Conflicting views on software and IT services spend

Further to my recent post -- It's not all doom and gloom for financial technology -- I've been reading a few predictions for IT spending in 2009.

Some choose to focus on the positive -- for e.g. spending on risk management  systems is growing. While others look at the state of software and IT services more broadly, and are much more pessimistic.

UK software guru Richard Holway falls into the latter category. This is from one of his blog pasts last week after Logica's earnings announcement:

I can offer just one lesson learnt from previous downturns, it is that our industry always seems to ‘Live in Denial' when faced with a slowdown. "It will not affect IT", "It will be short-lived", "Let's wait until the end of the month, quarter, year before we take any cost-cutting action". UK SITS is facing a downturn. I think you should prepare for no growth in 2009.

While focusing on the UK, he says that as the French and German economies actualy shrank in the last quarter, the same picture probably applies across Europe.

Back on the positive spin, core banking system vendor Temenos sent me an email yesterday about how they surveyed 336 bank representatives at their anual client forum on how IT spending was changing.

They say that the majority of respondents to the survey expected their overall IT budgets to be higher than in 2007, with 14% saying moderately higher (0-5%) and 43% saying materially higher (more than 5%).

Reversing the spin, you could also say that 43% of institutions are having budgets frozen or reduced. (It depends whether you want to be seen as optimistic or pessimistic).

Breaking it down further, Temenos says its clients' spending on risk and compliance, core banking and business intelligence software is set to increase. But spending on staff, internal software development and hardware are likely to fall.

But what about you in the Finextra Community? As a bank employee, are you seeing projects frozen or cancelled? Perhaps there's still growth in certain areas? And if you're a vendor, what are you seeing/hearing?