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12/21/2009
02:14 PM
Chris Murphy
Chris Murphy
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Global CIO: Glimmers Of Growth In Outlook 2010 Research

Our exclusive research shows IT shops may spend more this year, but not much on hiring people.

See you, 2009. Can't say that we'll miss you.

The results of InformationWeek Analytics' Outlook 2010 survey, where we asked 360 business technology pros about their plans for the year ahead, don't make you want to break out the party hats and blowers. But there are some signs that IT spending won't continue to fall and that customer-facing and sales-supporting projects will be on the rise. Compare that to last summer, when we heard a lot about cost-cutting infrastructure projects and renegotiations with vendors but not a lot about IT initiatives that drive growth.

In terms of emerging technology, cloud computing's momentum is real, as markedly more IT pros are considering it than they were a year ago. Data center innovation remains a high priority. Despite some spending optimism, the IT hiring outlook remains weak, and if there's budget cutting ahead, IT will take its share of the lumps.

(The full data set behind this report is available free here, at analytics.informationweek.com)

Looking at the straight IT budget numbers, there are signs of change. In fact, 46% of companies plan to increase IT spending, compared with just 34% who planned to at the start of last year. Thirty percent say they'll increase spending more than 5%, compared with 21% last year. The share expecting spending to remain flat is about the same, down to 30% from 33% last year. Just under a quarter of companies plan to cut IT spending; last year, it was a third.

When it comes to hiring, though, there's little change from year ago. Just 14% are expanding IT staffs--the same as last year. A few more IT groups have moved out of hiring freeze mode: 36%, down from 43% a year ago. But companies moving out of hiring freeze are as likely to be cutting jobs as filling vacancies; both of those groups have risen. Almost one in five IT organizations (18%) plan to cut IT staff in 2010.

That's bad news, considering the steep IT job losses of the past year. U.S. IT employment is down 9%--a loss of about 350,000 IT jobs--since its peak in the middle of 2008, according to third-quarter Bureau of Labor Statistics household surveys. IT unemployment is at 5.8%, according to InformationWeek's analysis of the Bureau of Labor Statistics' survey results, the second highest figure this decade, topped only by the first quarter of 2003.

The demand for IT remains strong, however. Just over half of respondents to the InformationWeek Analytics survey say demand's rising, up from 44% a year ago. Nineteen percent say it's dropping, with fewer new projects being requested or approved.

Technology Priorities

We asked respondents about their companies' plans for investing in six broad technology areas in the coming year. Customer-facing projects ranked the highest, with 45% planning to increase or significantly increase investment. Last year, customer-facing projects topped the list, but with only 37% planning increases. New apps for sales teams, such as mobilized apps and CRM, were again the second-highest area of increased investment, with 31% planning increases, compared with 25% last year.

In one of the clearest signs of increasing optimism, 31% of companies plan to spend more on apps and systems to support new or expanded product lines; 18% will cut that spending. Last year, just 23% of companies were increasing that spending, while 23% were cutting it. Cost-cutting efforts aren't losing steam--27% will increase spending on IT to cut operating costs. Last year, 23% planned to spend more on IT to cut costs.

We also asked how the economy is affecting companies' approaches to specific technologies. As we've been hearing in our conversations with CIOs, cloud computing has had a great year. It's not widely implemented, but IT teams are increasingly open to it. Forty-six percent take a positive view of cloud computing in the context of today's economy--they're either more likely to use it, will absolutely use it, or will continue to use it. Last year, just 31% took one of those positive views. That's for infrastructure as a service, such as CPUs and storage. For software as a service, it's 56%, up from 50% last year.

Global CIO
Global CIOs: A Site Just For You
Visit InformationWeek's Global CIO -- our new online community and information resource for CIOs operating in the global economy.

Cloud computing may have promise, but virtualization's the established star, with 73% taking a positive outlook, up slightly from 70% last year. Videoconferencing also continues to get strong interest, with 67% of companies viewing it positively in this economy. That's up only a bit over last year's 64%. A lot of people, however, may just be kicking the tires with videoconferencing--35% of those positive respondents fall in the "more likely to use it" category.

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