IT Spending

, Apr 27, 2007

Tim Bray recently linked to an interesting post by Nick Carr — according to him, Citigroup plans to cut $4.6 billion from their IT budget over the next three years. His conclusion:

In the short run, the rationalization wave could be good news for IT vendors - at least some of them - as it will involve investing in the modernization of IT plants and equipment. But in the longer run, the trend at the top tier of the enterprise market is clear: IT spending is going down.

The intent seems to somehow imply that this is bad for the IT industry — after all, Nicholas Carr is the author of the rather famous IT Doesn’t Matter article. But this seems a total non sequitur to me — getting rid of unnecessarily complex, efficient and needlessly redundant crap is good for the industry as a whole. I believe this is only going to hurt those who deliver something at high prices without appropriate value — which, admittedly, is true for many, but definitely not all IT vendors.