Over half of European businesses outsourcing IT

More than half of organisations in Europe are outsourcing their IT, while 40 percent are planning to spend more on IT outsourcing in 2010, according to the latest report by Gartner published today.

The study, which surveyed 206 companies throughout Europe, found that 53 percent of organisations resort to external IT companies to provide them with essential IT services, and that figure is set to rise with further spending on outsourcing.

Many of the companies surveyed spent between 50 and 75 percent of their IT budget on external services, with some spending significantly more. 40 percent plan to increase their external IT budget even further, while 24 percent will increase their budget for providers.

While outsourcing budgets are up, overall IT budgets are down, due to the prolonged economic downturn and general fears for the European economy. 25 percent of companies plan to continue cutting their IT budgets throughout the rest of the year, with the possibility of further cuts in 2011.

Smaller companies with lower IT budgets are making the move to outsourcing more than in previous years. For those with an IT budget of less than €1 million, 14.7 percent are considering outsourcing, compared to only 6.1 percent in the same bracket in 2009.

The reason for the surge in outsourcing is the cheaper alternatives it often offers to running your own IT, which is pivotal for many companies who have been forced to cut their IT budgets amidst lower profits or, in worst cases, actual losses. On the other hand external IT specialists must be delighted with the move, ensuring that their businesses survive any possible drought caused by the recession.