New research from Gartner shows that IT budgets globally will increase by just 2.7 per cent in 2006, hence the analyst firm has titled IT as a "non-growth industry" now, with spending lagging behind general economic growth as user organisations lose faith in the returns on their tech investments.This trend could put the future of the CIO and the existence of the IT department under threat as organisations increasingly go down the outsourcing route.

Gartner VP and research fellow Ken McGee told silicon.com: "We think there is a slowdown taking place. Businesses don't see the value [in technology] any longer. They find no compelling reasons for vigorous investment. It's a non-growth industry, McGee also said: "This represents a very dangerous period ahead. It will only accelerate the number of organisations who conclude 'this is a commodity and I don't need you to do it'." Part of the problem is that many IT departments are simply applying new technologies to the existing business processes without adding any tangible value, according to Gartner's McGee.

He also warned: "There's not a lot of new application of IT. CIOs have got to devote more energy towards being innovative and taking IT where IT has never been before."

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Prashanth Rai