Economic downturn creates rough ride for IT on spending

Caution signs come out on IT spending plans, as companies focus on reining in costs

With the economy struggling and financial markets in a state of chaos, this is becoming a hard time to be an IT manager.

On every here's-how-to-survive-the-recession list that Gartner analysts presented at the consulting firm's Symposium/ITxpo 2008 conference in the US last week, the No. 1 cost-reduction option for IT execs involved people -- in the form of hiring freezes, job cuts or flattening organizations by eliminating layers of management.

And IT projects with high price tags and lengthy returns on investment may be a hard sell internally. Caution, not expansion, likely will be the business direction at many companies, affecting IT as well as other departments.

Storage projects may be an exception. And IT managers can try to push back, even in hard-hit sectors of the economy, by demonstrating that tech investments can make a difference for their organizations from a business or financial standpoint. For instance, state and local governments hurt by tax-revenue declines could expand their online self-service capabilities. That might be a good thing for IT managers and staffers, but a bad thing for, say, building department clerks.

There also is expected to be continued demand for business intelligence tools, to help users better understand every investment and every business risk. In addition, IT requirements may grow in ironic ways; for instance, if PC replacements scheduled for next year are put off because of economic concerns, help desk calls from users having problems with their systems likely will increase.

New technologies that can help companies avoid hardware upgrades and other capital-equipment costs -- for instance, cloud-based software-as-a-service offerings or server virtualization software -- also may get serious attention even in these tough economic times.

SaaS is the direction that the University of Cincinnati is heading in on e-mail, according to Mark Young, the school's infrastructure manager. Young said the university is close to signing an agreement with Microsoft to use the software vendor's Exchange Labs hosted e-mail service instead of the Mirapoint e-mail system that it now runs internally.

Microsoft, which offers the Exchange Labs service to universities as part of its free Live@edu suite of collaboration tools, will take over some of the expense of providing e-mail to users at the university, such as storage costs. Young said that will enable the school to reduce its spending on hardware and systems administration and free up IT staffers to work in other areas.

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