IT spending goes down in companies

Many large companies, especially those in the financial services, utilities and telecommunications industries, have cut their technology budgets this year because of the economic slowdown.

In a report, Forrester Research Inc found that 43 per cent of large US and European businesses it surveyed have cut their overall spending on technology products and services in 2008. Some companies, meanwhile, have put discretionary spending on hold and others are planning to negotiate lower rates for information-technology services.

The research firm did not change its annual technology spending forecast, but it is reviewing it. In its most recent forecast, in February, Forrester had said it expects tech spending to grow 2.8 per cent this year. That marked a significant downward revision from a December 2007 forecast of 4.6 per cent growth.

The report, said Forrester vice president and principal analyst John McCarthy, is "really just a snapshot" of companies' spending sentiments.

In general, corporate technology buyers were less optimistic than they were in the last such survey, in October 2007, just before the credit market tightened and the housing market "really fell apart," McCarthy said.