October 14, 2008, 5:45 AM — The carnage on Wall Street isnâ€™t pretty this week. Until now, most of us industry observers have said that our lousy economy hasnâ€™t truly hit the IT business, and for the most part, that has been true. VARs and integrators have been holding steady, software and hardware makers continued to make a profit, and employment within the IT sector has remained high despite rising unemployment.
For the first time, weâ€™re starting to acknowledge that the IT business may feel the effects of the credit crunch, the housing crisis, and this weekâ€™s troubles on Wall Street. A Forrester report noted that 43 percent of firms surveyed have cut their IT budgets in 2008 due to the economic slowdown, and 24 percent have ended discretionary spending.
To some degree, IT is protected from the ebbs and flows of the economy, simply because it is essential. A company may decide to put off buying core technology, but it canâ€™t do so for very long and stay in business. Security technology is increasingly seen as one of the most essential of all IT services, because of the enormous potential for loss due to security breach. According to the Forrester survey, IT security will not feel the ill effects as much as the rest of the IT business, with 21 percent of companies increasing IT security budgets next year, and three-fourths indicating that there will be no cutbacks in security spending. Read the rest of this article