Businesses slash IT spending

A new survey reveals 44% of companies have delayed IT investments, while 55% say they have reduced plans for expanding their business.

The survey, conducted by credit reporting agency Veda Advantage, comes as conditions in the IT sector take a decided turn for the worse.

Last week the Federal Government announced it will slash around $400 million in recurrent IT spending and sack 1500 computer contractors in a bid to slash public service costs.

Industry research firm Gartner has also cut its forecast for the sector’s growth in 2009 from 5.8% to just 2.3%.

The cuts in IT spending appear to have already sparked a rush of industry consolidation. Last week, private equity firm Archer Capital launched a bid for software giant MYOB, Melbourne’s UXC acquired listed IT services company Ingena, and US giant Oracle bought RuleBurst for $150 million.

UXC finance director Mark Hubbard says industry consolidation is likely to accelerate as asset prices fall and smaller companies struggle in the current economic climate.

On Wednesday, SmartCompany will reveal the 50 fastest-growing IT companies in a brand new SmartCompany Dun & Bradstreet Industry Growth List. Don’t miss it.

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