UK CIOs face slashed budgets this year

Gartner figures show UK to suffer deeper tech spending cuts than other countries

IT chiefs in the UK are facing more stringent spending restrictions than other countries, with budgets set to plummet about seven per cent this year.

The CIO Agenda Survey from Gartner Executive Programmes (EXP) finds that, on average, firms' tech budgets across the 50 countries analysed will rise one per cent this year. But EMEA CIOs are expecting a budget decline of 0.4 per cent, with the UK one of the worst-affected countries.

IT chiefs in this country are bracing for their tech spending pot to be cut 6.9 per cent in 2011. This is in comparison to a projected 2.7 per cent decline in Germany and a 0.2 per cent increase in France.

On the plus side, Gartner EXP reports that enterprises may have more cash to spend on innovation and transformation projects this year. The analyst claims that businesses have long spent about two-thirds of their budget on operational expenses.

But use of hosted services and technologies could release up to half the money traditionally spent on operations and infrastructure. This would allow CIOs to splash out on innovative projects designed to drive growth and value, according to Gartner.

When it comes to tech investment strategies this year, cloud is characteristically ubiquitous. Gartner reports that, currently, just three per cent of IT chiefs run the majority of their IT through cloud or SaaS. But, within four years, this figure is projected to rise to 43 per cent.

Cloud is earmarked as firms' top IT investment priority this year, followed by virtualisation and mobile technologies. IT management and business intelligence round out the top five. Networking, voice and data was in sixth place, followed by enterprise applications, collaboration technologies, infrastructure and Web 2.0.

Mark McDonald, head of research at Gartner EXP, said: "CIOs and IT have been boxed in between modest budget growth and growing legacy requirements. New lighter-weight technologies - such as cloud computing, SaaS and social networks - and IT models enable the CIO to redefine IT, giving it a greater focus on growth and strategic impact. These are two things that are missing from many organisations."

"The resource realities indicated in the CIO Agenda Survey raise the urgency and importance of adopting new infrastructure and operations technologies, such as cloud services and virtualisation."