U.S. businesses quit slashing IT budgets

Many businesses across the U.S. have stopped slashing information-technology spending

 

After reducing their budgets sharply for months, many businesses across the U.S. have stopped slashing information-technology spending, a shift that could stem revenue declines at tech companies, including Hewlett Packard Co. and Cisco Systems Inc.

 

Spending on computer hardware, software and services used to be one of the fastest growing segments of the economy, increasing 9 percent in 2006 and 13 percent in 2007, according to Forrester Research. But growth in corporate tech spending—the primary source of revenue for such behemoths as International Business Machines Corp., Dell Inc. and Oracle Corp.—slowed to 8 percent in 2008, and it is expected to contract 3 percent in 2009.

 

The shift toward stability isn't likely to show up when H-P and Dell report quarterly earnings over the next two weeks. Both companies are expected to announce declines in profit and revenue from a year earlier. But interviews with more than a dozen chief information officers and corporate technology executives who oversee tech spending indicate that a range of U.S. businesses have finished cutting.

 

Source: Mint