Business should cut IT spending, urges Gartner

Organizations spend more money on IT services than hardware and software combined, so these investments represent one of the largest opportunities for cost savings, according to Gartner.

Despite hefty IT services budgets, "IT services continue to receive less mind share, management attention, discipline and focus than [hardware and software] spending," said Gartner analyst Frances Karamouzis.

The true extent of IT services spend is often obscured because of this lack of focus, but in reality enterprises often spend less on their own internal staff, equipment and facilities than on external IT service vendors, he added.

Gartner has advised all enterprises to look into alternative IT delivery models, such as business process utilities, software as a service (SaaS) or infrastructure utilities.

Karamouzis believes the economic recession could prove to be a "tipping point," which will finally force enterprises to divide their IT services into those that require custom software and those that can make do with configurable mass-market products.