Faced with uncertain financial conditions, corporations are cutting capital and operating budgets and the outlook for information technology spending this year – where wireless spend resides – has contracted from last year.
“The outlook for 2009, based on pre-year forecasting, indicates an average planned increase in IT of around 2.8%,” according to a new Gartner study of IT metrics by analyst Linda Tracy and colleagues. “This is much less optimistic than last year, when the planned increase was 5%.”
“Due to the recent turmoil in the financial markets late in the year,” the report added, “organizations’ spending plans may have been re-forecast with an even less optimistic outlook.”
The outlook for IT is down
Typically, 40% to 50% of technology spend under the “networks and communications” portion of those shrinking IT budgets goes to mobility, including wireless local area networks, cellular and 3G data services, wireless voice and smartphones and personal digital assistants, according to Gartner analyst Phil Redman.
The upshot is simple.
“Companies are looking to do more with less,” Redman said. “That’s the challenge.”
“Obviously, mobile technology can contribute to that,” the analyst said. “But how do you measure it? That depends on the industry and the application. Field service applications, for instance, can be quantified. But horizontal apps, such as e-mail – does mobile e-mail make workers more productive and efficient? I don’t think that’ll ever be proven.”
Mobility initiatives that contribute to top-line revenue are often viewed favorably, while technology that adds actual costs while not directly impacting revenue may face greater scrutiny for its return-on-investment, according to Redman.
Still, moving up to third place among expectations for IT’s focus this year was “improving enterprise workforce effectiveness,” in an annual Gartner survey of 1,500 chief information officers representing $138 billion in corporate and public IT spending. That could favor wireless technology, Redman acknowledged.
Out with the old
One area of frugality that is growing is the trend towards replacing unused landline phones with mobile handsets. According to Gartner data, that affected perhaps 2% of enterprise landlines in 2000, a figure that grew to about 20% last year and is expected to increase somewhat each year – though never reaching 100%.
“That’s cost optimization,” Redman said. “You can cut the desk line if mobile use is high. Now, with more functional smartphones, it’s easier to integrate them into the corporate PBX.”
Caveats, however, include sometimes poor in-building cellular network coverage, which can require costly solutions, eating into the savings on disconnecting the landlines, the analyst said.
And when corporations turn employees loose with mobile phones, there’s still a question of who picks up the tab.
About 70% of the enterprises apply “corporate liable” policies to personal use of voice-and-data services and devices, Redman said, which has been shown to increase productivity. But in turbulent financial times more corporations are considering pushing mobility costs off to the employee, who often expenses part of it – a process that can disguise the actual magnitude of a company’s wireless spend.
Gartner holds its Wireless and Mobile Summit on Feb. 23-25 in Chicago, a gathering that will spend considerable time on cost optimization for the enterprise as well as mobile technologies and applications.
