CIO Survey: We’re Squeezing Vendors on Pricing Amid Budget Declines

Chief information officers expect their 2009 technology budgets to fall roughly 2.3 percent but are spreading the pain: Executives expect better pricing from their key vendors.

Bottom line: If you have budget–and are willing to spend it–deals abound, according to Citi’s quarterly CIO survey.

First, the high-level findings. Citi surveyed 200 CIOs evenly split between the U.S. and Europe. The survey, which was conducted mid-Nov. to mid-Dec., expect budgets to fall for the first time in five years. U.S. CIOs are expecting IT budgets to fall 2.7 percent in 2009 and their European counterparts see a slide of 1.9 percent. Click to enlarge all charts.

Other key threads:

• Only 21 percent of CIOs expect their budgets to grow in 2009;
• 28 percent of CIOs said they underspent their 2008 budget;
• 40 percent of U.S. CIOs expect their company to be worse off 12 months from now;
• Only 17 percent of CIOs expect the global economy to improve in the next 12 months.
• There’s downside to Citi’s IT spending projections since 28 percent of U.S. CIOs see their budgets down 28 percent.

• Security, server consolidation and PC upgrades are in. IT outsourcing, BPO and transitioning to Vista are clearly out.

• Storage and services will be the first two items to be cut in budget battles.
• U.S. CIOs are getting pricing concessions on PCs, servers and telecom servers. In Europe, CIOs are squeezing server, security and application development vendors.

And.