Article in the FT In the 1990s, the IT industry developed a reputation for aggressive sales tactics. One of the results of this was that many senior executives became disillusioned when significant investments did not appear to bring the promised benefits. Arguably, over-selling in the late 1990s made the technology downturn that followed deeper and longer than it might otherwise have been.
Here we are 10 years ago and the technology sector is slowing down. However the article states that a few factors why IT spending will not be hard hit:
1. IT is now so deeply embedded in operations that to cut spending would be difficult, perhaps even impossible. This is supported by the assertion of industry analysts that most IT departments spend up to 80 per cent of their budgets on operations, or “keeping the lights on”; this spending cannot easily be stopped.
2. Enterprises and government departments have become more dependent on IT, so have buyers.
3. Purchasing decisions are made by CEO more than the CIO, so phases like increase productivity and profits sound quite appealling.