CIOs cutting opex to pay for capex, says Gartner

Analyst firm says CIOs no longer delaying infrastructure upgrades

Opex supports capex says Gartner

CIOs plan to increase capital expenditures (capex) by 3 per cent this year and pay for that increase with a 1.3 per cent cut in operating budgets (opex), says analyst firm Gartner.

"Economic conditions are changing CIO spending priorities. The need to upgrade infrastructure is being appropriated from reduced operating budgets," said Gartner head of research at its executive programs arm Mark McDonald.

The finding comes from a Gartner mid-year survey of more than 500 CIOs.

"CIOs felt they could no longer delay infrastructure upgrades and other capital investments and they funded them at the expense of operating budgets," said McDonald.

Gartner's research shows CIOs' views on the global economy improving since earlier this year, with over 40 per cent seeing some form of economic recovery. However, 60 per cent of respondents saw economic challenges.

The industries hardest hit by the global financial crisis in 2008 and 2009 showed signs of rebounding in the first half of 2010, the survey indicated.

Consumer/retail, financial services and manufacturing CIOs responding to the survey indicated modest growth in IT budgets during the first half of the year.

Gartner pointed out that industries such as utilities and healthcare were undergoing deep structural changes, but continued to invest in IT regardless of economic outlook, whereas government and education industry CIOs reported budget declines in the face of tight economic conditions, said Gartner.