In-Depth

What Downturn? Shops Still Spending on IT

Seventy percent of CIOs say they'll spend money on new or expanded IT initiatives, including information security, virtualization, and data center efficiency.

• By Stephen Swoyer
• 03/25/2010

A recent study from IT staffing specialist Robert Half Technology isn't all says that CIOs plan to invest in new IT initiatives over the next year, in spite of a bad (and possibly worsening) economic climate.

Seventy percent of CIOs say they'll spend money on new or expanded IT initiatives, including information security (cited by 43 percent of respondents), virtualization (28 percent), and data center efficiency (27 percent).

The Robert Half study was based on a survey of more than 1,400 U.S. CIOs, all representing companies with 100 or more employees. According to Robert Half researchers, CIOs aren't opposed to new spending, especially in segments that can help beef up security, improve efficiency, or generate new revenues. However, Robert Half officials were quick to stress that the survey results don't necessarily augur an uptick in IT spending.

"Although times are lean, many companies are finding that they can't afford to postpone IT investments that lead to increased security, efficiencies, or revenues," said Dave Willmer, executive director at Robert Half Technology, in a statement. "Organizations also are trying to make sure they are prepared for growth when conditions improve, and enhancing their IT infrastructure is part of that process."

Not everyone has the same spending priorities, of course. CIOs in the financial services and transportation sectors, for example, plan to focus on security spending. Amajority (60 percent) of CIOs in both verticals anticipate spending money on new or expanded security-related projects in the coming year. That far outpaces the average (43 percent) for CIOs in all industries.

On the other hand, IT chiefs in just about all verticals seem to have virtualization on the brain. "Added budget pressures are forcing many companies to focus on more cost-effective solutions for servers, storage, and networking," the Robert Half release says. "Virtualization tools enable greater consolidation, lower hardware costs, and reduced space and power requirements."

Here, too, there are differences. CIOs from larger companies are especially enthusiastic about virtualization: 40 percent of CIOs at both large and midsize organizations (companies with 500 or more employees) are looking at virtualization projects. Elsewhere, IT chiefs plan to spend money to boost the efficiency of their data centers, largely to eliminate costly data center expansion efforts, which IT executives see as stemming from poor planning or inefficient use and/or allocation of data center resources.

Other spending priorities include Voice-over-Internet-Protocol (cited by 26 percent of chiefs), which executives expect will both reduce monthly phone bills and translate into "greater network flexibility and unified messaging." IT chiefs are also eying increased software-as-a-service (SaaS) spending, which Robert Half says is "particularly attractive" in shops that have slashed their budgets. Just over a quarter of CIOs anticipate spending more on SaaS.

Finally, one-fifth of IT chiefs anticipate spending to support "Green IT" initiatives; 19 percent expect to allocate new or additional spend for business intelligence; and a staggering 18 percent say they plan to allocate funding for social networking projects. Web 2.0 (at 17 percent) and outsourcing (at 16 percent) spending rounded out Robert Half's survey sample.