Negotiate the best deals now, says Gartner

IT decision makers need to negotiate the best deals now, because next year the balance of power will shift back to the vendor, according to Gartner.

The analyst is predicting a slow but sustained recovery in 2004, but warned delegates at its Spring Symposium in Florence that they will have to fight to reap the benefits.

This year's bargain basement sales will disappear as consolidation puts vendors in a much stronger position to force through licensing and upgrades.

The trend will put pressure on tight budgets, explained Gartner group vice president Peter Sondergaard.

Although the analyst said that 2003 will be the "last year of doom and gloom", he warned that an upturn will not be necessarily be matched by large increases in IT budgets in the short term.

Gartner's 2003 IT Budget Survey in Europe reveals that 58 per cent of chief information officers (CIOs) expect their budgets to remain the same as last year, a slight increase.

Leaner IT departments will be expected to make the most out of existing systems.

"The combination of slack budgets this year and next, the need to replace outdated hardware and software, and maintenance overheads from boom-time investments, is leaving CIOs with almost no discretionary spend," said Sondergaard.

"CIOs will need to cut at least 10 per cent of older, inefficient environments to create any discretionary spend in 2004."

The IT department will need to change to get the maximum benefit from the recovery, according to Gartner vice president Nick Kirkland.

"Intense cost pressures amid increasing demands will suit those CIOs who are able to build bridges to the rest of the business, show leadership and demonstrate the business value of what they can do," he said.