CIOs expect slowdown to end by Oct-Dec '09: IDC

MUMBAI, INDIA: IDC India, a subsidiary of CyberMedia and a provider in IT research and consulting services, today announced the results of a study that it has conducted on the current economic scenario.

The study, 'Identifying Opportunities in the Current Economic Scenario', revealed that two-thirds of the CIOs surveyed expect the economic slowdown to end by Oct-Dec 2009 and that their focus is shifting to better management of existing IT infrastructure by consolidating, optimizing and leveraging resources, from building new capacities.

The study was conducted across 467 CIOs from mid-sized and large enterprises across 18 industry verticals in February-March 2009, said a press release.

According to the study, the economic slowdown is accelerating enterprise transformation, which is manifested in cost savings, productivity enhancement, customer retention, and new IT engagement/delivery models.

“The IDC CIO survey provides pointers to IT vendors for strategizing their business agenda in the mid-term to effectively ride out the economic slowdown and stay focused on their priorities,” said Kapil Dev Singh, country manager, IDC India.

About 66 per cent of the CIOs contacted felt that the slowdown would end by the fourth quarter (October-December) of 2009.

However, in view of the larger macro-economic picture and the lag in terms of IT buying by enterprises, IDC India expects the slowdown to extend and IT spending to revive after the second quarter (April-June) of CY 2010.

The study found that enterprises are cutting back on new projects and focusing on the maintenance of existing IT setups.

Of the total planned IT expenditure for 2009, enterprises plan to spend 20 per cent on new purchases and reserve the balance for managing the existing setup.

The surveyed CIOs said that green technologies like Virtualization, Unified Communications (UC), and others like Business Intelligence (BI) and Data Warehousing (DW), Software-as-a-Service (SaaS), and Open Source are the emerging investment priorities in 2009.

The study covered product lines ranging from access devices, networking infrastructure, software, storage, servers and technology solutions that the domestic market procures.

The IDC India study concludes that the investments in PCs, servers and computer peripherals are expected to decrease by 20 to 40 per cent as compared to CY 2008.

This is likely to directly impact hardware vendors and off-the-shelf software vendors.

IT services vendors are likely to be the least impacted if they focus on providing services like Infrastructure Management, Business Transformation and Business Continuity.