Fighting off memories of the dot-com bust, many in the tech world are a little nervous in today's uncertain economy. Will corporations cut back IT  spending? If so, how much and for how long? There are still more questions than answers, but Gartner is making some predictions.
Here's what we know: The dot-com bust saw budgets slashed from mid-double-digit growth to low-single-digit growth. We also know that global economic problems make an early impact on IT budgets.
Despite the many comparisons being drawn between today and the turn of the century, Gartner is offering good news for nervous tech giants. The firm predicts the industry will not see the dramatic reductions experienced during the dot-com bust.
"In a worst-case scenario, our research indicates an IT spending increase of 2.3 percent in 2009, down from our earlier projection of 5.8 percent," said Peter Sondergaard, senior vice president at Gartner and global head of research. "Developed economies, especially the United States and Western Europe, will be the worst affected, but emerging regions will not be immune. Europe will experience negative growth in 2009; the United States and Japan will be flat."
Lessons from the Dot-Com Bust
Sondergaard offered Gartner's latest IT industry outlook during the Gartner Symposium/ITxpo that is going on in Orlando through Oct. 16. Gartner said the events of the past two weeks will have an impact on IT budgets in the fourth quarter, but it will not change 2008 substantially. The IT industry went through more dramatic reductions during, and after, the recession of 2001. Many lessons were learned.
"We learned that in tumultuous times, CEOs want their executives and managers to be advisers and counselors, not just great implementers of directions given to them," Sondergaard said. "What they want now most of all is agile leadership. Leadership that can guide us through simultaneous cost control and expansion at the same time."
During the opening keynote on Monday, Gartner analysts also explained how IT leaders need the courage to make the hard decisions that lie ahead. Gartner analysts said the actions of IT leaders today will define their future.
"A financial era is ending. This age of conspicuous consumption is over, and the age of conspicuous frugality starts now," said Whit Andrews, vice president and distinguished analyst at Gartner. "The world has changed, and your role as an IT leader must change as well."
No Dot-Com Bubble Repeat
As Pund-IT analyst Charles King sees it, the moves by international governments to stabilize global banking systems may offer some breathing room for tech companies going into the fourth quarter, though he doesn't expect the financial-services sector to continue to be the healthy IT spenders they were in recent boom years.
"The comparison to the dot-com bust is an interesting one, but what I haven't seen mentioned is how a large contributor to the dot-com bust was the fact that so many companies went out of pocket, making huge IT investments in the lead-up to Y2K," King said.
"When the bust happened it certainly whacked IT spending, but in part it whacked IT spending because there were an awful lot of companies out there that had way more capacity than they had need for," he said. "We are not in that situation today. It's a different time."
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