2007 I.T. Budget Check

No one really knows how much they’re going to spend on technology this year. Not even you.

Key analysts disagree in their forecasts about information-technology spending in 2007. Goldman Sachs predicts technology budgets will jump 6% to 7% compared to 2006. International Data Corp. goes along with that. But Merrill Lynch puts the increase at 4.2%, based on a survey of 100 chief information officers in late 2006.

Most pessimistic is Gartner, which forecasts that overall technology spending will grow by 2.8%. Yet that figure may seem worse than it is, according to Jed Rubin, an analyst in Gartner’s worldwide information benchmark service.

Many of the technology executives Gartner talked to said they have cut keep-the-lights-on infrastructure costs in the past year through efficiency plays, such as consolidating servers, which can save 5% to 10% on maintenance. So, while 2007 budgets may increase by just 2.8%, more of the budget will be freed up this year for new projects, Rubin says.

Some of the savings have to be recycled back into the corporate coffers, of course. Chief executives love to show Wall Street just how efficient they’ve made things. But some amount will remain in the information-technology budget, giving CIOs more room to maneuver.

Much more interesting than quibbling over percentage points, though, is what technology executives plan to do with their money. Several chief information officers told Baseline that security and streamlining infrastructure to cut technology operating costs are the two biggest priorities.

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