, Fla., not to be overly optimistic. “While the IT industry will return to growth in 2010, the market will not recover to 2008 revenue levels before 2012,” Sondergaard said.
Next year will be all about balancing the focus on cost, risk and growth, Sondergaard said. “For more than 50 percent of CIOs, the IT budget will be zero percent or less in growth terms,” and this “will only slowly improve in 2011,” he said.
As a result, Sondergaard said many IT departments will need to learn how to make compelling business cases for IT spending proposals by demonstrating “true line of sight to business objectives” for every investment decision. “IT leaders can no longer look at IT…