According to McDonald, the IT model will change significantly as we exit the recession. What does that look like?
The response we're getting back from our survey and interviews with CIOs is they've cut back on consultants, software and hardware purchases and they're renegotiating vendor contracts. They're changing the amount of money they spend outside of IT as a way of coping with this budget change.
IT demand is very strong. Companies have had to work harder than ever to make money in this environment and also to be able to drive the types of innovation that will keep customers interested in new things they're offering. But CIOs are meeting that demand with existing IT assets rather than buying new assets.
Of the CIOs we surveyed, 38% expect to see a recovery by September 2010, and another 32% expect a recovery by March of 2010. Only 24% said it would be beyond September 2010.
If the economic recovery begins at the end of this year, IT budgets will lag by one or two quarters.
What's also interesting, though, is we're starting to see IT look at cloud computing as a sourcing option. They can source with a provider or source with a cloud. Oracle, Dell, Amazon and Google now start showing up in RFPs (requests for proposals) where you would traditionally see an IBM, Tata, AMS or Accenture. They're starting to consider the cloud not as a technology but as a sourcing option. It's taking a fixed expenditure and turning it into a variable expenditure.
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