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Goldman Sachs sees IT spending dropping by 9 percent

Open source is top-of-mind for CIOs surveyed by Goldman Sachs, with cost savings almost certainly the key driver.

As late as November 2008, Goldman Sachs was projecting a 4 percent decline in global IT spending, and a 5 percent drop in developed economies.

What a difference a few months make. On Monday, Goldman Sachs released an update to its "IT Spending Survey" report, and now projects a 9 percent decline in global IT spending, and a 12 percent decline in developed economies.

Goldman Sachs projects a more optimistic 1 percent decline in 2010 global IT spending, but given how quickly it has had to revise downward its 2009 projections, it wouldn't be wise to budget against these projections.

As with the last report, however, there is a serious silver lining for open-source vendors. Two of them, actually. The first is that surveyed participants now rank open-source software spending 21st on their priority list, up from close to bottom (of 43 total) in November. The second? 80 percent see cost reduction as critical, making it the top priority for CIOs.

As more CIOs understand the cost savings that open source delivers, I expect that we'll see open source climb the spending priority list even faster.

Goldman Sachs IT Spending Survey

In other words, even as global IT spending gets slammed, open source's relative share of that spending should increase.

Take a recent example from the French Gendarmerie. Despite a 70 percent decline in its IT budget, the French Gendarmerie was able to maintain and grow IT projects, specifically with desktop-related projects, by moving to open source. Officials there estimate that they saved 50 million Euros in license fees alone.

Open source is truly the standout in Goldman Sachs' report. Software-as-a-service, which is also generally touted as a cost saver, declined in priority from the middle of the list to 36th. Want to save more money? Use open source. That's the message CIOs are buying.

Follow me on Twitter at mjasay.