Gartner Says CIOs Should Re-Examine Budget Plan Modelling In a 20 Percent Increase in Dollar-Based IT Products
Analysts to Discuss Financial Management at the Gartner IT Financial, Procurement & Asset Management Summit 2015, September 21-22 , in London
Over the last year, the euro, Japanese yen and Brazilian real have all dropped by about 20 percent relative to the U.S. dollar. As a result, products priced in dollars will become more expensive in local currencies. Gartner, Inc. said CIOs of any country whose currency has weakened against the U.S. dollar need to re-examine their budget plans and account for a 20 percent increase in the price of dollar-based IT products for 2015 and beyond.
“We expect that this drop will hold through at least the end of 2016,” said Roberto Sacco, research director at Gartner. “As the CIO, the most important action is to review your project plans through the second quarter of 2016. Assume there will be a 20 percent euro price increase on dollar-based IT products, and then make a plan to deal with it. This exchange rate challenge will be managed by good planning — not by rapid response.”
Because of currency fluctuations, European CIOs can also expect server prices to increase by up to 20 percent. Clearly, server manufacturers will not sell products at a substantial loss, so there will be no room for negotiation. The same outcome will happen with U.S. software providers.