IT services spending down 10% in 2012

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Research published on Tuesday 8th January has shown a 10 percent drop in the amount of money spent on IT services in 2012 compared to 2011. The figures, taken from publicly disclosed IT services contracts, include spending on IT and business process outsourcing, consulting and systems integration.

Several recent factors may have contributed to this decline in business. A challenging economy has been suggested as the primary culprit, although government cuts to IT, and the widespread transfer of IT services from onsite infrastructure to cloud-based solutions are both also likely to have had an effect on the value of IT in 2012.

The current economic climate has resulted in a situation where the volume of business is shrinking. A crowded IT services market is being forced to take less lucrative deals as businesses use economic conditions to negotiate prices down which, in some situations, has led to existing deals being negotiated down by 30-40% at renewal.

Government cuts to major IT projects have also proved to be bad news for the UK’s IT services industry. With government IT budgets being cut by around a third, contractors are having to bring fees down to fit in line with what departments can afford.

Finally, as cloud computing becomes the standard in commercial IT installations, the efficiency savings made are proving to have a detrimental effect on overall spending on IT services. With more cloud services available, organisations are cutting down on investment in their own IT departments.

If you want to find out how IGC Technical Solutions can save you money on your IT budget, call us on 0845 868 9928.[/vc_column_text][/vc_column][/vc_row]